Scope and Influence of Procurement and Supply (L4M1)

1.2 Analyse the different sources of added value in procurement and supply

• 1.2.1 The five rights of procurement
• 1.2.2 Defining total life cycle costs or whole-life asset management
• 1.2.3 Achieving five rights of procurement from external suppliers
• 1.2.4 Other sources of added value: innovation, sustainability and market development
• 1.2.5 Defining value for money

1.3 Describe the categories of spend that an organisation may purchase

• 1.3.1 Typical breakdown of organisational costs represented by procurement of goods, services and constructional works
• 1.3.2 Stock and non-stock procurement
• 1.3.3 Direct and indirect procurement
• 1.3.4 Capital purchases and operational expenditures
• 1.3.5 Services procurements
• 1.3.6 Utility procurement
• 1.3.7 Commodity procurement

1.4 Differentiate the stakeholders of procurement or supply chain functions

• 1.4.1 Definition of stakeholders
• 1.4.2 Examples of stakeholders of a procurement and supply chain function
• 1.4.3 Mapping stakeholders for a procurement and supply chain function

2.1 Explain each stage of the CIPS Procurement Cycle

• 2.1.1 CIPS Procurement Cycle: pre-contract award stages (stages 1-8 of the CIPS Procurement Cycle) for generic procurement and supply activities
• 2.1.2 CIPS Procurement Cycle: post-contract award stages (stages 9-13 of the CIPS Procurement Cycle) for generic procurement and supply activities

2.2 Analyse each stage of the CIPS Procurement Cycle in relation to adding value

• 2.2.1 The purpose and added value created at each pre-contract award stage (stages 1-8) of the CIPS Procurement Cycle
• 2.2.2 The purpose and added value created at each post-contract award stage (stages 9-13) of the CIPS Procurement Cycle

2.3 Explain how electronic systems can be used at different stages of the CIPS Procurement Cycle

• 2.3.1 Definition and function of e-requisitions, e-catalogues, e-auctions, e-tendering and online supplier evaluation systems
• 2.3.2 The application of electronic systems at each pre-contract award stage (stages 1-8) of the CIPS Procurement Cycle
• 2.3.3 The application of electronic systems at each post-contract award stage (stages 9-13) of the CIPS Procurement Cycle

2.4 Analyse the relationship between policy and process compliance and required outcomes

• 2.4.1 Organisational and contextual drivers for structured procurement and supply processes
• 2.4.2 Understanding and balancing the relationship between policy and process compliance with securing added value and customer service outcomes in different contexts

3.1 Explain aspects of corporate governance impacting the procurement or supply chain function

• 3.1.1 Conflicts of interest
• 3.1.2 The need for documented policies and procedures for procurement
• 3.1.3 Organisational accountability and reporting for procurement roles and functions
• 3.1.4 Code of ethics in procurement and supply: CIPS Code of Ethics and ILO (International Labour Organization) core conventions
• 3.1.5 The CIPS Code of Conduct

3.2 Analyse the impact of organisational policies and procedures on procurement and supply

• 3.2.1 Topics included in procedures for procurement and supply: responsibilities for procurement, regulations relating to competition, levels of delegated authority, responsibilities for the stages of the sourcing process, invoice clearance and payment
• 3.2.2 The use of procurement policies, procurement strategies and procurement manuals
• 3.2.3 The involvement of internal functions and personnel in the procurement process

3.3 Examine the different structures of a procurement or supply chain function

• 3.3.1 The role and status of procurement and supply chain management within different organisations
• 3.3.2 The use of centralised and decentralised structures
• 3.3.3 The use of hybrid structures in procurement and supply chain functions

3.4 Explain the common IT systems that can be used by a procurement or supply chain function

• 3.4.1 P2P systems
• 3.4.2 Systems for inventory management
• 3.4.3 Enterprise resource planning (ERP)
• 3.4.4 Communications systems for internal and external use
• 3.4.5 Systems used to support e-sourcing, e-tendering and e-auctions

4.1 Classify different economic and industrial sectors

• 4.1.1 Economic classifications including public and private sectors, charities, not-for-profit and third sector
• 4.1.2 Industrial classifications and sectors such as manufacturing, retail, construction, financial, agriculture and service

4.2 Analyse the impact of the public sector on procurement and supply chain activities

• 4.2.1 Objectives of public sector organisations: improving services, supporting communities and social value, and equality, diversity and inclusion
• 4.2.2 Regulations that impact on procurement and supply chain operations
• 4.2.3 Role of competition, public accountability and value for money in public sector procurement and supply activities

4.3 Examine the impact of the private sector on procurement or supply chain activities

• 4.3.1 Objectives of private sector organisations: market share, shareholder value, environmental, social, governance and economic viability
• 4.3.2 Regulations that impact on procurement and supply chain operations
• 4.3.3 The importance and role of an organisation’s branding in procurement and supply activities

4.4 Examine the impact of the not-for-profit or third sector on procurement or supply chain activities

• 4.4.1 Objectives and principles of the not-for-profit or third sector
• 4.4.2 Regulations that impact on procurement and supply chain activities in charity and third sectors
• 4.4.3 Need for procurement and supply activities to align with organisation context mission and objectives