CIPS L4M1
Study online at https://quizlet.com/_72qbbf
1. Stakeholders: In any activity an organization undertakes, whether strategic,
operational or tactical, the activity can only be successful with the input, commitment
and support of its key stakeholders. Gaining and maintaining the support and
commitment of stakeholders requires a continuous process of engaging the right
stakeholders at the right time and understanding and managing their expectations.
2. Global Supply Chains: a dynamic worldwide network when a company pur-
chases or uses goods or services from overseas. It involves people, information,
processes and resources involved in the production, handling and distribution of
materials and finished products or providing a service to the customer.
3. Whole Life Costing: takes into account the total cost of a product or service over
its lifetime, from concept through to disposal including purchase, hire or lease, main-
tenance, operation, utilities, training and disposal. It is important for procurement to
take all these elements into consideration when making decisions and comparing
the costs of buying, renting or leasing equipment particularly. In most cases the
purchase costs are only a small proportion of the cost of operating it.
4. Stakeholder mapping: A systematic way to identify the expectations, needs,
importance, and relative power of various stakeholders.
5. Value Generation: Creating value from the supply base can be achieved by not
only focusing on price but also increasing operational performance, driving efficien-
cies, working collaboratively or developing continuous improvement activities.
6. Procurement Cycle: the cyclical process of key steps when procuring goods or
services.
7. Steps of the Procurement Cycle: 1. Understand Need and develop High level
Spec.
2. Market/Commodity and options (inc make or buy assessment).
3. Develop Strategy/plan
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine with 1.
6. Supplier selection to participate in ITT/RFQ/negotiation.
7. Issue ITT/RFQ.
8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
8. Contract Management: delivers a great amount of data and intelligence that
support the smooth running of a business. Historically, the purpose of a contract
as a legal document was to protect the parties from negative consequences of its
, CIPS L4M1
Study online at https://quizlet.com/_72qbbf
breaches. Today, when companies are facing increasing pressures to reduce costs
and improve financial and operational performance, forming and managing new
trading relationships is critical for success. How well an organisation manages its re-
lationships with partners defines the two core elements of bottom line performance:
increasing revenues and decreasing costs. ... plays an important role by ensuring
the smooth running of operations, protecting the organisation from risks and shaping
the buyer-supplier relationships (Aberdeen Group, 2007; Saxena, 2008).
9. Application of Technology: E-Procurement systems can be utilised in the Re-
quest for Information (RFI), Request for Proposal (RFP) and Request for Quotation
(RFQ) process as well as for e-Tendering, e-Auctioning, vendor management, cat-
alogue management, purchase ordering, order status, shipment status, e-invoicing,
e-payment and contract management.
10. eSourcing / eProcurement systems P2P: relates to the electronic procure-
ment of products or services via the internet. Other systems such as electronic data
interchange (EDI) and enterprise resource planning (ERP) are also forms of...
11. International Labour Organisation: The only tripartite U.N. agency, since 1919
it brings together governments, employers and workers of 187 member States , to
set labour standards, develop policies and devise programmes promoting decent
work for all women and men.
12. Supplier evaluation & appraisal: is conducted at the tender stage and can be
in the form of either a questionnaire, interview or site visit to assess the supplier's
capability in terms of capacity, financial stability, quality standards, performance
and organisational structure and processes in place. Both existing and potential
suppliers are scored on suitability and either approved or rejected to be added
onto the approved supplier list (ASL). This helps to improve existing suppliers
performance and also can periodically ensure you have the right sized and fit of
suppliers on you approved list.
13. Supplier Selection: is an important organisational process: purchased products
represent between 40% and 60% of end product sales and have a direct impact on
the cost and quality of products. In addition, even a small cost gained by selecting
a good supplier can have great impact on benefits (Aiter et al., 2011).
It relies on multiple assessment techniques which include both quantitative and
qualitative methods (Choi and Hartley, 1996). At the same time, many organisations
continue to select suppliers based on experience and intuition - selective and
unreliable approaches (Kontio, 1996). The most common evaluation criteria used
to select suppliers are: financial health, expertise, operational performance metrics,
business processes and practices, enabling behaviours or cultural factors and risk
factors (Aiter et al., 2011).
, CIPS L4M1
Study online at https://quizlet.com/_72qbbf
14. eSourcing: automates contract lifecycle management (CIPS: Electronic Com-
merce and e-Business). Today, eSourcing and eProcurement form the core of the
e-Purchasing cycle (BuyIT, 2004). eProcurement is the process through which em-
ployees of the purchasing organisations access supplier online catalogues, select
items, conduct the purchasing process and communicate directly with suppliers
(Leenders et al., 2002). ESourcing, on the other hand, is a broader concept as it
incorporates the key elements of the buying process, such as knowledge, specifi-
cation, requests for quotation/tender/e-auction, evaluation/negotiation and contract
(CIPS: Electronic commerce and e-Business).
15. The Purchase to Pay (P2P) Process: underpins many sub-processes from
sourcing and negotiating terms, ordering, receipting and payment, through to con-
tract and relationship management (Lysons and Farrington)
16. supply chain governance: the system of directing the behaviors and decisions
of procurement within an organization via legislative, executive and judicial process-
es. Procurement also needs to establish effective governance of the supply chains
they put in place.
17. Centralized Procurement: implies that purchasing decisions are made either
by company headquarters or some regional or divisional level
18. Decentralized Procurement: an organisation's activities are spread over a
number of plants or locations.
19. Procurement Policy Development: developed in order to establish the rules of
how procurement should be conducted specific to the organisation.
20. Procurement Strategy Development: developed in order to establish the direc-
tion of how procurement should be organised in order to implement the procurement
policy.
21. Global Standard for Procurement and Supply: is a comprehensive competen-
cy framework. Used by individuals and organisations to enhance performance, the
Standard sets the benchmark for what good looks like in procurement and supply
at all levels and across all sectors. It helps individuals to identify current operating
skills and abilities and what is needed to progress.
22. GDPR: General Data Protection Regulation
23. Sectors of the economy: primary, secondary, tertiary
24. Primary sector: extraction of raw materials - mining, fishing and agriculture.
25. Secondary Sector: the part of the economy that transforms raw materials into
manufactured goods
26. Tertiary Sector: concerned with offering intangible goods and services to con-
sumers. This includes retail, tourism, banking, entertainment and I.T. services.
27. Procurement: total acquisition starting from the identification of a requirement
to the disposal
Study online at https://quizlet.com/_72qbbf
1. Stakeholders: In any activity an organization undertakes, whether strategic,
operational or tactical, the activity can only be successful with the input, commitment
and support of its key stakeholders. Gaining and maintaining the support and
commitment of stakeholders requires a continuous process of engaging the right
stakeholders at the right time and understanding and managing their expectations.
2. Global Supply Chains: a dynamic worldwide network when a company pur-
chases or uses goods or services from overseas. It involves people, information,
processes and resources involved in the production, handling and distribution of
materials and finished products or providing a service to the customer.
3. Whole Life Costing: takes into account the total cost of a product or service over
its lifetime, from concept through to disposal including purchase, hire or lease, main-
tenance, operation, utilities, training and disposal. It is important for procurement to
take all these elements into consideration when making decisions and comparing
the costs of buying, renting or leasing equipment particularly. In most cases the
purchase costs are only a small proportion of the cost of operating it.
4. Stakeholder mapping: A systematic way to identify the expectations, needs,
importance, and relative power of various stakeholders.
5. Value Generation: Creating value from the supply base can be achieved by not
only focusing on price but also increasing operational performance, driving efficien-
cies, working collaboratively or developing continuous improvement activities.
6. Procurement Cycle: the cyclical process of key steps when procuring goods or
services.
7. Steps of the Procurement Cycle: 1. Understand Need and develop High level
Spec.
2. Market/Commodity and options (inc make or buy assessment).
3. Develop Strategy/plan
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine with 1.
6. Supplier selection to participate in ITT/RFQ/negotiation.
7. Issue ITT/RFQ.
8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
8. Contract Management: delivers a great amount of data and intelligence that
support the smooth running of a business. Historically, the purpose of a contract
as a legal document was to protect the parties from negative consequences of its
, CIPS L4M1
Study online at https://quizlet.com/_72qbbf
breaches. Today, when companies are facing increasing pressures to reduce costs
and improve financial and operational performance, forming and managing new
trading relationships is critical for success. How well an organisation manages its re-
lationships with partners defines the two core elements of bottom line performance:
increasing revenues and decreasing costs. ... plays an important role by ensuring
the smooth running of operations, protecting the organisation from risks and shaping
the buyer-supplier relationships (Aberdeen Group, 2007; Saxena, 2008).
9. Application of Technology: E-Procurement systems can be utilised in the Re-
quest for Information (RFI), Request for Proposal (RFP) and Request for Quotation
(RFQ) process as well as for e-Tendering, e-Auctioning, vendor management, cat-
alogue management, purchase ordering, order status, shipment status, e-invoicing,
e-payment and contract management.
10. eSourcing / eProcurement systems P2P: relates to the electronic procure-
ment of products or services via the internet. Other systems such as electronic data
interchange (EDI) and enterprise resource planning (ERP) are also forms of...
11. International Labour Organisation: The only tripartite U.N. agency, since 1919
it brings together governments, employers and workers of 187 member States , to
set labour standards, develop policies and devise programmes promoting decent
work for all women and men.
12. Supplier evaluation & appraisal: is conducted at the tender stage and can be
in the form of either a questionnaire, interview or site visit to assess the supplier's
capability in terms of capacity, financial stability, quality standards, performance
and organisational structure and processes in place. Both existing and potential
suppliers are scored on suitability and either approved or rejected to be added
onto the approved supplier list (ASL). This helps to improve existing suppliers
performance and also can periodically ensure you have the right sized and fit of
suppliers on you approved list.
13. Supplier Selection: is an important organisational process: purchased products
represent between 40% and 60% of end product sales and have a direct impact on
the cost and quality of products. In addition, even a small cost gained by selecting
a good supplier can have great impact on benefits (Aiter et al., 2011).
It relies on multiple assessment techniques which include both quantitative and
qualitative methods (Choi and Hartley, 1996). At the same time, many organisations
continue to select suppliers based on experience and intuition - selective and
unreliable approaches (Kontio, 1996). The most common evaluation criteria used
to select suppliers are: financial health, expertise, operational performance metrics,
business processes and practices, enabling behaviours or cultural factors and risk
factors (Aiter et al., 2011).
, CIPS L4M1
Study online at https://quizlet.com/_72qbbf
14. eSourcing: automates contract lifecycle management (CIPS: Electronic Com-
merce and e-Business). Today, eSourcing and eProcurement form the core of the
e-Purchasing cycle (BuyIT, 2004). eProcurement is the process through which em-
ployees of the purchasing organisations access supplier online catalogues, select
items, conduct the purchasing process and communicate directly with suppliers
(Leenders et al., 2002). ESourcing, on the other hand, is a broader concept as it
incorporates the key elements of the buying process, such as knowledge, specifi-
cation, requests for quotation/tender/e-auction, evaluation/negotiation and contract
(CIPS: Electronic commerce and e-Business).
15. The Purchase to Pay (P2P) Process: underpins many sub-processes from
sourcing and negotiating terms, ordering, receipting and payment, through to con-
tract and relationship management (Lysons and Farrington)
16. supply chain governance: the system of directing the behaviors and decisions
of procurement within an organization via legislative, executive and judicial process-
es. Procurement also needs to establish effective governance of the supply chains
they put in place.
17. Centralized Procurement: implies that purchasing decisions are made either
by company headquarters or some regional or divisional level
18. Decentralized Procurement: an organisation's activities are spread over a
number of plants or locations.
19. Procurement Policy Development: developed in order to establish the rules of
how procurement should be conducted specific to the organisation.
20. Procurement Strategy Development: developed in order to establish the direc-
tion of how procurement should be organised in order to implement the procurement
policy.
21. Global Standard for Procurement and Supply: is a comprehensive competen-
cy framework. Used by individuals and organisations to enhance performance, the
Standard sets the benchmark for what good looks like in procurement and supply
at all levels and across all sectors. It helps individuals to identify current operating
skills and abilities and what is needed to progress.
22. GDPR: General Data Protection Regulation
23. Sectors of the economy: primary, secondary, tertiary
24. Primary sector: extraction of raw materials - mining, fishing and agriculture.
25. Secondary Sector: the part of the economy that transforms raw materials into
manufactured goods
26. Tertiary Sector: concerned with offering intangible goods and services to con-
sumers. This includes retail, tourism, banking, entertainment and I.T. services.
27. Procurement: total acquisition starting from the identification of a requirement
to the disposal
