UNIT CONTENT GUIDE LEVEL 5 Advanced Diploma in Purchasing and Supply The units that make up the award are: • Management in the Purchasing Function • Risk Management and Supply Chain Vulnerability • Improving Supply Chain Performance - Integrative unit Plus a choice of two optional units: • Marketing for Purchasers • Storage and Distribution • Operations Management in the Supply Chain • The Machinery of Government • Contracting in the Public Sector
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UNITCONTENTGUIDE LEVEL5 - CIPS · UNITCONTENTGUIDE LEVEL5 ... • Quality Management ... purpose of CIPS qualifications, awards at levels 3-6 will have an integrative unit.
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UNIT CONTENT GUIDE
LEVEL 5AdvancedDiploma in Purchasing and Supply
The units thatmake up the award are:• Management in the Purchasing Function• RiskManagement and Supply Chain Vulnerability• Improving Supply Chain Performance - Integrative unit
Plus a choice of two optional units:• Marketing for Purchasers• Storage andDistribution• OperationsManagement in the Supply Chain• TheMachinery of Government• Contracting in the Public Sector
UNIT CONTENT GUIDE
LEVEL 5AdvancedDiploma in Purchasing and Supply
The Chartered Institute of Purchasing & Supply qualifications
ladder has six levels of awards. For details of the entry
requirements for each level, please refer to www.cips.org
The CIPS Advanced Diploma in Purchasing and Supply is a
Level 5 higher level qualification. It has been accredited by
the Qualifications and Curriculum Authority (QCA) and
appears on the National Database of Accredited Qualifications,
please refer to www.accreditedqualifications.org.uk
The Level 5 Advanced Diploma in Purchasing and Supply
consists of three compulsory units.One of these, Improving
Supply Chain Performance is an integrative unit which is
designed to draw together the knowledge and understanding
achieved in the other four units and to demonstrate how
these units combine and integrate in a working environment.
The integrative unit should be taken after the compulsory
units have been completed. Additionally you must choose
two optional units from a choice of five:
• Marketing for Purchasers
• Storage and Distribution
• Operations Management in the Supply Chain
• The Machinery of Government
• Contracting in the Public Sector.
Assessment for each unit is by examination,with the
exception of the integrative unit when there is a choice for
students in the UK. If your study centre has been approved
you can choose either a closed book examination or a work-
based assessment.
The table below is a list of the units, their QCA reference
numbers and CIPS reference code which is used to identify
the unit for examination purposes.
If you wish to study for this award it is expected that you will
undertake 50 guided learning hours per unit, ie a total of 250
guided hours.The QCA definition of guided learning hours is:
“A measure of the amount of input time required to achieve
the qualification.This includes lectures, tutorials and
practicals, as well as supervised study in, for example,
learning centres and workshops.”
You will find that study centres vary on the exact format for
delivery of the study programme.Additionally CIPS would
recommend that you also commit 80 hours per unit of self-
study, including wider reading of the subject areas and
revision to give yourself the best chance of successful
completion of the award.
Introduction
LEVEL 5 – ADVANCED DIPLOMA IN PURCHASING AND SUPPLY QCA QUALIFICATION NUMBER 100/6113/7
Management in the Purchasing Function QCA K/500/1713
CIPS ref code L5-01
Risk Management and Supply Chain Vulnerability QCA M/500/1714
CIPS ref code L5-02
Improving Supply Chain Performance – integrative unit QCAT/500/1715
CIPS ref code L5-03
Plus choose two options
Marketing for Purchasers QCA F/500/1717
CIPS ref code L5-10
Storage and Distribution QCA J/500/1718
CIPS ref code L5-11
Operations Management in the Supply Chain QCA L/500/1719
CIPS ref code L5-12
The Machinery of Government QCA D/500/5371
CIPS ref code L5-13
Contracting in the Public Sector QCA H/500/5372
CIPS ref code L5-14
GLOSSARY OF TERMS
AssessmentAssessment is the way in which CIPS will measure whether or not a student isable to demonstrate their knowledge,understanding and ability to apply theirlearning in any given situation.
An assessment could be an examination, assignment or project.
Business EssentialsCIPS have introduced a new concept called ‘business essentials’.
They are commonly occurring themes through the CIPS qualifications, thatdo not warrant a unit in their own right,but that are important holistically tothe learning undertaken within CIPS qualifications.
They are areas of importance, innovation and some emerging themes,such as:• Quality Management• International issues• Business Finance• Information Management• External factors
Command WordsCommand words are generally verbs that are used to indicate the level oflearning undertaken. They tend to be hierarchical in nature.
For example, at the CIPS Certificate qualification at Level 3, a commandword will be ‘demonstrate’or ‘explain’,whereas a command word at GraduateDiploma level will be ‘synthesise’, or ‘critically evaluate’.
These words reflect the level of complexity of your learning and ultimatelyyour assessment at that level.
Compulsory Core UnitsThese units are specifically CIPS units that must be taken as part of the overallCIPS qualifications.
For the purpose of this glossary, these are the units that sit within theGraduate Diploma at Level 6.
Compulsory UnitsThese are units that you must take either through CIPS or an alternativeawarding body that constitute necessary knowledge and understanding to fulfillearning requirements for CIPS qualifications.
If you have undertaken equivalent learning or have equivalent relatedexperience to the compulsory units from somewhere else you may either beexempt from learning,or gain accreditation for prior learning or experience.
Entry LevelThis is the point at which you will enter the CIPS qualifications ladder. Thisentry will be based upon pre-requisite knowledge,understanding andexperience.
There will be entry points to CIPS qualifications from Level 2 to Level 7.
ExemptionsStudents who have successfully completed certain post-school studies mayapply for exemptions from equivalent courses in their programme of study. Toearn an exemption from either levels of qualifications or option units withinqualifications you should contact CIPS.
Please note that gaining an exemption,does not mean that you gain an exitaward at that level, rather that you bypass that level of learning because ofequivalent learning and achievement gained elsewhere.
Exit AwardAn exit award is in essence a qualification.CIPS will have six exit awards in total.• Introductory Certificate in Purchasing and Supply• Certificate in Purchasing and Supply• Foundation Diploma in Purchasing and Supply• Advanced Diploma in Purchasing and Supply• Graduate Diploma in Purchasing and Supply• Executive Diploma in Purchasing and SupplyFor each qualification you study, you will receive a Certificate ofAchievementconfirming your exit award.
Indicative ContentThe knowledge required in order to fulfil the learning objective and achieve thelearning outcomes – in other words what you need to know.
Integrative UnitsIntegrative units are intended to help students see connections between allaspects of their learning within a particular level of qualification.For thepurpose of CIPS qualifications, awards at levels 3-6 will have an integrative unit.
LearnerMember who is studying a CIPS qualification.
Learning ObjectivesDetermines the level of learning you must undertake in order to achieve thelearning outcomes.
Learning OutcomesA goal for attainment,which indicates what you need to know and be able todo to complete your studies in a particular subject area.
Each unit has six to seven learning outcomes which outline what you willachieve as a result of your learning in that particular unit.
LevelExit awards will have a level assigned to them. For example: Level 3 will be theCertificate in Purchasing and Supply.
This level determines the complexity of learning, the depth of learning andthe comparison of learning with other qualifications.
CIPS will ultimately have qualifications at Levels 2 to 7. The levels are asfollows:• Level 2 – Introductory Level – this is for somebody new to the purchasing
and supply profession and often in a junior capacity• Level 3 – Junior technical – also potentially new to learning• Level 4 – Operational/junior manager/new to the profession• Level 5 – Manager/specialist role• Level 6 – Senior managers/specialist professional• Level 7 – Strategic managerThe levels are determined by Qualifications and CurriculumAuthority,who arethe Government regulator for education, and enable a clear understandingnationally of the level of a person’s learning and ability in that field.
National Qualifications FrameworkThis Framework is a Government Framework,where qualifications that areapproved by Government, as being fit for purpose, and meeting the qualitycriteria, are listed.Qualifications listed within this Framework are monitored against a variety ofmeasures to ensure quality of qualification, associated procedures and delivery.
Optional UnitsThese are units where you have choice and opportunity to specialise in an areaof interest. There is an opportunity to select two optional units at AdvancedDiploma and two optional units at Graduate Diploma.
Qualifications and Curriculum Authority (QCA)QCA is the Government regulator for professional bodies such as CIPS, and actas the caretaker of qualifications included with the National QualificationsFramework.
Qualifications LadderThis ladder represents the hierarchical nature of CIPS qualifications. The ladderhas six steps within it. It starts with an Introductory Certificate through to theGraduate Diploma.
Each step of the ladder is represented by qualification with an ‘exit award’.
Transitional ArrangementsThese arrangements enable students who are currently part way through theirstudies to move to the new qualifications. Transition recognises previous CIPSexam passes,previous CIPS exemptions. CIPS will ensure that students are notdisadvantaged by the introduction of new qualifications.
UnitA segment of learning within the CIPS qualifications,which has a value in termsof hours of learning.
Each unit is individual,has its own title, rationale and content.A unit will also have an assessment attached to it in order to demonstrate
achievement and conclusion of the learning.
WeightingsWeightings are allocated to each unit, to determine how the learning can besensibly split.
Each unit has a content weighting of 100%. Within each unit, each subjectarea is given a weighting e.g.20% or 25%.
This weighting indicates the level of input and learning required by thedeliverer and the learner in order to complete the subject area.
However, the weightings do not necessarily reflect the marks that may beallocated to a question in that subject area of the unit.
1 Unit Content • June 2007
ACRONYM GUIDE
ABC AnalysisStock Categorisation MethodApplication of Pareto’s Law of the 80/20 rule:ABC classifications aredetermined in ascending rank order of all products according to theproduct classification as a percentage of the total purchasing spend.Ranking can also be by volume, value,weight etc.
BBSBusiness Balanced ScorecardA balanced scorecard developed by Kaplan & Norton to overcomean imbalance in business planning. It is a management system thatinvolves setting measures based upon the priorities of the strategicplan. It provides the key business drivers and criteria to motivatemanagers to develop and apply processes that will contribute tofuture success – rather than dwelling on historic performance. Byrequiring four perspectives, it provides a richer more holistic viewof the organisation.The four perspectives are: financial, customer,internal business processes, learning and growth
BCPBusiness Continuity PlanningA methodology used to create a plan for how an organisation willresume partially or completely interrupted critical functions withina predetermined time after a disaster or disruption
BPRBusiness Process Re-EngineeringThe fundamental rethinking and radical redesign of businessprocesses. To achieve dramatic improvements in critical,contemporary measures of performance such as cost, quality,service and speed
CADComputer Aided DesignThe use of a wide range of computer based tools that assist engineers,architects and other design professionals in their design activities
CAMComputer Aided ManufacturingThis is a software process that can directly convert an object(product drawing) into code so that a machine, such as a lathe ormilling machine can manufacture the product
COSHHControl Of Substances Hazardous to HealthLegislation that requires employers to control exposure tohazardous substances to prevent ill health
CSRCorporate Social ResponsibilityCSR means the commitment to a systematic consideration of theenvironmental, social and cultural aspects of an organisation’soperations.This includes the key issues of sustainability, humanrights, labour and community relations, as well as supplier andcustomer relations beyond legal obligations; the objective being tocreate long-term business value and contribute to improving thesocial conditions of people affected by an organisation’s operations
ECREfficient Consumer ResponseThe link to make category management an operational reality.Supplier and buyers working together to ensure total consumersatisfaction
EDIElectronic Data InterchangeThe exchange of documents/information between computers usingtelephone lines
EFTElectronic Funds TransferFinancial or value transactions carried out between parties bymeans of computer systems. It can also refer to financialinformation about transactions being passed
EPOSElectronic Point Of SaleA system that allows the flow of inventory/products fromwarehouse to point of sale in the shortest time
ERPEnterprise Resource PlanningRefers to any software that enables companies or organisations tointegrate various functions and programs so that they are allinterconnected and have the ability to ‘talk’ to each other
EUEuropean UnionThe European Union was created in 1992 following the signing ofthe Maastricht Treaty replacing the European Economic Communityand other constituent organisations which were originallyestablished in 1957. Its aim is to create an environment for the freemovement of goods, services, labour and capital across the memberstates.There is also an emphasis on the abolition of trusts andcartels and the development of joint and reciprocal policies onlabour, social welfare, agriculture, transport and international trade.
FMEAFailure Modes Effects AnalysisIs an easy to use and yet powerful pro-active engineering qualitymethod that helps you to identify and counter weak points in theearly conception phase of products and processes.The structuredapproach makes it easy to use and even for non-specialists it is avaluable tool.The benefits obtained encompass by and large theinvestments in time and resources to execute the analysis
IDeAImprovement and Development AgencyThe IDeA works in partnership with all councils, to enhance theperformance of the best, accelerate the speed of improvement ofthe rest and develop the sector as a whole.
iDEFICAM DEFinition languageiDEF is the shortened version of ICAM DEFinition Language. It wasan initiative by the US Airforce during the 70s/80s to modernisetheir technology, specifically the use of computers inmanufacturing. ICAM stands for Integrated Computer-AidedManufacturing and the aim was to make the manufacturing processquicker and more efficient
ICTInformation, Communications TechnologyThis is a broad subject concerned with technology and otheraspects of managing and processing information, especially in largeorganisations
ISOInternational Organisation for StandardisationThe ISO is not one organisation, but a network of national standardsinstitutes across 150 countries. International standards are createdthrough consensus agreements by each of the national delegations.This provides a common technological language between suppliersand buyers facilitating trade and the transfer of technologiesamongst those countries involved
JITJust In TimeOriginally a concept imported from Japan, based on the idea thatonly sufficient quantities should be manufactured or be madeavailable to satisfy customers’ immediate needs. Relies on anefficient supply chain for its success
KPIKey Performance IndicatorAlso known as Key Success Indicators. They are financial and nonfinancial metrics used to reflect the critical success factors of anorganisation or contract.They are used in Business Intelligence toassess the present state of business or a contract and to prescribethe next course of action
2 Unit Content • June 2007
MISManagement Information SystemsThese are information systems, typically computer-based, that areused within an organisation
MkISMarketing Information SystemsA computerised data system which stores and allows retrieval ofinformation needed for making marketing decisions
MRPMaterials Requirement PlanningA planning process to ensure available stock to satisfy demandwithin a given period
MRPIIManufacturing Resource Planning IIA process to plan production and establish lead times based onavailability of resources
MSPManaging Successful ProgrammesManaging Successful Programmes comprises a set of principles andprocesses for use when managing a programme. It is founded onbest practice although it is not prescriptive. It is very flexible anddesigned to be adapted to meet the needs of local circumstances.
NAONational Audit OfficeThe National Audit Office is totally independent of Government andhas statutory authority to report to Parliament on the economy,efficiency and effectiveness with which government departmentsand other public bodies use their resources.
NHSNational Health ServiceFounded in 1948, this organisation provides the majority ofhealthcare in the UK.NHS services are largely “free at the point ofdelivery,”paid for by taxes. Employing well over one million people,the NHS is the largest employer in Europe and one of the largestemployers in the world.
OGCOffice of Government CommerceOGC is an independent office of theTreasury.Together with itsexecutive agency OGCbuying.solutions,OGC works with publicsector organisations to gain the best possible value for money fromprocurement in support of the Government’s efficiency target.OGCsupports initiatives that encourage better supplier relations,sustainable procurement, the benefits of utilising smaller suppliersand the potential of eProcurement, and represents the UK at theEuropean Union (EU).OGC also supports major programme andproject management,which involves complex procurement.
OPCOperations Planning & ControlThe activities undertaken that ensure all required resources withinan organisation are managed effectively to produceproducts/services right through to the delivery of theproduct/service to the customer
OPTOptimised Product TechnologyThis is a computer-based technique and tool originated by EliyahuGoldratt. In principle, it aids production scheduling systems to fulfilthe pace of production during the most heavily loaded resourcessuch as bottle-necks
PACPublic Accounts CommitteeThe Committee of Members of Parliament appointed to examineand report on the accounts of government departments and otherpublic bodies.The accounts are audited by the Comptroller andAuditor General,whose reports on the accounts form the basis forthe Committee’s examination of departmental Accounting Officersand subsequent reports.
PASAPurchasing and Supply Agency (NHS)The NHS Purchasing and Supply Agency is an executive agency ofthe Department of Health, established in 2000.The role of theagency is to act as a centre of expertise, knowledge and excellencein purchasing and supply matters for the health service.The Agencyis an active participant in the ongoing modernisation of purchasingand supply in the health service, and contracts on a national basisfor products and services which are strategically critical to the NHS.It also acts in cases where aggregated purchasing power will yieldgreater economic savings than those achieved by contracting on alocal or regional basis.
PESTLEPolitical, Economic, Social, Technological, Legal,EnvironmentalAn analytical tool that aids organisations developing strategies byhelping them understand the external environment in which theyoperate now and in the future
PFIPrivate Finance InitiativeAn agreement that promotes partnership between both private andpublic sectors which enables the utilisation of a wide variety ofassets and services in the private sector.The objective is to improvethe quality and quantity of public sector capital products and alsoto provide more efficient public services.
PPPPublic Private PartnershipAny alliance between public bodies, local authorities or centralgovernment and private companies to produce capital projects ordeliver public services.
PRINCE2Projects in a Controlled EnvironmentA process based approach for project management providing aneasily tailored and scalable method for the management of all typesof projects. Each process is defined with its key inputs and outputstogether with the specific objectives to be achieved and activities tobe carried out. PRINCE2 is Crown copyright.
SMESSmall and Medium sized EnterprisesA small firm is an independent business,managed by its owner orpart-owners and with less than 50 employees.A medium sized company must meet thresholds for annual turnoverand have fewer than 250 employees.
SWOTStrengths, Weaknesses, Opportunities, ThreatsIs a strategic planning tool used to evaluate the Strengths,Weaknesses,Opportunities, andThreats involved in a project or in abusiness venture or in any other situation requiring a decision
TQMTotal Quality ManagementIs a set of systematic activities carried out by the entire organisationto effectively and efficiently achieve company objectives so as toprovide products and services with a level of quality that satisfiescustomers, at the appropriate time and price
TUPETransfer of Undertakings (Protection of Employment)Legislation that aims to ensure that an employee whose company istaken over has his existing conditions respected by his newemployer.They also apply in some cases for work transferred tocontractors.This includes hours of work, pay, pension entitlementand so on.
3 Unit Content • June 2007
LEVEL 5
CIPS ADVANCED DIPLOMAMANAGEMENT IN THE PURCHASINGFUNCTION(Compulsory Unit)
UNIT CHARACTERISTICSThis unit is designed to enable students to manage their
own area of responsibility within an organisation’s internal
supply chain, in line with the overall strategic business plan
and the operational plan for the purchasing function.
Students should be able to implement operational plans for
their own area of responsibility to achieve objectives set out
in their plan. In doing so they should be able to employ a
range of resources, including human, physical and financial,
and manage and delegate tasks effectively.
This unit is about managing the expectations of the
stakeholders that are directly involved in the student’s own
area of responsibility and will provide them with
management techniques to help them to involve others, be
innovative, consultative, influential and persuasive in order
to achieve targets effectively.
LEARNING OUTCOMESOn completion of this unit, students will be able to:
• Evaluate the challenges facing managers in dynamic and
changing organisations
• Analyse the characteristics of different organisational
structures and cultures
• Use a range of techniques to support and implement
justifiable management decisions
• Formulate plans to effectively manage work groups and
teams
• Propose processes and systems to enable the successful
implementation of change programmes to maximise
purchasing efficiency and effectiveness
LEARNING OBJECTIVES AND INDICATIVE CONTENT
1. The challenges of management.(Weighting 20%)
1.1 Define the term management and differentiate
management from leadership.
• Definitions of management (Drucker & Brech)
• Management: planning, co-ordinating, controlling and
motivating staff
• Management styles
• Leadership perspectives and styles
1.2 Establish the importance of stakeholder groups who
• arguments to justify ‘spend to save’ initiatives by
identifying deliverables and drawing upon evidence
of their achievement in the public and private
sectors
3.5 Discuss for and against using public procurement to
promote Government initiatives such as the social
agenda, local sourcing, sustainability and diversity:
• arguments for and against the use of public
procurement for socio-economic purposes
• the policy and legal context in relation to the use of
public procurement for socio-economic purposes
• scope for variations of procurement practice to meet
the requirements of different cultures eg ethnic,
religious
• procedures and mechanisms by which public
procurement may be used to achieve socio-
economic goals such as the social agenda, local
sourcing, sustainability and diversity within existing
legal constraints
3.6 Manage the complexity of balancing conflicting
procurement goals within competing political and
cultural contexts:
• conflicts between regulatory, commercial and socio-
economic goals of public procurement
• political and organisational contexts within which
pressures to achieve conflicting procurement goals
operate
• evidence of the successful management of pressures
to achieve conflicting procurement goals in central
and local government and the NHS
4.0 Outline and assess the significance of the financialaccountability cycle and the role of audit forimproving procurement policy and practice(Weighting 20%)
4.1 Assess the implications of the government accounting
cycle for procurement, particularly in relation to multi-
year major service or project contracts and year-end
spend:
• implications of the accounting cycle for multi-year
service contracts, complex projects, non-
conventional finance and value for money
procurement spend
• mechanisms for adapting the accounting cycle to
facilitate mechanisms for risk-taking, innovation an
entrepreneurial approach to modern professional
procurement
4.2 Discuss the roles of the NAO and Audit Commission in
promoting good procurement practice within the
accountability framework:
• evidence of promotion of good procurement practice
in reports by the NAO and Audit Commission
• mechanisms and processes for successful
collaborative working between the procurement and
audit functions
• limits of collaborative working to ensure the
independence of the audit role
4.3 Evaluate whether the role of the PAC, local government
auditors and the Audit Commission (in relation to the
NHS) in highlighting and publicising incidences of poor
procurement practice, leads to the reinforcement of a
risk avoidance culture:
• evidence of the positive and negative impact of
reports by the PAC and other audit bodies on
procurement
• means of influencing organisational policy and
procedures towards a positive approach to
managing risks from procurement spend based upon
a strategic approach, senior management ownership
and the effective deployment of procurement
expertise.
31 Unit Content • October 2006
LEVEL 5
CIPS ADVANCED DIPLOMA INPURCHASING AND SUPPLYCONTRACTING IN THE PUBLIC SECTOR(Optional unit)
UNIT CHARACTERISTICS
This unit recognises the differences in contracting and
regulatory requirements within the public sector
environment. It is intended to go beyond the CIPS Level 4
Developing Contracts in Purchasing and Supply, in order to
take on the challenges of managing a contract from
inception through to conclusion.
The unit is designed to provide students with the
knowledge and understanding to analyse concepts
underlying the contracting process, including markets,
transparency, competition, relationships and trust.
Students will be expected as a result of studying this unit to
be able to manage the contracting process efficiently and
effectively through developing the business case for the
procurement, analysing the nature and scope of the
contract, applying appropriate selection procedures and
developing positive relationships with suppliers to realise
intended benefits in the context of public accountability
and responsible stewardship.
LEARNING OUTCOMESOn completion of this unit, students will be able to:
• Develop the business case
• Analyse the nature and scope of the contract
• Manage the supplier selection process through the
application of appropriate rules and procedures
• Develop and maintain positive relationships with
suppliers to realise benefits
LEARNING OBJECTIVES AND INDICATIVE CONTENT
1.0 Develop the business case(Weighting 25%)
1.1 Evaluate potential risks and establish appropriate
procedures to manage risks:
Types of risk:
• Political eg reputational, loss of democratic oversight
by elected representatives
• Limited competition in the market
• Failure to meet performance standards
• Change of law
• Security of supply, contingency planning, stock
holding and alternative sources of supply
• Quality, project or technology failure
• Supplier insolvency,monitoring and guarantees
• Security, theft and damage
• Fraud, accounting & payment exposures, conflicts of
interest, purchasing ethics and codes of conduct
• Contractual failure, consequential loss and provision
for remedies
Procedures to manage risks:
• Allocation of risks between client and contractor
according to which party is better placed to manage
the risk
• Determine form of governance arrangements
through which risks can best be managed eg
contractual incentives and penalties, liquidated
damages, relationships
• Establish procedures for monitoring and managing
the key risks identified
1.2 Assess the relative merits of internal, external or mixed
provision of the purpose of the contract:
• arguments for and against internal, external or mixed
provision by public, private and third sector
providers eg voluntary bodies, charities
• policy on contracting out, competitive tendering, use
of private finance, private and voluntary sector
expertise
• models for determining the appropriate governance
arrangements eg transaction cost economics,
relational competence analysis
1.3 Identify the correct level of approval for the purchase
and obtain authority to proceed:
• official (eg by grade, by department (Purchasing,
Finance etc)), legal and political (eg Council
Committee,ministerial) approval levels in
accordance with established procurement and
ethical procedures
• relevance of approval procedures under Gateway
reviews or programme and project management
techniques such as PRINCE2 and Managing
Successful Programmes (MSP)
• internal and external stakeholders with whom
consultation is necessary
1.4 Plan that procurement staff with expertise appropriate
for the requirement are involved at an early stage:
• risks of not involving procurement at an early stage
• procurement knowledge and competences
appropriate for various requirements
• communication skills appropriate for interacting
with more senior staff and staff from different
professional and technical backgrounds
32 Unit Content • June 2007
1.5 Differentiate the appropriate funding mechanisms,
whether conventional, PPP/PFI or mixed:
• advantages and disadvantages of various funding
mechanisms eg conventional (from departmental
budgets), privately financed eg bond issue, PFI
contract
• whole life costing
• investment appraisal techniques
2.0 Analyse the scope and nature of the contract(Weighting 30%)
2.1 Evaluate the supply market for changes to suppliers,
technology, the nature and extent of competition:
• number, size, location, socio-economic aspects
(SMEs,minority owned etc) of suppliers
• technological changes eg new processes, equipment,
intellectual capital
• Porter’s 5 forces model: barriers to entry, threat of
substitutes, power of suppliers, power of buyers,
intensity of rivalry and strategies to increase power
of buyers
2.2 Evaluate opportunities for aggregation of requirements
and co-operative procurement paying due attention to
the optimum geographical and sectoral scope of the
contract:
• other buying organisations with similar requirements
by sector, region, size etc
• EU and UK rules on aggregation and joining
previously let frameworks or contracts
• nature of the client’s requirement: standard; some
added/amended features; tailored for client
• optimum geographical scope of sourcing and
delivery: local, regional, national, European Economic
Area; global
2.3 Propose the opportunities for sustainable procurement,
and the need to enhance supply to the public sector by
SMEs and minority owned businesses:
• policy on and sources of sustainability:‘green’
procurement including energy efficiency, recycling,
biodegradability; ethical procurement
• mechanisms and EU/UK rules on enhancing access
by SMEs and minority owned businesses: splitting
large contracts eg geographically, by category;
preference schemes; outreach eg meet the buyer,
internet,multilingual documentation
2.4 Plan the appropriate duration of the contract and the
optimum number of suppliers in relation to the nature
of the requirement, the supply market and the
opportunities for aggregation:
• factors impacting on contract duration eg duration
of the requirement;market characteristics eg
technological change, stability/volatility of price,
capacity, storage; EU/UK rules and policy; supplier
relationships
• factors affecting the number of suppliers eg capacity
of the market; impact on competition; range of
products/services included; ease of managing the
supply chain; number and location of customers and
delivery points; scope for enhancing access by SMEs
and minority owned businesses; risk of too few
suppliers
2.5 Manage the specification by involving clients, potential
suppliers, financial and technical experts at an early
stage:
• advantages and disadvantages of performance,
functional and technical specifications for various
products, services, projects
• policy and EU/UK rules on involving potential
suppliers in specification
• types of financial and technical expertise for various
requirements and their sources eg in-house, other
government body, private consultancy
• cross functional team working
2.6 Discuss the intended costs and benefits from the
contract and incorporate targets, incentives,monitoring
and reporting mechanisms for their realisation:
• sources of information on costs and benefits of the