CIPS L4M6 LO3 Questions and Comprehensive
Answers Graded A+ 2024-2025
what is type 1 of partnership? - ✔️✔️the organisations recognise each other as partners
and co-ordinate activities and planning on a limited basis. the partnership has a short-
term focus and involves only one function within each organisation. partnerships of this
type are less time intensive to develop
what is type 2 of partnership? - ✔️✔️both companies progress beyond co-ordination of
activities to integration. the partnership has a long-term focus and a number of functions
within both companies are involved
what is type 3 of partnership? - ✔️✔️the companies share a significant level of
operational integration. the buyer and supplier view each other as an extension of each
others firm. no end date is set for their partnership
what are the characteristics that differentiate between having a partnership relationship
with a supplier and having a traditional contracting relationship? - ✔️✔️- early supplier
involvement
- no tender process or win-lose negotiations
- shared costs and benefits
- greater levels of information sharing and transparency
- joint performance measurement and KPIs
- no defined end period
- less contractual
what are some possible drivers for partnership sourcing? - ✔️✔️- working together will
generate synergies which are likely to result in reduced costs and increased profitability
- product life cycles have reduced in recent decades, which has created the need for
businesses to develop products more quickly
- changes in the marketplace or unstable markets may result in buyers and suppliers
needing to work together more closely in order to survive
- there may be a need to improve performance to satisfy the ultimate customer in the
supply chain
- the desire to reduce stock-holding and to move towards world-class standards of
supply chain management
what is a product life cycle? - ✔️✔️a period of time which involves developing a product
from scratch, bringing the product to the marketplace, sales in the market and the
eventual decline and removal of the product from the marketplace
, what is vertical integration? - ✔️✔️when a buyer owns companies within its supply chain.
there could be forward vertical integration where a buyer owns a distributor, or
backward vertical integration where a buyer owns one of its suppliers of raw materials
what are the joint advantages of partnership? - ✔️✔️- working together and collaborating
is likely to result in synergies which could bring reduced costs and increased profitability
for both partners
- investment costs, such as new machinery and research and development can be
shared by both partners
- partnership can lead to improved competitive advantage and/or increased market
share. these are both likely to generate increased profits
what are the partnership advantages for the buyer? - ✔️✔️- as partnership relationships
are generally long term, the buyer is likely to be able to gain price stability from the
supplier. this will aid in planning and financial management
- cost savings may be made as a result of supply base rationalisation and leveraging
volume with the supplier
- there may be greater continuity of supply. if there is a shortage of supplies in the
marketplace a supplier is likely to service its preferred customer first
what are the partnership advantages for the supplier? - ✔️✔️- the supplier will gain
certainty of business, for example in terms of both volume and length of business, which
will result in greater stability for the supplier
- it may gain an increased volume of business if the buyer was previously dual-sourcing
or multiple-sourcing its requirements and has now placed all of its volume with one
supplier
- it may have increased involvements in initiatives, such as supplier development or
early supplier involvement in new projects, which could result in additional business for
the supplier
what are the joint disadvantages of a partnership? - ✔️✔️- if a partnership relationships
breaks down or one partner fails, there could be serious repercussions for the remaining
company due to the level of dependence that the partners have on each other
- partners can become locked into a relationship in which they are incompatible
- there is a risk that confidential information or IPR from the buyer or supplier will be
leaked to the marketplace by the other partner which could seriously affect a companys
competitive advantage
what are the partnership disadvantages for the buyer? - ✔️✔️- supplier could become
complacent overtime as it no longer has to compete for the buyers business
- the buyer is locked into a relationship, and as a result is unable to take advantage of
offerings from other suppliers in the marketplace that might have become more
competitive, or have access to newer technologies
Answers Graded A+ 2024-2025
what is type 1 of partnership? - ✔️✔️the organisations recognise each other as partners
and co-ordinate activities and planning on a limited basis. the partnership has a short-
term focus and involves only one function within each organisation. partnerships of this
type are less time intensive to develop
what is type 2 of partnership? - ✔️✔️both companies progress beyond co-ordination of
activities to integration. the partnership has a long-term focus and a number of functions
within both companies are involved
what is type 3 of partnership? - ✔️✔️the companies share a significant level of
operational integration. the buyer and supplier view each other as an extension of each
others firm. no end date is set for their partnership
what are the characteristics that differentiate between having a partnership relationship
with a supplier and having a traditional contracting relationship? - ✔️✔️- early supplier
involvement
- no tender process or win-lose negotiations
- shared costs and benefits
- greater levels of information sharing and transparency
- joint performance measurement and KPIs
- no defined end period
- less contractual
what are some possible drivers for partnership sourcing? - ✔️✔️- working together will
generate synergies which are likely to result in reduced costs and increased profitability
- product life cycles have reduced in recent decades, which has created the need for
businesses to develop products more quickly
- changes in the marketplace or unstable markets may result in buyers and suppliers
needing to work together more closely in order to survive
- there may be a need to improve performance to satisfy the ultimate customer in the
supply chain
- the desire to reduce stock-holding and to move towards world-class standards of
supply chain management
what is a product life cycle? - ✔️✔️a period of time which involves developing a product
from scratch, bringing the product to the marketplace, sales in the market and the
eventual decline and removal of the product from the marketplace
, what is vertical integration? - ✔️✔️when a buyer owns companies within its supply chain.
there could be forward vertical integration where a buyer owns a distributor, or
backward vertical integration where a buyer owns one of its suppliers of raw materials
what are the joint advantages of partnership? - ✔️✔️- working together and collaborating
is likely to result in synergies which could bring reduced costs and increased profitability
for both partners
- investment costs, such as new machinery and research and development can be
shared by both partners
- partnership can lead to improved competitive advantage and/or increased market
share. these are both likely to generate increased profits
what are the partnership advantages for the buyer? - ✔️✔️- as partnership relationships
are generally long term, the buyer is likely to be able to gain price stability from the
supplier. this will aid in planning and financial management
- cost savings may be made as a result of supply base rationalisation and leveraging
volume with the supplier
- there may be greater continuity of supply. if there is a shortage of supplies in the
marketplace a supplier is likely to service its preferred customer first
what are the partnership advantages for the supplier? - ✔️✔️- the supplier will gain
certainty of business, for example in terms of both volume and length of business, which
will result in greater stability for the supplier
- it may gain an increased volume of business if the buyer was previously dual-sourcing
or multiple-sourcing its requirements and has now placed all of its volume with one
supplier
- it may have increased involvements in initiatives, such as supplier development or
early supplier involvement in new projects, which could result in additional business for
the supplier
what are the joint disadvantages of a partnership? - ✔️✔️- if a partnership relationships
breaks down or one partner fails, there could be serious repercussions for the remaining
company due to the level of dependence that the partners have on each other
- partners can become locked into a relationship in which they are incompatible
- there is a risk that confidential information or IPR from the buyer or supplier will be
leaked to the marketplace by the other partner which could seriously affect a companys
competitive advantage
what are the partnership disadvantages for the buyer? - ✔️✔️- supplier could become
complacent overtime as it no longer has to compete for the buyers business
- the buyer is locked into a relationship, and as a result is unable to take advantage of
offerings from other suppliers in the marketplace that might have become more
competitive, or have access to newer technologies
