CIPS L4M8 COMPREHENSIVE ALL QUESTIONS AND
ANSWERS SET A+
✔✔There are four types of leadership that suppliers may require - ✔✔- Delegating
- Supporting
- Coaching
- Directing
✔✔TUPE (Transfer of Undertakings (protection of employment) regulations are
designed to - ✔✔protect employees from losing their jobs if a contract is moved from
one supplier to another
✔✔The following outlines the new employers position in a TUPE transfer - ✔✔Control:
Takes over controls of all the employees contracts
Obligations: Takes over all obligations set out in the employees contracts
Agreements: Takes over any collective agreement made on behalf of the employees
while in their previous employment
Terms: Must give the same or better terms as the previous contract
Communication: Must communicate with employee representatives to keep them
informed of the situation
✔✔The implementation of new contracts includes four stages - ✔✔Stage 1 - Transition
Stage 2 - Start-up
Stage 3 - Operations
Stage 4 - Management
✔✔To ensure the mobilisation, implementation and management of the contract are
successful, these four stages should be followed - ✔✔1. A good transition from the
current to the new supplier
2. Clear guidance and support at the start-up stage
3. Operational compliance and guidance
4. Contract and supplier management
,✔✔Managing contracts is all about making sure that goods and services are delivered
as the correct time and place and to the specifications required, whereas supplier
management is about - ✔✔forming and developing relationships with suppliers and their
organisations
✔✔Pareto rule - ✔✔also known as the 80/20 rule, meaning that 80% of the effects
come from 20% of the cases
✔✔ABC analysis - ✔✔A technique to categorise suppliers into three groups of
decreasing value
✔✔ABC analysis: Category A - ✔✔These suppliers represent 20% of the total amount
of an organisations suppliers yet receive 80% of the total company spend
✔✔ABC analysis: Category B - ✔✔These suppliers represent 30% of the total amount
of an organisations suppliers yet receive only 15% of the company spend
✔✔ABC analysis: Category C - ✔✔These suppliers represent 50% of the total amount
of an organisations suppliers yet receive only 5% of the total company spend
✔✔Kraljic Matrix: Routine - ✔✔Low profit impact, Low supply risk
✔✔Kraljic Matrix: Bottleneck - ✔✔Low profit impact, high supply risk
✔✔Kraljic Matrix: Strategic - ✔✔High profit impact, High supply risk
✔✔Kraljic Matrix: Leverage - ✔✔High profit impact, Low supply risk
✔✔Key benefits of a collaborative relationship include - ✔✔- Shared information
- Innovation
- Reduced defects
- Improved quality
- Continuity of supply
- Stable supply chain
- Cost reduction
✔✔Joint venture - ✔✔A business agreement where two or more parties share and pool
resources on a project
✔✔Joint ventures between suppliers and buyers are an example of a co-destiny
relationship.
Joint ventures include sharing the following - ✔✔- Ownership
- Control
- Risk
, - Profit
- Loss
✔✔Managing suppliers or contracts can be done in a variety of ways - ✔✔- Service
Level Agreements (SLA)
- Key Performance Indicators (KPIs)
- Management By Objectives (MBO)
- Reviews
- Continuous improvement
- Training
- Amendments
- Back-up plan
✔✔Service Level Agreements (SLAs) are clauses in a contract between a supplier and
a buyer. The purpose of an SLA is to - ✔✔ensure that suppliers meet the expected and
agreed level of service
✔✔Andrew Hiles explains SLAs as being - ✔✔An agreement between the provider of a
service and its users, which quantifies the minimum quality of service that meets
business needs. The term 'customer' is often applied to refer to the user of a service
✔✔SLAs are based on output. They are designed to - ✔✔define exactly what the buyer
will receive. They do not describe or dictate how the service should be conducted or
received by the buyer
✔✔SLAs allow the buyer to monitor - ✔✔supplier performance, which is part of supplier
management
✔✔When preparing SLAs, procurement professionals should consider four principles -
✔✔- The service levels should be reasonable, becuase unnecessarily high levels of
service could result in a higher cost to the organisation
- They should be important to the buyer
- They should be simple and easy to monitor
- The should be understood by all parties
✔✔Using KPIs to manage suppliers and contract performance gives the following
advantages - ✔✔- Supplier motivation
- Improved communication
- Improved quality
- Early identification of risk
✔✔MBO (management by objectives) is the process of - ✔✔defining objective that are
strategic to the organisation, relating them to the mission and vision and communicating
them to both internal and external stakeholders
ANSWERS SET A+
✔✔There are four types of leadership that suppliers may require - ✔✔- Delegating
- Supporting
- Coaching
- Directing
✔✔TUPE (Transfer of Undertakings (protection of employment) regulations are
designed to - ✔✔protect employees from losing their jobs if a contract is moved from
one supplier to another
✔✔The following outlines the new employers position in a TUPE transfer - ✔✔Control:
Takes over controls of all the employees contracts
Obligations: Takes over all obligations set out in the employees contracts
Agreements: Takes over any collective agreement made on behalf of the employees
while in their previous employment
Terms: Must give the same or better terms as the previous contract
Communication: Must communicate with employee representatives to keep them
informed of the situation
✔✔The implementation of new contracts includes four stages - ✔✔Stage 1 - Transition
Stage 2 - Start-up
Stage 3 - Operations
Stage 4 - Management
✔✔To ensure the mobilisation, implementation and management of the contract are
successful, these four stages should be followed - ✔✔1. A good transition from the
current to the new supplier
2. Clear guidance and support at the start-up stage
3. Operational compliance and guidance
4. Contract and supplier management
,✔✔Managing contracts is all about making sure that goods and services are delivered
as the correct time and place and to the specifications required, whereas supplier
management is about - ✔✔forming and developing relationships with suppliers and their
organisations
✔✔Pareto rule - ✔✔also known as the 80/20 rule, meaning that 80% of the effects
come from 20% of the cases
✔✔ABC analysis - ✔✔A technique to categorise suppliers into three groups of
decreasing value
✔✔ABC analysis: Category A - ✔✔These suppliers represent 20% of the total amount
of an organisations suppliers yet receive 80% of the total company spend
✔✔ABC analysis: Category B - ✔✔These suppliers represent 30% of the total amount
of an organisations suppliers yet receive only 15% of the company spend
✔✔ABC analysis: Category C - ✔✔These suppliers represent 50% of the total amount
of an organisations suppliers yet receive only 5% of the total company spend
✔✔Kraljic Matrix: Routine - ✔✔Low profit impact, Low supply risk
✔✔Kraljic Matrix: Bottleneck - ✔✔Low profit impact, high supply risk
✔✔Kraljic Matrix: Strategic - ✔✔High profit impact, High supply risk
✔✔Kraljic Matrix: Leverage - ✔✔High profit impact, Low supply risk
✔✔Key benefits of a collaborative relationship include - ✔✔- Shared information
- Innovation
- Reduced defects
- Improved quality
- Continuity of supply
- Stable supply chain
- Cost reduction
✔✔Joint venture - ✔✔A business agreement where two or more parties share and pool
resources on a project
✔✔Joint ventures between suppliers and buyers are an example of a co-destiny
relationship.
Joint ventures include sharing the following - ✔✔- Ownership
- Control
- Risk
, - Profit
- Loss
✔✔Managing suppliers or contracts can be done in a variety of ways - ✔✔- Service
Level Agreements (SLA)
- Key Performance Indicators (KPIs)
- Management By Objectives (MBO)
- Reviews
- Continuous improvement
- Training
- Amendments
- Back-up plan
✔✔Service Level Agreements (SLAs) are clauses in a contract between a supplier and
a buyer. The purpose of an SLA is to - ✔✔ensure that suppliers meet the expected and
agreed level of service
✔✔Andrew Hiles explains SLAs as being - ✔✔An agreement between the provider of a
service and its users, which quantifies the minimum quality of service that meets
business needs. The term 'customer' is often applied to refer to the user of a service
✔✔SLAs are based on output. They are designed to - ✔✔define exactly what the buyer
will receive. They do not describe or dictate how the service should be conducted or
received by the buyer
✔✔SLAs allow the buyer to monitor - ✔✔supplier performance, which is part of supplier
management
✔✔When preparing SLAs, procurement professionals should consider four principles -
✔✔- The service levels should be reasonable, becuase unnecessarily high levels of
service could result in a higher cost to the organisation
- They should be important to the buyer
- They should be simple and easy to monitor
- The should be understood by all parties
✔✔Using KPIs to manage suppliers and contract performance gives the following
advantages - ✔✔- Supplier motivation
- Improved communication
- Improved quality
- Early identification of risk
✔✔MBO (management by objectives) is the process of - ✔✔defining objective that are
strategic to the organisation, relating them to the mission and vision and communicating
them to both internal and external stakeholders
