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Topics and Skills

Stay up to date with new thinking and current guidelines through the CIPS Knowledge area. The Knowledge content has been mapped against relevant books, events and other key procurement topics to provide you with the knowledge you need.

Brexit

On the 23 June 2016, the UK voted to leave the European Union; a relationship that had lasted for more than 40 years.

Brexit has already had economic and political effects as measured by the CIPS surveys amongst the procurement community and the Markit/CIPS Purchasing Managers’ Indices (Markit/CIPS PMI®). The issue will continue to create waves in procurement and the wider business community, around the world for many years to come.

The flash Markit/CIPS PMI® in July showed that the UK economy had contracted at the steepest pace since 2009 and that both new orders and output fell for the first time since the end of 2012. Though, the PMIs subsequently showed a mixed picture of highs and lows since the vote.

The Brexit surveys asked slightly different questions and offered different insights such as delays of just half an hour at  customs could cause one in ten businesses to go bankrupt and consumers already paying the price of Brexit twelve months ahead of official separation.

More surveys are planned for 2019.

Continuous Improvement

Also known as 'Kaizen', continuous improvement means 'change for the better' and encompasses all people, products, services and processes in an organisation.

It consists of making continual small improvements that require close monitoring and control, and are ideally inbuilt in the organisation's culture, as opposed to big changes made at irregular intervals.

CIPS Knowledge related topics, best practice guides and white papers include: benchmarking, total quality management and BPR.

Developing and Managing Contracts

Developing the contract allows both parties to fully understand their obligations and key success criteria. This forms the foundation to manage the contract and relationship effectively.

CIPS Knowledge related topics, best practice guides and white papers include: demand management, purchase order cycle, performance analysis and management, setting key performance indicators, cost reduction, terms and conditions and developing of contracts, contract management and intellectual property, and potentially for 'if things go wrong' conflict resolution.

eCommerce Systems

An effective way of communicating and an efficient way of conducting business.

eCommerce systems, including eSourcing and eProcurement, are widely used to buy and sell products, and can utilise technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems and automated data collection systems.

CIPS Knowledge related topics, best practice guides and white papers include: eSourcing/ eProcurement systems P2P, application of technology, MRP/CRP, and coding and classification.

Efficiency

The degree to which something is done well or without wasted energy or effort. It is a measurable concept, quantitatively determined by the ratio of output to input.

CIPS Knowledge related topics, best practice guides and white papers include: collaborative working, BPR and value generation.

External Environment

A business does not exist in isolation and is influenced by other factors that cannot be controlled.

Typically referred to as the ‘external environment’, this consists of competitors, the economic, social, monetary system and the political/legal system.

CIPS Knowledge related topics, best practice guides and white papers include: legislation and carbon/climate.

Game Theory

The scientific modelling of interactions between different parties each pursuing their own interests.

In Game Theory the parties interact and choose their action according to what the other parties might think and do.

Innovation and Technology

Innovation in procurement and supply management supports the identification and development required to bring about product or supplier development, supply chain or business process improvement, leading to competitive improvement or advantage.

Operations Management

The business function responsible for designing and managing products, processes, services and supply chains.

The Operations Management team ensures efficient business operations using as few resources as possible whilst achieving customer requirements. It also controls the process that converts inputs, such as material, labour and energy, into outputs in the form of good and/or services.

CIPS Knowledge related topics, best practice guides and white papers include: warehousing, stock control, logistics and incoterms.

People and Skills

People are the most important asset in the organisation, translating other resources into added value and achieving organisational objectives.

Strategic and operational management and development of people is crucial to ensure they feel valued and businesses retain the right skill set.

CIPS Knowledge related topics, best practice guides and white papers include: leadership and promotion of people and skills management, influencing skills, financial analysis and reporting for purchasers, marketing for purchasers, change management, project/programme management and career development.

Procurement Organisation

Procurement topics related specifically to the procurement organisation.

CIPS Knowledge related topics, best practice guides and white papers include: supply chain governance and carbon/climate.

Risk Management / Mitigation

Risk management in procurement involves understanding risks that can impact an organisation and implementing strategies to mitigate and manage those risks.

CIPS Knowledge related topics, best practice guides and white papers include: risk analysis and management, diligent procurement and fraud and transparency.

SRM and SCM

Supplier relationship management (SRM) and Supply chain management (SCM).

Supplier relationship management (SRM) involves managing the interfaces between you and the organisations supplying you with goods and/or services. It involves creating closer, more collaborative relationships to maximise value and reduce risk.

Supply chain management (SCM) involves managing the flow of goods. It includes the movement and storage of raw materials, work-in-process inventory and finished goods from source to consumption with the objective of creating value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance.

SRM is an important part of SCM to ultimately create the right relationship and environment to make supply chain efficiencies and increase the organisation's profitability.

CIPS Knowledge related topics, best practice guides and white papers include: supplier relationship management supplier development, models such as supply chain, sourcing, procurement and cost, global supply chains, agile supply, lean, supplier coordination and association along with supplier positioning.

Strategy and Policy

A procurement policy refers to a statement or set of guiding rules or principles covering how procurement should be managed within an organisation.

A procurement strategy is an action plan from which the direction of resources will be organised and used to implement that policy and achieve the desired objectives.

CIPS Knowledge related topics, best practice guides and white papers include: feasibility study development, procurement policy development, procurement strategy development, models such as supply chain, sourcing, procurement and cost, balanced scorecard, BCM/BCP, complex procurement, cost reduction, setting key performance indicators (KPI’s), category management, business case development, whole life costing, negotiation.

Supplier / Bid / Tender Evaluation

Supplier evaluation is the process of evaluating and approving existing and potential suppliers by quantitative assessment against specific business criteria.

This can be a carried out with current suppliers in order to measure and monitor their performance, providing the required management information to drive cost reductions, mitigate supply chain risk and deliver continuous improvement activities. Similarly, the process can be carried out with new suppliers at a pre-qualifying stage prior to a tender or as part of the tender evaluation stage. Once the tenders are submitted, they must be evaluated in order to select the preferred supplier. Whether tendering contracts for the supply of goods or services, tender evaluation should be carried out in a structured, disciplined and transparent manner.

CIPS Knowledge related topics, best practice guides and white papers include: supplier evaluation and appraisal and sourcing and tendering.

Sustainability

In procurement terms, sustainability takes into account social, economic and environmental factors alongside the typical price and quality considerations of procuring products and services.

Sustainable procurement helps organisations to eliminate waste, become more energy efficient and ultimately save money.

CIPS Knowledge related topics, best practice guides and white papers include: sustainable and ethical procurement and corporate social responsibility (CSR).

Understand Need - Market and Options Assessment

Procurement must understand the needs of the business and the status of the supply market, and therefore in-depth internal and market and options assessment is required.

CIPS Knowledge related topics, best practice guides and white papers include: commodity specific knowledge, market development, market analysis, sourcing, specification development, data analysis/business intelligence, mergers and acquisitions, cartels/competition, outsourcing/offshoring and insourcing and commissioning.