Description
Second edition - now in stock!
The Official CIPS Course Books are the only ones approved by CIPS giving you the best possible preparation for your exams.
CIPS Course Books offer you:
• clarity and user-friendliness
• learning outcomes to highlight potential examination topics
• self-assessment questions to check your progress
• real examination questions with model answers
Our Course Books are:
• an excellent resource for both students and teachers
• ideal for all modes of study
• an invaluable aid to busy professionals working towards their purchasing and supply qualifications
Second edition amendments
As a result of the amendments to the learning objectives and statements of practice, several alterations have been made to this course book.
In section 10.3, two new paragraphs describe the balanced scorecard concept and the plan–do–check–act (PDCA) cycle and their relevance to purchasing performance.
In learning activity 2.4, the balance sheet and profit and loss account in figure 12.8 has been updated and amended. A new section, 12.5, has been added to study session 12, to describe the nature of cashflow analysis and why it is important in the supplier appraisal process.
In section 13.2, two additional bullet points have been inserted to describe the importance of a supplier’s research and development activity and cultural adaptation on the part of the supplier.
Finally, at the end of section 15.6, a paragraph has been inserted on the nature of personality profiling and how it can be used to measure and improve individual purchasing performance.
Contents
Introduction
Unit content coverage
Study session 1: Introduction to performance management in purchasing and supply
The importance of performance management in business
Introduction to performance management in general and purchasing and supply in particular
Introduction to cost management in organisations and the link with purchasing performance
Continuous improvement in business, and the link with purchasing performance management
Continuity of supply, and the link to measuring purchasing performance
The importance of measuring purchasing and supply chain performance in public and private sector organisations
Study session 2: Adding value to the business
Added value performance management in corporate business operations: general principles
Added value opportunities
Measuring value added performance achieved by purchasing and supply
Adding value by reducing inventory costs and administration and using consignment stocks
Added value opportunities of negotiating: improved procurement and contract terms with suppliers
Adding value by improving operational efficiency
Study session 3: Categories of performance measurement
How do purchasing and supply managers contribute to the KPI targets set by corporate management?
How do purchasing and supply managers select and set KPIs for their core: business operation?
Purchasing’s contribution to improved service and the bottom-line profit
Selecting KPIs to measure management of departmental purchasing process and supply chain costs
Selecting KPIs that link to the purchasing infrastructure within an organisation
Purchasing competence and the link to business objectives
Study session 4: Cost and price measures
The bigger picture: costs and forces that determine a price within a market
Basic cost analysis: how costs are allocated and accounted for in a commercial organisation?
Introduction to cost price analysis: how are variable costs managed?
Using cost analysis and measuring your purchasing performance
How are fixed costs managed?
Study session 5: Inventory management measures
Stock: its place and value in business operations
The cost of holding stock
Building up the stockholding cost base and identifying links to performance management
Stores and inventory key performance indicators
Managing inventory KPIs within the wider supply chain
Study session 6: IT and data management
Information systems in business and the links with supply chain systems used to measure performance
The key elements of a purchasing IT system
The added value issues and linked performance indicators for managing the purchasing function
The added value issues and processes in managing the performance of suppliers
The added value issues and processes in managing the performance of buyers
Best practice: which KPIs will help supply chain managers reduce cost and improve service?
Study session 7: Why measure suppliers?
Supplier performance and business success
Supplier performance measures within the procurement function
Performance measurement and ‘quality management’
Supplier measurement and the building of relationships
Measurement in supplier selection and supplier evaluation
Performance measurement for mutual advantage
Study session 8: Steps in the supplier measurement process
The key stages in the buying process
Steps in a pre-award assessment
Steps in a post-award evaluation
Internal and external supplier feedback and corrective action
Continuous review and the supplier measurement process
Study session 9: About measurement tools
Using the right performance measurement ‘tools’
Qualitative and quantitative measures of performance
Planning measurement systems and ensuring data availability
Involving others in the measurement process
A desk-based or visit-based approach?
Study session 10: Performance measurement
Generic methodologies for post-award performance measurement
Simple vendor rating
Perception-based rating
The benefits of using weighted measurements
Third party involvement and testing procedures
Audit and the planning of an audit trail
Study session 11: Communication
Communication and business relationships at strategic, tactical and operational levels
Communication, performance measurement and relationship building
The importance of good communication mechanisms within performance measurement systems
Good communications and the resolution of disputes and management of conflict
Study session 12: Financial appraisal
The role and input for the finance department
The benefits of undertaking corporate financial appraisal
Specialist third-party versus internally led financial appraisal
Financial appraisal measurement tools
Cashflow analysis
Study session 13: Other performance measures
Internal and external commercial relationships
Other areas of measurement activity
Joint performance measurement initiatives
Benchmarking and supplier surveys
Study session 14: Supplier development and supplier account management
Developing and controlling suppliers in a more positive way
The need to identify key suppliers
About supplier development
About supplier account management
Study session 15: Why measure buyers’ performance?
Performance management and the buyer
Performance management and the organisation
3 Periodic, ongoing and annual measurement
The links with reward and advancement
Problems with poorly managed measurement schemes
The wider view, and Investors in People
Study session 16: Cascading targets and objectives
Managing by objectives
Targets and objectives, and the business-planning process
Designing positive and SMART objectives
Timescales for objectives
Problems with objective-setting
Feedback, audit and review of the objective-setting process
Study session 17: Appraisal and evaluation techniques
Formal and informal appraisal and evaluation techniques
Quantitative and qualitative measurement approaches
Interview-based appraisal
Self-assessment
Involving others in the appraisal process
Problems with the appraisal process
Study session 18: Training and staff development
Developing a training needs analysis
Job profiles, job descriptions and their influence on a TNA
Focused versus non-focused training and development
The different types of training available
Continuous professional development
Evaluating the success of training
Study session 19: Information and individual performance management
The importance of data in the measurement process
Accessing corporate and departmental planning
Types of data used
Sources of usable data
Study session 20: Buyer and supplier performance links
The weaknesses of existing approaches to performance measurement
The wider involvement of stakeholders
Performance measurement links to suppliers
Performance links with other stakeholders
Revision questions
Feedback on revision questions
References and bibliography
Index
Essential Reading
The book to accompany this module is The Performance Prism by Neely, Adams and Kennerley