Advanced Contract and Financial Management (L5M4)

1.2 Evaluate methods of measuring and improving contract performance

• 1.2.1 Sources of data and analysis of data in relation to cost, quality, delivery, safety, and ESG (Environmental, Social, and Governance) considerations
• 1.2.2 Measures supporting the improvement of ESG (Environmental, Social and Governance) considerations
• 1.2.3 Measures supporting the improvement of innovation in procurement and supply
• 1.2.4 Measures assessing product development time to market
• 1.2.5 Role of qualitative and quantitative data to measure and improve contract performance
• 1.2.6 Calculate and analyse return on investment for the use of data in measuring contract performance
• 1.2.7 Assess opportunities for data systems integration across supply chains

1.3 Examine approaches available for supplier contract performance

• 1.3.1 Context and scope for supplier contract development
• 1.3.2 Supplier capability assessments
• 1.3.3 Learning, knowledge, and technology transfer between and across organisations
• 1.3.4 Collaborative product/service development: cross functional working, early supplier involvement, supplier networks, supplier co-ordination and supplier forums
• 1.3.5 Continuous improvement strategies, action plans, and reviews

1.4 Assess scope and developments to improve ESG (Environmental, Social, and Governance) considerations in supply chains

• 1.4.1 Environmental measures
• 1.4.2 Social and social value measures
• 1.4.3 Governance measures
• 1.4.4 New supply chain finance

2.1 Assess the market factors that influence strategic sourcing

• 2.1.1 Industry dynamics
• 2.1.2 Pricing behaviour
• 2.1.3 Financial data relating to suppliers
• 2.1.4 Market demand and supply factors
• 2.1.5 Business motivations, cost margins, and working practices of key suppliers
• 2.1.6 Internal stakeholder involvement
• 2.1.7 ESG (Environmental, Social, and Governance) considerations

2.2 Examine the assessment of sourcing options and trade-offs for strategic supply of products and/or services

• 2.2.1 Contract type and duration
• 2.2.2 Competitive vs. non-competitive sourcing
• 2.2.3 Number of suppliers and vetting strategies
• 2.2.4 Marketplace competition and the role of competition regulators
• 2.2.5 Direct negotiation
• 2.2.6 Joint proposition improvement
• 2.2.7 Supply chain visibility

2.3 Analyse a strategic assessment plan for a key supplier using modelling and analytical techniques

• 2.3.1 Capacity and capability
• 2.3.2 Planning
• 2.3.3 Quality control systems
• 2.3.4 Security
• 2.3.5 Technical expertise
• 2.3.6 Reputation and time established
• 2.3.7 Trading with competitors
• 2.3.8 Future expansion opportunities – partnership potential
• 2.3.9 Sensitivity analysis and calculation of investment outcomes based on a range of assumptions
• 2.3.10 Supplier performance based on financial data: calculate percentage change in revenues, costs, and profits
• 2.3.11 Sales forecast data and calculation of variances when comparing sales forecast data with the wider market

3.1 Analyse how finance can impact on supply chains

• 3.1.1 Role of financial management in supply chains
• 3.1.2 Options and risks of working capital funding and the role of credit insurance
• 3.1.3 Project funding options and assessment of cost of capital using weighted average cost of capital (WACC)
• 3.1.4 Medium and long-term financing options
• 3.1.5 Financing of investments, corporate financing options, and the role of dividends

3.2 Appraise methods for managing the volatility of currencies in supply chains

• 3.2.1 Calculation of changes in indices to inform cost analysis
• 3.2.2 Fixed and floating exchange rates
• 3.2.3 Demand and supply factors in foreign exchange and the reasons for exchange rate volatility
• 3.2.4 Spot, forward, and derivative instruments in foreign exchange
• 3.2.5 Services provided by the banking sector in foreign exchange

3.3 Analyse methods for managing the volatility of commodities

• 3.3.1 Types of commodities
• 3.3.2 Operation of commodity markets
• 3.3.3 Role of speculation in commodity markets
• 3.3.4 The operation of spot, forward, futures, and hedging in the buying and selling of commodities
• 3.3.5 The operation of Contract for Difference (CFD) in commodity markets

4.1 Assess financial measures that can be applied to the performance of the supply chain

• 4.1.1 Calculation and evaluation of performance measures linked to cost, time, quality, and customer satisfaction
• 4.1.2 Calculation and evaluation financial measures of efficiency (ROCE), cash flow, sales growth, investment (IRR and NPV), and variances over time
• 4.1.3 Assessment of measures: stock turn, share yield, and earnings per share
• 4.1.4 Use, interpretation, and limitations of balanced scorecards

4.2 Examine the impact of stakeholder feedback on the supply chain performance

• 4.2.1 Purpose of stakeholder feedback in developing supply chain performance
• 4.2.2 Devising metrics of performance including feedback from third parties and suppliers, and other stakeholders
• 4.2.3 Receiving feedback, reporting structures, and processes

4.3 Analyse approaches to benchmarking that can be applied to measuring supply chain performance

• 4.3.1 Use and limitations of benchmarking in supply chains
• 4.3.2 Supplier involvement in performance improvement
• 4.3.3 Ethical approach the collection, storage, and use of benchmarking data