CIPS L4M1 Scope and Influence of Procurement and Supply

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1. What is Procurement? Procurement is a STRATEGIC function of a business obtains something Tangible as

goods or Intangible as services. Include Purchasing Inventory, Logistics, Supply, Waste
Management Quality, Cost, Added Value
2. What is Purchasing? Is the ACT of physically ordering and buying something.
3. What is Supply? Is the INFRASTRUCTURE which ensures that products and services get from supplier to
the customer.
4. What is inventory? the stock of goods, materials or products
5. What is a stock? Asset available in the warehouse
6. What is asset? Value of everything an organization owns
7. Fixed cost Costs do not change (Salaries, Insurance, Rent)
8. Variable Cost Costs do change as they are linked to the business (Raw Material, Extra hours)
9. Directly Cost (Direct Procurement ) Cost associated with the Job or production (Raw material, Man Power)
10. Indirectly Cost (Indirect Procurement ) Not associated with the Job (Clean Liquid, Stationary, Mobile phones contracts, MRO -
Maintenance repairs and Operations.
11. Primary Sector of the Economy The part of the economy that draws raw materials from the natural environment
(Cotton, Oil, Silver, Wheat)
12. Secondary sector of the Economy The part of the economy that transforms raw materials into manufactured goods (Light
Bulbs, Nuts and Bolts, Metal housing, Plastic fittings)
13. Finished goods Units of products that have been completed but not yet sold to customers (Shoes,
Beds, Clothes, Jewellery)
14. Stock Procurement Includes Can be stored and inventory Raw Material, Components and Finished Goods.
15. Non-Stock Procurement Includes Are not stored and not listed in the Organization inventory (Cleaning Services, Internet
Contract, Insurances, Advertising Campaigns)
16. Explain why the procurement department Procurement can influence the majority of the costs within an organization:
should be consulted before an 1.- Evaluating potential suppliers
organization spends money. 2.- Involved in preparing specifications
3.- Review Quality standards
4.- Assess ethical requirements
5.- Compare buy or lease options
6.- Investigate transport
7.- Review packing options.
8.- Research total life cost
9.- Calculate currency differences
10.- Benchmark prices
11.- Ensure assets are fit for a propose
17. Total life Cost (TLC) The total amount a product will cost an organization.
18. Mentioned some examples of NON- Insurance, Marketing, Salaries/Pensions, Cleaning, IT and Catering Services, Staff
STOCK INTANGIBLE procurements. Development, Electricity, Gas, Rent or Mortage.
19. Mentioned some examples of STOCK Components, Stationary, Uniforms
TANGIBLE procurements.
20. Mentioned some examples of CAPITAL Machinery, Buildings, Lands, Vehicles
NON-STOCK TANGIBLE procurements.
21. CapEx (Capital Expenditure) The cost associated to assets of an Organization (The value of a Capital Purchases
reduce overtime, the amount of the asset depreciated)
22. OPEX (Operating Expenditure) Cost Associated with the running of an Organization, such as electricity, labour,
transport, rent, the raw material (Day to day running of the business)
23. What is a budget? Financial plan for a set period on how much can spend money.
24. Depreciation The reduction overtime in the value of an asset held by the company.
25. What should a procurement The TCL - Total Cost of Life, Depreciation.
professional consider when sourcing a
capital purchase?
26. Procurement Process A cross-functional business process that originates when a company needs to acquire
goods or services from external sources, and it concludes when the company receives
and pays for them.
27. What are the stages of the 1.-Understand the need
procurement cycle process? 2.- Market/commodity
3.- Develop a strategy
4.- Pre procure
5.- Develop Documentation
6.- Supplier Selection
7.- ITT/RFQ
8.- BID/TENDER
9.- Contract Award
10.- Warehouse Logistics
11.- Contract Performance
12.- SRM & SC Management
13.- Asset Management
28. List the Pre-award process (Sourcing) From 1 to 8
in Procurement Cycle 1.-Understand the need
2.- Market/commodity
3.- Develop a strategy
4.- Pre procure
5.- Develop Documentation
6.- Supplier Selection
7.- ITT/RFQ
8.- BID/TENDER
29. Mention the award process (Contract/ 9.- Contract Award
PO) in Procurement Cycle
30. List the Post-award process (Contract 10.- Warehouse Logistics
Management ) in Procurement Cycle 11.- Contract Performance
12.- SRM & SC Management
13.- Asset Management
31. Product specification Describes the technical criteria
32. Typical Specification Outlines Description, Drawing, Color, Materials, Quantity, Packing, Quality.
33. Performance Specifications Simple to prepare. Open up the supplier market and promote innovation and competition
by letting suppliers offer the solution to the required need.
34. Conformance Specifications Usually difficult to prepare. Ensure that the product/service is exactly as required and that
there is not variance. (Recipes, Chemical formulas, engineering drawings)
35. Why should a service specification To ensure that the standard of quality demand is met.
contain as many details as possible?
36. Rights of Procurement 1.- Right Quantity
2.- Right Quality
3.- Right Time
4.- Right Place
5.- Right Price
37. Define why the Five rights of procurement and supply are important 1.- Quantity: if is wrong Warehouse Could be overstocked
to the procurement professional. and Production could be stop.

2.- Quality: Essential of getting value of money.

3.- Time: If products are not received, serious

consequences for the production.

4.- Place: Additional cost may be incurred if delivery sent

to wrong destination.

5.- Price: Must be fair and reasonable, need to consider

Currency, Taxes, Incoterms.
38. What is the other right of procurement and supply? Right Source (Selection of the right source is a very
important)
39. TCO (Total Cost of Ownership) The cost incurred by owning a product throughout its
useful life, including acquisition, use maintenance and
disposal.
40. TCA (Total Cost of Acquisition) The cost incurred in acquiring a product from sourcing to
receiving and installed.
41. Elements of TCO TCA
Tooling
Insurance
Operation
Maintenance
Training
Storage
Disposal
42. TCO Formula = TCA (Total Cost of Adquisition) + OC (Operational
Cost) + MC (Maintenance Cost) + DC (Downtime Cost) +
ELC (End Life Cost)
43. What are the TCO & the TCA? The TCO helps to understand how much a product or
service cost an organization to obtain.
44. Elements of TCA Purchase Price
Quality
Lead time
Carriage and Insurance
45. A procurement professional receives two quotations in response to ...
her RFQs for 100 items. What should the buyer do before placing and
order and why?

Supplier 1: Quotes $2 per unit and states that the price is net and
EXW.

Supplier 2: Quotes $2.50 per unit and states that the price is net and
CPT.
46. Net price Exclude Taxes
47. Gross Price Include Taxes
48. KPI (Key Performance Indicator) A measurable value that demonstrates how effectively a
company is achieving key business objectives
49. Qualitative KPIs -Reduce the number of factory rejects
-Achieve ISO accreditation
-Reduce materials wastage during manufacture
50. Quantitative KPIs -Reduce percentage of late deliveries
-Increase number of orders received with correct quantities
-Increase percentages of deliveries correct location
51. Write one qualitative and one qualitative KPI to help a Qualitative: Reduce the number of receiving rejections
supplier to achieve the right quality and the right quantity.
Quantitative: Correct quantities
52. Value for money The relationship between a product is worth and the cash amount
spent on it.
53. Describe in detail five factors that contribute towards CURRENCY/EXCHANGE: Avoid rates fluctuation
getting value for money when procuring goods or
services QUALITY: Needs to be good and meet the specifications

PAYMENT TERMS: Longer gives the company more time to keep the
money in the bank.

TIME: Products and services must be delivered on time to avoid

additional costs.

PLACE: Products and services must be delivered in the right place to

avoid additional costs.
54. What is a supply chain? a system of organizations, people, activities, information, and
resources involved in moving a product or service from supplier to
customer
55. What is Supply Chain Network? Involves individuals, organizations, technology, activities and
resources to make sure goods or services flow along the chain.
56. SCM Formula = Producers + Suppliers or Manufactures + Retails + End Users
57. Mention the main Industry Sectors in Supply Chain 1.- PRIMARY SECTOR: Extraction Industries of natural resources.

2.- SECONDARY SECTOR: Manufacturing and Construction Industries.

3.-TERTIARY SECTOR: Service Industries.

58. Primary (Sectors of Industry) Mining, Drilling oil, Agriculture, Forest, Fishing
59. Secondary (Sectors of Industry) Oil refined into Diesel, Assembly (Cars, Components)
60. Tertiary (Sectors of Industry) Business to support the production and distribution process.
(Insurance, Retails)
61. Stages of supply chain UPSTREAM: Producers, Suppliers, Manufacturers

DOWNSTREAM: Distributors and Customer

62. Upstream Supply Chain the portion of the supply chain from raw materials to the production
facility
63. Downstream Supply Chain the portion of the supply chain from the production facility to the end-
customer
64. Upstream/Downstream chart

65. Stages of supply chain management include suppliers, Manufacturer

producers, distributors, retailers, and:
66. What sector does a procurement professional fit into? All sectors, each interface in the Supply Chain represents movement
of goods., purchase and sale, transfer of title and information flows.
67. Linked all the three sectors in one example. A farmer who grows grapes (Primary), which he then makes into
whine (Secondary) to sell in his wine shop (Tertiary)
68. Explain which of the five elements within the supply chain Transportation: the movements of raw material to manufacture, from
model feature in both the upstream and downstream stages the manufacturer to the distributors, from the distributors to the end
and why? consumer.
69. Explain two differences between a Supply Chain and Supply Chain: Is to procure and supply something to the end user
Supply Chain Network
Supply Chain Network: Is the process of mapping out how raw
materials are manufactured and how to deliver them to the
consumer.
70. Which are the Five areas involved in the supply chain 1.- External Suppliers
network? 2.- Manufacturers
3.- Distribution centres
4.- Logistics
5.- Consumer Demand
71. External Suppliers the businesses or individuals whos going to provide the resources,
services, products, and materials to make the goods or services.
72. Manufacturers the businesses whos going to produce the raw into finished goods
73. Distribution center The business who is going to manage the storage and the
transportation of the products.
74. Logistics The Business who is going to ensure should be at the required time.
75. Consumer Demand The individuals have a need or desired for the end product.
76. Supply Chain Network (SCN) Flows Physical flows: movement and storage of materials end end
products. Tangible parts.
Flow= One way only

Information flows: Include organization strategies, process control

and communication way
Flows = Two ways
77. Supply Chain Values Price
Delivery
Storage
Ethics
Environmental
Sustainability
Communication
Quality
78. SCM (Supply Chain The management of information flows between and among activities in a supply chain to
Management ) maximize total supply chain effectiveness and profitability
79. Procurement Includes the Preparing Specifications
following: Monitoring Quality
Sourcing
Buying
Stock Control
Disposal of waste
80. Is about obtain products and Procurement
services in response to a need.
81. Is about obtain the Supply Chain
infrastructure involved in
physically getting the products
and services delivered.
82. Have TIERS SUPPLIERS Complex Supply Chain
83. Tiers of Suppliers structure

84. Complex Supply Chain Network

85. What is logistics? Logistics is the process of planning, implementing, and controlling procedures for the efficient
and effective transportation and storage of goods. Including services and related information
from the point of origin to the point of consumption for the propuse of confirming to the
customer requirements.
86. Internal logistics The process that is related to turning the RAW MATERIALS into the desired end product
(Extraction/Production, Manufacturing, Warehousing/storage)
87. External Logistics The process that is related to Distributions, Transports and retails.
88. Areas managed by Logistics Demand Planning
Fleet Management
Inventory Management
Warehousing and Storage
Order Fulfilment
89. Demand Planning determining how much product a business needs to make to satisfy all its customers'
demands
90. Fleet Management Covering solutions to physically transport goods form one place to another by fleets
of vehicles.
91. Inventory Management Determining how much stock is available
92. Warehousing and storage Makes product selection quick and easy.
93. Order fulfillment When products cannot be found or are not the right quantity, the distribution element
of logistics cannot happen, and orders can be left unfulfilled.
94. What is material Management? is a part of the supply chain. It covers the handling, storage, inspection and issuing of
raw materials, components and finished goods.
95. MRP (Material Requirements Planning) Master Production Scheduling
functions: Bill of Materials
Inventory Tracking
96. MRP II (Manufacturing Resource Planning Machine Capacity Scheduling
II) functions: Demand Forecasting
Quality Assurance
General Accounting
97. ERP (Enterprise Resource Planning) Financial Management
functions: Supply Chain Management
Material Management
Procurement Management
Order Management
Time & Expense Management
HR & Pay Roll Management
Project Management
Document Management
98. Describe how an MRP or ERP system can Its a useful tool to helps in more effective and efficient way to reduce costs in the
help procurement. organization. ERP includes: Procurement, Supply Chain Management and Material
Management.
99. Stakeholders Are any individuals or groups of individuals that have an interest or who can be
affected by an organization's activities.
100. Internal Stakeholders Involved directly within Organization (employees, owners, board of directors)
101. External Stakeholders Have an interest in the organization (Customers, Banks, Suppliers and the Local
Community).
102. Who stakeholders is affected directly and Employees
indirectly by the Organizations actions.
103. Who stakeholder has power to influcence Investors
the Organization decisions?
104. Who stakeholder would be concerned if Directors
the project/organization succeeded or
failed?
105. Who stakeholder has personal interest in Owner
the Project Organization.
106. Who stakeholder will be Consumers
benefited from the success
of the project/organization?
107. Who stakeholder could help Managers
solve the problems?
108. Who stakeholder sets the Regulatory bodies
regulation that must be
adhered to?
109. Who stakeholder carries out banks
related actions.
110. What does MRP stands for? Used in Manufacturing environments
111. What does an organization to the successful operation of an organization.
need both internal and
external stakeholders?
112. What is the ISO An organization claiming to work to certain standards will be audited to make sure that they are
accreditation for quality? conforming with the required standards.
113. Technic to managing groups Mendelow's Matrix
of stakeholders
114. Mendelow's Matrix

115. Which are the four Keep Satisfied

techniques for managing Manage Closely
groups of stakeholders Minimun Effort
according to mendelow. Keep Informed
116. Keep Satisfied high power, low interest
117. Manage Closely high interest and high power
118. Minimun Effort low power, low interest
119. Keep Informed low power, high interest
120. Keep Safety stakeholder Investors, Shareholders
121. Manage Closely Senior Managers (Internal), Government (External)
stakeholders
122. Minimun Effort stakeholders Small customers, Small suppliers
123. Keep Informed stakeholders Local Activist groups
124. What are the definitions of Procurement is about obtaing products and services in response to a need while a supply chain is
procurement and supply infrastructure involved in physically getting the prodcts and services delivered. The fundamental
and how the two functions difference is the Supply Chaing Management continues until the end product reaches the consumer.
complement each other The role of procurement could have ended long before this stage
125. That procurement can be stock, non stock, direct, indirect, capital or Budget
operational.
126. The different types of procurement that ensure spend is associated with the CAPEX OPEX
correct organizational budget.
127. The five rights of procurement Quality, Quantity, Price, Place, Time
128. Total life Costs, which elements add to the value and organization can get Quality, Innovation and Sustainability)
from effective buying strategy.
129. Other sources add Value Aditinal features
Brand
Excelense of service
Market Development
Reduce cost of imputs
Reputation
Invention
Sustainability: working w/sustainable supplieris
goos practice for CSR (Corporate Social
Responsability)
130. Supply chain and how to manage them ...
131. What type of procurement is specific to a CAPEX buget? Budget manages capital purchases (assets of an
organization, machinery land or property). The
value of capital purchases reduces overtime, the
amount of the asset depreciated
132. What type of procurement is specific to a OPEX buget? Budget manage operations expenditure. (cost
associated with the running of an organization,
such as electricity, labour or waste collection.
Day-to-day running of the business, Rent, Raw
material, Salary, Insurance, Transport.
133. How is the procurement directly attributable to the end product referred to? ...
134. Explain what an extension of a supply chain is ...
135. What are the differences between a performance and a conformance Performance: Exactly details
specification? Conformance: Les complex
136. An Organization sells heavy-duty pdlocks to an stablished customer base the ...
organization has manufacturing capabilities a warehouse facility and skilled
workers with years of experience making padlocks. Explain which of the
goods or services listed below you should be made and which should be
bought , given the reason for your decisions.
• Best-selling padlocks sold to several core customers
• Worst-selling padlocks sold to spot customers
• Cleaning contract
• Recriutment of temmporary staff
137. To fulfill a need Make or Buy Decision
138. make or buy decision rule avoidable costs + opportunity costs > Outside
purchase price
BUY

avoidable costs + opportunity costs < outside

purchase price
MAKE
139. Make or buy decision Chart

a decision concerning whether an item should be produced

internally or purchased from an outside supplier
140. Invitation to Tender (ITT) Outlines 1. Documents to sent out to invite bids
2. Formal
3. Suppliers are often pre-evaluated
4. Used when purchasing complex products or services
5. Using whe purchasing hihg-value products or services.
141. Request for Quotation (RFQ) Outlines 1. Document sent out to invite quotations
2. Informal
3. Suppliers not usually pre-evaluated
4. Using when purchasing standard, regulary used products or
services
5. Using when purchasing low value products and services
142. Why might bids or quotations differ between suppliers even ...
though all have received the same documentation?
143. Procurement Cycle Stage 1 Understand the need and developing a High-level
specification (Identify and define the need)
144. Procurement Cycle Stage 2 Market Commodity and options (Make or buy)
145. Procurement Cycle Stage 3 Develop Strategy Plan (Sourcing)
146. Procurement Cycle Stage 4 Pre-procurement, market test and market engagement (Market
study)
147. Procurement Cycle Stage 5 Develop documentation (Terms and conditions)
The information in the ITT or RFQ should include:
1. Description and specification
2. Quantity
3. Delivery details
4. Service Level Agreement (SLA) Agreement
between the supplier and the buyer based on quantity,
delivery, availability and other measurable criteria.
5. Terms and conditions.
148. Procurement Cycle Stage 6 Supplier selection to participate in TT/RFQ negotiation. -
optional stage-
Ask to complete PREQUALIFICATION
1. QUESTIONARIES (PQQs)
2. Company History
3. Financial Activity
4. Insurance
5. Memberships of professional bodies
6. Quality accreditations
7. Capabilities
8. Helath and safety
9. CRS policy
10. Code of ethics
11. Conflict of Interest
149. Procurement Cycle Stage 7 Issue ITT/RFQ
RFI Is used to gather information before selectin which supplier will be asked to bid.
RFQ is the formal invitation asking a supplier to submit a bid.
150. Procurement Cycle Stage 8 BID/TENDER/QUOTATION Evaluation.
Cross-functional teams are often involved when evaluating tenders. It's important to
consider the TCO.
151. Procurement Cycle Stage 9 CONTRACT Award and Implementation
Bids or quotations have been evaluated a decision can be made as to which supplier
should be awarded the contract.
152. Procurement Cycle Stage 10 WAREHOUSE, LOGISTICS AND RECEIPT
Whit the correct process in place, the warehousing logistics and receipt of contracted
products should run efficiently.
153. Procurement Cycle Stage 11 CONTRACT PERFORMANCE REVIEW (KPIs)
Once a contract is established the supplier should be reviewed. (Contract performance
management)
154. Procurement Cycle Stage 12 STAGE 12: SRM AND SCM AND DEVELOPMENT (Supplier Relationship Management)
SCM LEVEL
1. Type of product/Service supply
2. Length of contract
3. Stage of Contract
4. The competitiveness of the Marketplace
155. Procurement Cycle Stage 13 STAGE 13: ASSET MANAGEMENT AND LESSONS LEARNED. review the contracts in
place and check that it still meets the organization needs.
156. Understand the Need Is generated from the Customer and communicated to the Buyer.
Description of what is required
Quantity required
Delivery Time and Place of what is required
Quality of what is required
157. Request for Information RFIs may refer COMPETENCY: Supplier can supply the goods/services required?
to Carter´s 10 Cs method
CAPACITY: Supplier have the machinery time and resources to supply the
goods/services?

COMMITMENT: Supplier have commitment to supply quality products?

CONTROL: Is the supplier in control of the Supply Chain?

CASH: Is the supplier in a good financial position?

COST: Is the supplier offering a fair cost? TCO

CONSISTENCY: Is the supplier is able to deliver the same product time after time.

CULTURE: Suplier´s culture fit with the customer´s culture

CLEAN: Is the supplier green? Enviromentally friendly

COMMUNICATION: Is the supplier able to communicate with the buying organization

as needed.
158. Product Life Cycle
Chart

159. Product Life Cycle introduction, growth, maturity, decline and product extension, are the stages through which goods and
services move from the time they are introduced on the market until they are taken off the market.
160. Pre-award contract 1 . Understand the Need
stages 2. Market Commodity Options
3. Develop a strategy/plan
4. Pre procurement market test
5. Develop Documentation
6. Supplier selection
7. Issue ITT/RFQ Bid/Tender/Quotation evaluation
8.-Bed/Tender (Optional)
161. Award Contract stages 9.- Contract Award
162. Post-award contract 10. Warehouse, Logistics and receipt
stages 11. Contract Performance
12. SRM and Contract Management
13. Asset Management
163. Sourcing Process 1 . Understand the Need
Procurement Cycle 2. Market Commodity Options
Stages 3. Develop a strategy/plan
4. Pre procurement market test
5. Develop Documentation
6. Supplier selection
164. Supplier selection 7. Issue ITT/RFQ Bid/Tender/Quotation evaluation
Procurement Cycle 8.-Bed/Tender (Optional)
Stages 9.- Contract Award
165. What is the purpose of Mesure the performance
a KPI?
166. What is Creation of Is the developing terms and conditions and other legal requirements of bidders. A procurement
Contract Terms agreement has two components.
167. Offer concept A promise or commitment to perform or refrain from performing some specified act in the future.
168. Offer Details Price / Delivery / Packaging / Frequency / LeadTime / Quality / Minumum Order / Quantity (MOQ) /
Payment Terms
169. Is a response of ITT and Offer
RFQ
170. Acceptance concept the action of consenting to receive or undertake something offered
171. Unconditional Acceptance of an offer exactly as it is presented.
acceptance
172. Counter offer Different response from the original offer (amended details, such as price)
173. Express terms Terms in a contract that are specifically stated.
(Price, Delivery, Packaging, Frequency, LeadTime, Quality, Minumum Order, Quantity (MOQ), Payment
Terms)
174. Implied terms Terms in a contract that can reasonably be supplied by the courts.
Are assumed to exist and are linked to common law. Such terms do not have to be
mentioned in the contract. By law, they are present even if not shown.
175. Explain why is important to understand the To avoid the risk of unknown implied terms. Some countries have similar processes
laws of the country in which a buyer is and standards, while others have very complex, potentially confusing, implied
carrying out a procurement activity. terms.
176. Name four areas of a supplier´s performance Quality, Lead time, Price, Quantity
that are monitored by KPI´s
177. Service Level Agreement (SLA) Part of a service contract where the service expectations are formally defined.
178. KPI´s should be SMART. S pecific
M easurable
A chievable
R elevant
T ime bound
179. Explain three problems a buyer could face if Supplier Capacity Issues
they award a contract to a supplier that they Supplier Financial Issues
have not evaluated? Supplier Country Law (Implied Issues)
180. What information is included in the ITT/RFQ 10 C's
documentation that a buyer sends to COMPETENCY
evaluated and selected suppliers? CAPACITY
COMMITMENT
CONTROL
CASH
COST
CONSISTENCY
CULTURE
CLEAN
COMMUNICATION
181. Kraljic's Portfolio Matrix

182. Use of Kraljic's model with the suppliers. To identify the cost and risk impact of working with four groups of suppliers.
Leverage Suppliers
Strategic Suppliers
Routine Suppliers
Bottleneck Suppliers.
183. Public sector approach supplier evaluation The part of the economy that involves the transactions of the government. These
are regulated and generally have the most stringent policies and procedures to
follow when seeking and evaluating suppliers.
184. Private sector approach supplier evaluation The part of the economy that involves the transactions of individuals and
businesses. These are unregulated about which suppliers they choose to work with
and can approach and evaluate any supplier for any contract.
185. How is added value achieved in the Is more than get a good deal in relation to price and on time and in full delivery (OTIF)
procurement? Additional features
Brand
Convenience
Excellence of service
Market development
Reduced Input Costs
Reputation
Innovation
Sustainability
186. Types of Supplier Relationships Collaborative: When the supplier is strategic

Distributive: Short period time suppliers.

187. Collaborative Supplier Relationships Information is shared
aspects Needs are understood and attempted to be met
Common goals, strategies and objectives
Focus on Teamwork, openness and trust
Long-Term relationship
Open communication
Promotes supplier relationship
188. Distributive Supplier Relationships Information is withheld
aspects No effort to understand the other side
No shared goals
One sided, aims to meet own needs only
Often results in win-lose situation
Usually short-term or one -off relationship
Little communication
Focuses on contract management
189. Supplier Relationship Management focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for
(SRM) different projects.
Manage the relationship
Monitor the Performance
Maintain Strategy
Manage change
190. Understand the Need purpose To ensure the need is as per the consumer's requirements and is clearly defined to
(Stage-1) potential suppliers.
191. Market Commodity Options purpose To help buyer become aware of the current prices and trends and whether it would be
(Stage-2) preferable to make or buy
192. Develop a strategy/plan purpose To evaluate the competition and decide which type of suppliers to approach.
(Stage-3)
193. Pre-procurement market test purpose To review demographics and trends and evaluate the life cycle stage of the need.
(Stage-4)
194. Develop Documentation purpose To set out the criteria on which an offer is to be submitted against. To assess which
(Stage-5) suppliers meet the buyer's criteria prior to conducting further evaluation.
195. Supplier selection purpose (Stage-6) To evaluate the short-listed suppliers to ensure they fit with the buyer's organization, and
that they can fulfil the need.
196. Issue ITT/RFQ Bid/Tender/Quotation To give the suppliers the chance to provide an offer with a view to being awarded a
evaluation purpose (Stage-7) contract.
197. Bed/Tender /Quotation evaluation To assess the best cost and value for money to meet the need.
purpose (Stage-8)
198. Contract Award purpose (Stage-9) To state the requirements of the buying organization and give the
supplier visibility of the expected performance.
199. Warehouse, Logistics and receipt purpose (Stage-10) To check goods/services as required.
200. Contract Performance & SRM and Contract Management To ensure efficient and effective running of the contract, develop
purpose (Stages-11 & 12) relationships and manage change.
201. Asset Management purpose (Stage-13) To assess changing business requirements and whether the need is still
valid. To calculate end-of-life costs and review the lesson learned.
202. Select three stages of the CIPS Procurement Cycle and 1. To ensure the need is as per the consumer's requirements and is
explain how they add value to the sourcing process. clearly defined to potential suppliers.

2. To evaluate the competition and decide which type of suppliers to

approach.

3. To give the suppliers the chance to provide an offer with a view to

being awarded a contract.
203. Describe three advantages and three disadvantages of 1. Quicker than manual process
using e-requisitioning systems. 2. Traceability
3. Save Cost in Long Term

1. Large investment to install e-system

2. Reliant on Technology
3. Training
204. What is MRP? Explain its purpose? is an Enterprise Resource Planning tool used for reduce cost to the
organization in a more efficient and effective way.
205. Why e-negotiation might be problematic in a negotiation because many forms can be time bound and some emails can often
for a strategic product or service. be misinterpreted.
206. Select one area of procurement and justify how it could Stage 8 Quotation evaluation gives the buyers the chance to
reduce the cost of an organization. counteroffer the supplier to get a better price.
207. Pay to Pay Systems (P2P) advantages in procurement. Reduce errors
Reduce waste
Reduce Costs
Faster Payment
Continuous Improvement
Enhanced Relationships
208. 8 + wastes of Lean DOWNTIME
D efects
O verproduction
W aiting
N on utilized Talent
T ransport
I nventory
M otion
E xcess-processing + L ack of training
209. Describe how an EDI System could improve the Electronic Data Interchange - the PO's Delivery Notes and Invoices are
procurement process. more quicker. Improves cashflow, environmentally friendly, real time
visibility.
210. Describe three problems which an organization could More risk because of poor decisions made, lack of transparency and
face if there are no structured processes within the traceability.
organization.
211. compliance Is about adhering to regulations, following legislation and conforming
to rules.
212. Compliance areas Standards
Regulations
Legislation
Control
Strategies
Policies
Audits
Risk
213. Cover by Ethics Human slavery
Working conditions
Trafficking
Bribery
Coercion
Conflict of interest
214. Ethics moral values
215. Sustainability The ability to keep in existence or maintain. A sustainable ecosystem is one that can be
maintained
216. CSR (Corporate Social A business's concern for the welfare of society.
Responsibility)
217. Why a buyer should not enter Because of the risk of products and services not being delivered and could result in reputational,
into contracts with suppliers if financial problems for the organization.
they are not sustainable?
218. CSR policy document written by the organizational which is internally regulated and contains information on
how an organization will be a responsible part of the community locally and globally.
219. CSR policy cover Charity
Ethical Behavior
Sustainability
Environmental policies
220. Carroll's Global Corporate
Social Responsibility Pyramid

221. win-win matrix

222. What is corporate governance? is a system of standards, procedures and policies by which organization is controlled , its a
framework created around the organization's values and objectives. Making and organization
effective, efficient and successful and their procedures and policies ethical.
223. What is a conflict of Interest? A conflict of interest describes a situation where someone within an
organization has opposing loyalities.
224. 4D Model Used to address a potencial conflicts of interest.
Disclose
Distance
Delegate
Disassociate
225. Disclosed revealed; made known there is a conflict of interest
226. Distance The individual should distance themselves from the associated deal
227. Delegate A person appointed or elected to represent others
228. disassociate break apart from the deal.
229. Explain why any potential conflict of interest to maintain an ethical behaivor
should be disclosed.
230. Code of Ethics outlines Framework
Reputation
Protection
Focus
Involvement
Diversity
231. Explain how code of ethics could support a promotes ethical behavior, contributes with the organization reputation and
buyer. protection against fraud.
232. The CIPS Code of Conduct Promotes ethical process within procurement and supply
233. policy is a document outlining how a business will conduct it-self. These policies may
be based on the following:
Organizational Objectives
Legislation
Regulation
Standards
234. procedure a method or way the policy will be carried out.
235. Purposes of policy and procedure Ensure Conformance
Ensure compliance
Protect from coercion, bribery or fraud
Organizational protection
Continuity of supply
Promote efficiency
Promote ethical behavior
Provide references
Assist audit processes
Aid with legal cases
236. What information may be used to write policies Organizational Objectives
and procedures. Legislation
Regulation
Standards
237. Organization Accountability Is about all members of the business working together to achieve the
objectives.
238. Accountability can be enhanced through the 1. Defining clear roles and promoting team leaderships.
following. 2. Promoting a sense of ownership for team results
3. Providing freedom, control, support and ownership
4. Not focusing on the negatives and embracing the positives.
239. Within procurement accountability 1. Confirming the CIPS Code of conduct.
relates to 2. Compliance with any ethical policies.
3. Conducting supplier appraisals fairly and transparently
4. Awarding contracts to the most suitable and cost-effective supplier
5. Managing spend to keep within budget constraints
6. Ensuring specifications are representative of the need
7. Addressing or reporting on potential areas of concern.
240. The Global standard identifies five 1. Tactical
levels of competency describing 2. Operational
capabilities and individual should have 4. Managerial
at each competency level. 5. Professional
6. Advanced Professional
241. Tactical Level Applies key tasks associated with the work of procurement and supply (Administrative
Assistant, Purchasing assistant, Contracts Admin, Stock Controller, Inventory Planner,
Assistant Buyer , Assistant Contracts officer.)
242. Operational Level Provide Advice and guidance to the key stakeholders on the performance of
organizational procedures and processes connected with the procurement and supply.
(Buyer, Procurement Executive, Procurement specialist, Contracting Officer, Supply Chain
Analyst.)
243. Managerial Level Develops, improves and fulfills organizational and functional objectives in procurement
and supply. (Senior Buyer, Chief buyer, Category Manager, Contract Manager, Contract
Officer, Logistics Manager, Supply Chain Executive.)
244. Professional Level Formulates direction and advice, manages change and leads and influences both internal
and external stakeholders in procurement and supply. (Strategic Procurement Manager,
Senior Category Manager, Supply Chain Manager, Head of Logistics, Operation Manager.)
245. Advanced Professional Level Leads Procurement Teams within an organization and influences the board to adopt
leading-edge procurement strategies and establish best practice, influences supply markets
with innovate sourcing solutions. (Procurement Director, Supply Chain Director,
Commercial Director, Head of sourcing, Chief Procurement Officer.)
246. Select and explain two reasons why To promote efficiency to meet the objectives and ethical behavior to avoid any conflict of
documented policies and procedures interest.
are needed within procurement.
247. Explain how procurement reporting budget variance, poor practices, reduce cost,
professional can hold themselves
accountable within their role.
248. Explain how the status of Contributes to the success of the business, in the Private sector: Make a profit on the
procurement and supply chain goods or services that they provide. in the public sector spend the money responsibly in
management has envolved and what an effective and ethical way and in the third-party organization on Charities and non-profit
has contributed towards this. organizations cause to raise awareness and provide help.
249. Identify three purposes of policies ...
and procedures.
250. Why do you think an expeditor or because they have a tactical level of competence.
junior buyer could not conduct the
tender?
251. Procurement Manuals Created from the organization's procedures to enable buyers to undertake their roles in
keeping with the organization's strategy to be carried out.
252. Procurement Policies and manuals Competition
includes: Ethics
Key performance Indicators (KPIs)
Quality
Supplier Appraisal
Supplier Evaluation
Sustainability
Transparency
253. Advantages of procurement Provides guidance
strategies, policies and manuals. Gives continuity
Promotes Ethical Behavior
Retains Control
Reduces risk
Treats all suppliers similarly
Gives procurement credibility
Prevents non procurement team members sourcing/buying
Gives the procurement function focus
Promotes accountability
Forms part of corporate governance
254. Disadvantages of procurement Removes Innovation
strategies, policies and manuals. May restrict supplier base
Everyone uses the same technique/tactic
Buyers lose their individuality
Makes all the relationships very formal
Suppliers may resent having to conform
255. Explain two Advantages and two Provides Guidance and reduce risk
disadvantages of using procurement
manuals. Removes innovation and buyers loose their individuality
256. Procurement Strategies Are formed a high level and are keeping with the entire organization's objectives and
contribute to the success or failure of an organization. Procurement policies evolve form
procurement strategies.
Strategies must constantly evolve in line with market forces.
257. Procurement Strategies includes: Achieving Cost reductions
Adding value within the supply chain
Encouraging local supply
Environmental issues
Ethical Improvements
Fair trade
Just in time (JIT) implementation - lean manufacturing system to reduce waste in SC
unnecessary inventory
Improved quality
Reducing the amount of suppliers
Achieve sustainable competitive advantage
Innovation
258. Influences of Procurement Strategy Operations
Forecast
Competition
Organizational Objectives
Economy
Budgets
259. Lewin's Model unfreezing, moving, refreezing
260. Lewin's Model Chart

261. Types of Change Step and Incremental

262. Expenses are plotted against the budget and any difference in value is referred to as a variance.
263. Variance formula VARIANCE = ACTUAL SPEND - BUDGET

If the resulting amount is positive figure, this means that the budget has been exceed. If it is negative
amount this means that the organization has come in under budget.
264. Request a Budget. Reporting of variances
Reduce Cost.
Reduce over Volumes.
Change suppliers.
Cancel Orders.
265. OBJECTIVES OF PRIVATE SECTOR: Make a profit on the goods or services that they provide. Is not just about the mark
PROCUREMENT AND up (expression of profit as a percentage of costs) is about securing products and services cost-
SUPPLY CHAIN effectively and reducing the costs associated with the handling of procurement dispatch were possible.
MANAGEMENT:
PUBLIC SECTOR: spend the money responsibly in an effective and ethical way. Money spends efficiently.

THIRD-PARTY ORGANIZATION: Charities and non profit organizations cause to rise awareness and
provide help.
266. Aspects that can be Responsibilities of procurement
included in procedures Regulations relating to competition
for procurement and Levels of delegated authority
supply Responsibilities for the stages of sourcing process
Invoice payment and clearance
267. From the reporting of Request a Budget.
variances , buyers may Reduce Cost.
need to do the Reduce over Volumes.
following. Change suppliers.
Cancel Orders.
268. Competition Policies. Intellectual Property
Cartels
Merger Control
Monopolies
269. Intellectual Property Prevent competitors from copying new ideas, registered by the inventor, for a period of time.
Policy
270. Cartels Policy Prevent price fixing, limiting supply and agreements to avoid competition within the marketplace.
Cartels are illegal in many countries and organizations can face large fines.
271. Merger Control policy The control mergers within business to maintain competition.
272. Monopolies policy avoid one organization having sole control of the market (no competition)
273. Regulations relating has to be conducted fairly and the procedures written for PROCUREMENT PROFESSIONAL need to
competition in ITT's & helps to promote transparency, genuine and honest.
RFQ's
274. step change Procurement strategy affected by a significant event.
275. incremental change constantly reacting to events.
276. Procurement function in sourcing Supplier Evaluation, Information gathering, specification collation, RFQ/ITT creation and
process evaluation, Purchase order placing, contract management.
277. Sales function in sourcing process Guide Procurement on stakeholders needs, suggest sales figures to enable correct
volumes to be secured
278. Finance function in sourcing process Set budgets, payments terms and credit limits. Analyze potential suppliers financial
performance.
279. Human Resources function in sourcing Ensure staff are treated ethically and that working conditions are acceptable.
process
280. Operations function process Help with testing, cost models, overhead costs, training that may be required bring in the
new business to increase volume
281. Research and Design Create specifications, give input on component from functionality and quality
perspective, helps with the cost reduction ideas.
282. Economic of scale Factors that reduce in the cost of a good by increasing bargain power. (Lower cost of
production and maximizes profit)
283. International Labour Organization (ILO) UN agency to Protect people against exploitation in the workplace.
284. The tripartite structure of the ILO Employees
Employers
Governments.
285. Core conventions need to be consider 1. Freedom of Association and protection of the right to Organize
before to evaluate a supplier. 2. Right to organize and collective bargaining
3. Forced Labor
4. Abolition of forced labor
5. Minimum age
6. Worst forms of child labor
7. Equal remuneration
8. Discrimination (Employment and Occupation)
286. Types of Procurement or Supply Chain Centralized, Devolved and Hybrid
Structures.
287. Centralized Structure One person or team/department is responsible for buying for whole organization whit
more cost effective strategy ordering from one central point.
288. Devolved Structure Procurement carried out at local levels. Each department manage their own budget and
purchases.
289. Hybrid Structure A mix of centralized and devolved. Can take several forms. Consortium: Group of
customers buy in big lots using one purchase order to get a lower price.
290. Hybrid structures Consortium structures
Shared Services
Lead buyers Structures
Outsourced
291. Benefits of the centralized Promotes economics of scales.
procurement strategy. Stronger supplier relationships.
Reduction in expenses
Efficient use of skills and resources
292. Disadvantages of the centralized Not supportive of local economy
procurement strategy. Increased autocracy
Less accountability
Lack of control
293. Benefits of the devolved procurement strategy. Direct communication with the supplier.
Fast Delivery
Local suppliers supported
Fewer procedures
Specialist product knowledge
294. Disadvantages of the devolved procurement Price may not be negotiated to the best value
strategy. Economies of scale not used
Supplier relationships not valued
Total cost of ownership may not be monitored
Higher risk of fraud and embezzlement
295. Describe why you think is mportant that The eight conventions helps the buyers to make informed decisions which
procurement professionals are aware of the ILO's suppliers are behaving in an acceptable way and helps to identify unethical
core conventions. behaviors.
296. What are economies of scale? Lower prices using fewer staff with increase efficiency.
297. Consortium structures When similar Organizations or organizations with the same tangible or
intangible needs collaborate for their mutual benefit. (obtain better cost for
higher volume)
298. Consortia forms Loose: To obtain better pricing and share related information. lack of formal
structure
Voluntary: formal arrangement, Involves a Purchasing Manager on belief of
the organization within the group.
Regional: Centralize structure based on geographical area.
Profit-marking: lower buying prices the profit margins increase.
Member-owned: buying groups have to pay a joining fee or annual
subscription to take advantages.
299. Consortium Advantages Economics of Scale
Additional negotiating skills
Lower Prices
Reduce workloads
Improvement of the bes practices
Shared and increase knowledge
Enhanced Quality
Reduce level of risk
300. Consortium Disadvantages Reduce Control
Internal Conflict
Reduced competition
Increased supplier lead times
Supplier relationship lost.
301. Shared Services form of centralize structure often used in hybrid structures when two or
more agencies combine resources to accomplish certain activities or goals.
302. What are the common functions that can be Human Resources
structured as shared services? Administration
ICT
Finance
303. What are the objectives of shared services? Create uniformity fun polices, procedure and standards
Continues improvement
To save costs
304. What are the propose of shared services? Reduce the amount of individual administration to support activities and
standardize across an organization to reduce cost an improve the quality.
305. Shared Services Advantages Reduces Cost
Provide high level of skill and knowledge
Put focus on core activities
Pools resources
Avoids duplication of work
Information all held in one central Location.
306. Shared Services Disadvantages Risk of breaching Departamental confidentiality is increased
Resistance to change from workforce
New processes and procedures take time to adopt
Auditing more challenging
Avoids duplication of work
Information all held in one central location
307. Lead buyer structures occurs when on organizational department, or individual takes the responsibility of purchase a
specific product or service.
308. Advantages of Lead buyer Individual experience and skills
procurement Economics of scale can be achieved
Reduce workload compared with the devolved procurement.
309. Disadvantages of Lead buyer Prices will not be competitive.
procurement Products or services may not suit all parties
Ethical breaches
Reduce control
Increased the risk
Same suppliers may get multiple orders with could have been collated to reduce cost.
310. Outsourced procurement fits into hybrid structure and enable the organizations to focus on their core activities.
311. Advantages of outsourced Cost reduction
procurement Reduce trading cost
Lower headcount - fewer procurement staff required.
Economics of scale
access to highly skilled buyers.
312. Disadvantages of outsourced Lack of Control
procurement Technological problems with company integration systems
313. rapport involves mutual trust and understanding and harmony built on good communication.
314. Internal rapport good interaction to avoid conflict
315. Trust Matrix
316. Rapport methods Positive Boddy language
Make eye contact
Liste and use positive gestures for emphasis
Ask Questions
Be empathetic
Respect all ideas
Remove preconceptions
Be Honest
Justify opinions and feedback
317. Justify the reason for built rapport with promote good working relationships, mutual respect to ensure that acquisitions and
suppliers of bottleneck products or request are understood to avoid the risk of non-conformance and prevent potential issues
services. or misinterpreting.
318. customer service Activities and benefits provided by a business to its customers to create goodwill and
customer satisfaction
319. Maslow's Hierarchy of Needs

(level 1) Physiological Needs, (level 2) Safety and Security, (level 3) Relationships, Love
and Affection, (level 4) Self Esteem, (level 5) Self Actualization
320. What contributes Value for money? 5 rights of procurement (Price, Place, Time, Quality & Quantity)
Innovation
TLC
Customer Service
321. IT systems used in procurement P2P System The procure to pay
Inventory Management
Enterprise Resourcing Management (ERP)
322. Inventory Management Systems Material Requirement Planning (MRP)
Just in Time (JIT)
KABAN
323. What modules are available in ERP Supply Chain Management
Systems Manufacturing
Human Resources
Project Management
Finance accounting
Customer Relationship Management
324. Types of communication Machine to Humman
Humman to Machine
Machine to Machine (M2M)
325. IT Systems Advantages Speeds up processes
Reduce Errors
Increase control
Not reliant on human input
Aids traceability
No distortion in communication
Receipt of messages can be tracked
326. IT Systems Disadvantages Impersonal
No relationship
Job looses
Costly implement
IT Support for system required
Power failures
327. What is a sector? is the way of classifying an organization in relation to the way funded.
328. Types of sectors Public
Private
Third
329. public sector the part of an economy that is controlled by the government.
330. private sector the part of the economy that involves the transactions of individuals and
businesses
331. Third Sector the part of the economy of non-profit organizations support and promote
social, environmental or cultural objectives
332. Public Sectors services Universal healthcare
Education
Military
Emergency Services
333. Private Sectors services Supermarkets
Manufactures
Sole traders: Carpenters, Hairdressers, Accountants
Partnerships: Private limited companies (Ltd) Business consultants, IKEA,
Small market traders
Public Limited Companies (Plc.): Telco, Rolls Royce, Macdonalds
334. The shares of a private limited company Cannot be bought and sold on the stock exchange
335. The shares of a Public Limited Company Are traded on the stock exchange and belong to investors.
336. Third Sector services Charities
Co-operatives
Voluntary and community Organizations
Trade Unions and profesional Organizations
337. Economic Sectors: Primary, Secondary, Tertiary
differences

338. Where Public sector fit in the industrial Tertiary classification (Education, Medical, social housing)
classification?
339. Where Private sector fit in the industrial Primary: Mining, oil extraction, agriculture
classification? Secondary: Manufacturing, Construction and processing
Tertiary: Hospitality, professional services.
340. Where Third sector fit in the industrial tertiary: Charities, Profesional bodies CIPS, Fundations.
classification?
341. Who funds the public sector? Tax payers
342. Why private sector regulations are less strict than Because in the public sector the spends must be justify and be accountable
public sector regulations? for the tax payers.
343. Procurement procedures in public sector Open
Restricted
Competitive dialogue
Competitive procedure with negotiation
344. Monopoly Complete control of a product or business by one person or group
345. Public accountability include Transparency
Efficiency
Responsibility
Integrity
Trustworthiness
346. market share a company's product sales as a percentage of total sales for that industry
347. elements to achieve the good reputation Best Price
with the customers Good Customer Service
Value for money
Reliability
Availability
Strong ethics policy
Sustainability
348. Integral Regulations CIPS code of conducts
Code of Ethics
Anti Bribery policy
Sustainability Policy
Environmental awareness
Transparency
Accountability
349. Brand Basic things What the product is?
What the product can do?
What the product is the desired chose?
350. Branding the process of naming and identifying products and services
351. Goods branded Heinz, Coca cOLA
352. Services Branded DHL, FEDEX,
353. Retail Branded Walmart, zara
354. People Branded Bill Gates, Donald Trump
355. Destinations Branded Maldives, dubai
356. Companies Branded Amazon Google facebook
357. Concepts branded Smartphones, electric vehicles
358. What is Early supplier involvement? The involvement of a supplier in product development process from a very early
stage in order to use the supplier experience and expertise.
359. What are the main benefits of involving meet specification
suppliers early? Improve Quality
Reduce costs
Built trust and long term relationship between organizations.
360. The Internation Organization for National Directory of Commodity Specifications in USA.
Standardization ISO9001 is equal to
361. Through life contracts A contract gives a contractor sole accountability for the design, acquisition, operation,
maintenance and disposal of an asset.
362. What are the six main components of a through- 1. SCOPE
life specification? 2. DEFINITION
3. DESCRIPTION OF REQUIREMENT
4. TESTIN AND ACCEPTANCE
5. CHANGE CONTROL MECHANISM
6. SOCIAL AND ENVIRONMENTAL CRITERIA
363. What are the typical parts of a through-life Design
requirements in Customer Support? Manufature
Installation
In-service support
Decommission and disposal
364. What are the benefits of through-life management Lower Cost
Lower risk
Closer match between the asset delivered and the user's needs
Development of capability over the life
365. What is the main propose of SCOPE in through- Design, Life and Disposal
life?
366. What is the main propose of DEFINITION in User requirement Document (URD) propuse of the machine what is the
through-life? specter Outcome. (What is the need of the user?)
367. What is the main propose of DESCRIPTION OF Write a clear description of the requirement.
REQUIREMENT in through-life? What to expect of the product of service
Why does the user want to do this
Describe the triggers the use of the product/Service
Detail any constraints the user might have.
368. What is the main propose of TESTING AND ACCEPTANCE TESTS tell a business whether it built the right thing
ACCEPTANCE in through-life? (From the end user, end testing or field testing on operational testing).

FUNCTIONAL TESTIN: tell it whether the product that had been built.
(From the manufactures)
369. What are the five main types of ACCEPTANCE 1. ALPHA AND BETHA
TESTING? ALPHA: Testin during the design
BETHA: Testin in real scenario (customers permit softhware)

2. CONTRACT ACCEPTANCE TESTING (product testing against the the

standards)

3. REGULATION ACCEPTANCE TESTING (Regulations required by law)

4. OPERATIONAL ACCEPTANCE TESTING (from the customers)

5. BLACK BOX TESTING. (softwares inputs/outputs)

370. What are the reasons of CHANGE THE Stakeholder change the mind about the functionality or the cost of the product or
SPECIFICATION in through-life? service.

The new sponsor of the contract takes over and has different ideas about the product
or service.

The buying organization's strategy changes and this forces a change in the product or
service or even the cancellation of the project.

A change in regulations forces a change to the specification scope or requirements.

As work on the specification starts, the assumptions behind the requirements and
scope my be challenged and weaknesses found or better alternatives identified.

Lack of resources for the contractor means that a change in the specification may be
needed in order to complete the project on time.

Technology is updated, with can have either a positive impact (new opportunities are
opened up) or a negative impact.
371. Shows a typical process for identifying Describe the Change
and approving charges to a specification. Review the change
Look at options
Final approval
372. What are the factors and influence of Media Views of the industry
SOCIAL? Work ethic and working practices
Brand, Company, technology image
Lifestyle trends
Cultural taboos
Consumer attitudes and opinions and their buying patterns
Buying access and trends
Publicity
373. What are the factors ENVIRONMENTAL Helps to understand the markets and producing specifications.
CRITERIA? Natural disasters
Waste
Pollution
Energy efficiency
374. Risk from inadequate specification needs not meet the requirements, failures and accidents
375. Under-specification wrong product, not supplier capacity
376. over-specialization unnecessary cost up, not suppliers capacity
377. What are the three factors that determine The impact of the risk
the importance of a risk? Risk being detected before it causes any damage
Risk being eliminated.
378. Four step process for managing a risk 1. Identify
2. Access
3. Control
4. Monitor
379. Four Ways to Mitigate Risk 1. Tolerate
2. Treat
3. Transfer
4. Terminate
380. How to Monitor the Risks? Project initiation Document (PID)
Scope over run
Time over run
Cost over run
381. Monitor Specifications creations by Accountability
stakeholders More focus on the goals of the specification
Learning from the experience
Team morale
382. Project initiation Document (PID) is an important document and should precede any specification writing project.
383. PID -Provide a background to the specification
-Provide the initial definition and scope of the specification
-Detail any constraints or dependencies
-List any assumptions made
-Provide an Outline business case for the specification.
-Identify the benefits expected fro the specification
-Provide roles and responsibilities for all those involved in writing or -
Approving the specification.
-Provide a stakeholder map.
-Provide a communication Plan
-List the acceptance criteria for the specification.
384. How to implement standardization in product 1. Individual Parts and components
manufactured 2. The end products
3. Process
385. Standardization benefits COST REDUCTION (inventory, flor space reduction, mass production)
QUALITY (Product, continuos Improvement, supplier reduction)
FLEXIBILITY (Inventory Reduction, Internal material logistics)
RESPONSIVENESS (Parts availability, quicker deliveries from supplier)