CIPS L4M6 Dumps

For partnership sourcing to succeed, senior management buy-in is essential. Selling the idea internally ensures commitment of resources, trust, and long-term strategy alignment. Options A and D undermine partnerships, while B contradicts the open and collaborative nature of partnership sourcing.

Explanation

The correct answer is ‘reduced product life-cycles’. In this example the reason for entering a partnership is to be able to produce new models of phones more quickly- this is likely because consumers are wanting to change mobile phones more often than they did in the past, so in order to keep up withdemand, Phone Maker Incorporated need to produce more phones, more quickly. Drivers of Partnership Sourcing is a key topic in the exam – you can revise these by looking at p.127 in the Study Guide

Explanation

Pareto is the 80:20 rule- this can be adapted to talk about supplier relationships, where instead of having 2 categories there are now 3 (A B and C). CIPS use the terms Pareto and ABC interchangeably. See p.16 for further information

Explanation

CPV codes help suppliers find opportunities they can bid for. CPV codes are a numerical classification for products e.g. Strawberry Jam is 15332296 and when they are included on a Tender, any supplier who is registered with that same CPV code will get a notification that the tender is live. CPV codes arediscussed on p.72 but not in much detail- so don’t worry if you don’t know much about them. So long as you know the above, you’ll be fine.

Explanation

The correct answer is ‘Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise’. Be careful not to confuse mediation with arbitration – arbitration is when the buyer and supplier agree to accept a third party’s decision which will solve the disagreement issues. See p.112 for more information on solving disputes

Explanation

Using an external supplier always comes with increased risk, as you become dependant upon them, and have less control over their performance (compared to an in-house team). In this example Harry will have the increased risk that the contract cleaners turn up late to their shifts, or don't do a good job. However, there is no reason to believe that the supplier will not perform as well as an internal team- we don't have enough information from the QUESTION NO: for this to be true. What is true is the RISK isgreater. The other answers are incorrect; the QUESTION NO: doesn't indicate whether outsourcing the cleaning will be more or less expensive for Harry. Allowing staff to focus on other areas is an advantage not a disadvantage. See p.4 for more information on 'External Suppliers'

Comprehensive and Detailed Explanation:

Extending the notice period in a mutual termination for convenience clause provides the buyer with additional time to:

Identify and engage alternative suppliers

Ensure continuity of supply

Mitigate risks associated with abrupt contract termination

This proactive approach aligns with best practices in contract management, allowing for smoother transitions and minimizing potential disruptions.

In stakeholder management,Negative leadersandPromoterspossess high influence over others:

Negative leaders: Individuals who oppose the project and can sway others against it due to their influence.

Promoters: Advocates who support the project and can positively influence others.

Understanding these dynamics is crucial for effectively managing stakeholder resistance.

As highlighted in the CIPS study materials:

"Overcoming resistance- Promoters - They have a high influence on other stakeholders and support the project. They support and empower."

Explanation

The reason for outsourcing in this example is that the IT firm is an expert in their field. The requirement is complex and important and this is the reason why it is not being delivered in-house. The other answers given CAN be reasons for out-sourcing, but don't relate to this example. For a full list of reasons a company could use outsourcing see p. 4-5

Explanation

The correct answer is ‘The CEO is a key player- so it is important he is involved early in the process’. The CEO has high power and high interest which puts him in the top right-hand corner of Mendelow’s Stakeholder Matrix (p.81). CIPS says Key Players should be involved early in the procurement process (p.82).

Explanation

Barriers to entry are economies of scale (in the air travel industry you can't just start off small and grow), access to capital (you need to already have a lot of money to buy airplanes) and licences and permits (you need to ensure you have the correct licences to fly planes). These are listed on p.41. Other barriers include; strong brand identity already dominant in the market, high switching costs for buyers, access to distribution networks and government policy.

Explanation

Internal stakeholders are those who work within the business so include the legal department, employees and end-users. End-users mean those people and departments who will be using the product or service. For example if Gabriel is procuring new software- an end-user would be anyone who would be using that software (whether they're employees, volunteers or agencies). CIPS outlines types of stakeholders on p.64

The Restricted and Two-stage procedures involve a PQQ stage to shortlist suppliers before issuing an ITT. This approach is common for contracts requiring stringent supplier qualifications.

Routine items are low risk and low value. They are non-critical and often easily sourced. CIPS categorizes such items in the ‘Routine’ quadrant of the Kraljic Matrix, where minimal procurement effort is justified and supply assurance is easily managed.

Understanding customer price expectations and the potential for substitute technology are critical in product development to anticipate market trends and competitive threats, aligning with risk management principles.

Setting minimum standards helps filter suppliers efficiently, ensuring that only capable and reliable suppliers are considered. This approach supports both cost and quality objectives.

Explanation

The correct answer is ‘Strong levels of trust and honest communication’. The questions on Partnership in the exam tend to be quite straightforward, but if you’re struggling with this see p. 148 for further details of behaviour in Partnerships.

Comprehensive and Detailed Explanation:

Differentiation involves offering unique products or services that are valued by customers, allowing the company to charge premium prices. This strategy focuses on uniqueness and added value rather than competing solely on cost.

Explanation

This is one of those questions you have to read carefully- it asks for 'elements of a business'. Cost focus and cost leadership are ways a company can improve their competitive advantage, but they're not elements of a business. The other three options are. Porter created a list of elements of a business that can help a company's competitive advantage- these can be found on p.33-34

Arranging a meeting to clarify roles and setting performance targets provides clear expectations and encourages accountability. This aligns with CIPS guidelines on managing conflicts through constructive engagement.

Comprehensive and Detailed Explanation:

Partnerships between buyers and suppliers are often driven by:

High Spend:Significant expenditure justifies the investment in developing a closer relationship to achieve cost savings and efficiencies.

Critical Products:Items that are essential to the buyer's operations necessitate a reliable and collaborative supplier relationship.

Technical Complexity:Complex products benefit from joint development efforts, shared expertise, and coordinated problem-solving.

Conversely, commodities and markets with many suppliers typically lend themselves to transactional relationships rather than partnerships.

Early engagement with the whole market is crucial when entering a new technical domain. It allows the company to assess the capabilities, innovations, and fit of various suppliers before locking down specifications. CIPS guidance emphasizes the value of market engagement in developing effective specifications and selecting the right partner.

Comprehensive and Detailed Explanation:

Partnership sourcing is most appropriate for products that are critical to the buyer's business, involve high spend, and are technically complex or require innovation. The chocolate brownie cake is the company's most popular product, indicating high sales volume and strategic importance. Establishing a partnership with suppliers for this product can lead to benefits such as improved quality, innovation, and supply chain efficiency.

Explanation

Adversarial and Arm's Length relationships have low levels of trust. Single Source, Partnership and Outsourcing require high level of trust. See p.5 for the Supplier Relationship Spectrum

Comprehensive and Detailed Explanation:

In the Kraljic Matrix, a 'Bottleneck' item is characterized by low financial impact but high supply risk. These items may be sourced from a limited number of suppliers or involve complex logistics, making them susceptible to supply disruptions. Managing bottleneck items requires strategies focused on risk mitigation, such as developing alternative suppliers or holding strategic stock reserves.

Explanation

This is based on a real exam question- it's looking to see if you can remember Carter's 10 Cs. These are; cash, cost, consistency, culture, clean, communication, competency, capacity, commitment and control. (p.12 in the text book)

Explanation

Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn’t necessarily mean physical waste (as in stuff you don’t want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier’s, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn’t necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there’s a short list of ways in which good supplier relationships can bring value for money to a business.

Explanation

The correct answer is Forming, storming, norming, performing (p.91). Note; some people add on two additional stages to this; mourning and adjourning. The study guide forgets to mention this, but theexam may ask you about these additional stages. So I strongly recommend doing some further reading on this (it’s called the Tuckman Group Development Model)

Explanation

This is category 'A' spend in the ABC model - they represent a large value and a small number of purchases / suppliers. See p.17 for more information on the ABC Analysis

Explanation

The correct answer is ‘Yes- joint innovation projects are often a strong motivation for entering into a partnership’. The other options are simply not true statements. A lot of the questions on the ‘Partnerships’ chapters of the book are common-sense questions like this. It involves reading the QUESTION NO: and using logic, rather that relying on your knowledge of procurement. If you found this QUESTION NO: easy – that’s a good sign for the exam.

Explanation

Legislative changes wouldn't affect rivalry in a market as all suppliers would be equally as affected, the same with supply chain disruptions. Factors which do affect rivalry include; industry growth and decline, product differences, brand identity, switching costs, diversity of competitors and exit barriers. These are listed on p.41

Explanation

Jenny should consider whole life costing. Ensuring value for money means considering a combination of price and quality throughout the lifetime of the product. See p.65 for more on ‘Achieving Value for Money’

Explanation

The correct answers are; The marketplace has become more volatile, Working together will create synergies and The need to improve performance to satisfy the end customer. Further Drivers ofPartnership Sourcing can be found on p.127. The other answers are incorrect as entering a partnership won’t protect intellectual property rights- in fact that’s one of the big risks of entering into a partnership. Partnerships won’t increase costs and lead-times, they’re likely to decrease them.

Cost leadership (Porter’s generic strategy) is often referred to as a “no-frills” approach, where the organisation focuses on reducing costs and offering competitive prices across a broad scope. The aim is to become the lowest-cost producer while maintaining acceptable quality.

Explanation

The definition of value mapping is given on p.69 this is; ‘a process in which value is created through the elimination of waste and operational inefficiencies’. It ties into JIT / Lean.

Explanation

This is a threat of a new entrant. The competitor has now entered the washing machine market and is competing directly with you. This is not a threat of substitution as it is the same product. A substitution would be if they invented a new product that washed clothes and people started buying this instead of washing machines. There are many questions in the exam on Porter's 5 Forces - see p. 39

Value for money is achieved through a balance of quality and cost, ensuring that the goods meet performance requirements while being cost-effective, as per procurement best practices.

Explanation

The correct answer is 'arms length'. This is a tactical purchase (as it is low value) and keeping the supplier at arms-length means that Red Manufacturing could possibly exploit them to reduce their prices (think back to the Kraljic matrix and where Blue Business would likely fall). A Partnership or Single- Source relationship requires investment into the relationship, and as the products are low value and Red Manufacturing have a lot of other suppliers, they should not be investing time in developing that relationship with Blue Business. An adversarial relationship wouldn't be advantageous as it may lower the performance of the supplier. See the relationship spectrum on p.5 - this is a hot topic for the exam

Explanation

The correct answer is ‘keep satisfied’ because the stakeholder is high power and low interest. This is the top left corner of Mendelow’s Stakeholder Matrix – see p.81

Technological factors play a pivotal role in IT equipment supply chains. Advancements, obsolescence, and innovation significantly affect production, cost, and competitiveness, making it a primary focus in supply chain development.

Comprehensive and Detailed Explanation:

Obtaining multiple quotations for contracts over a certain value ensures that the organization assesses various options, promoting competition and transparency. This practice helps in achieving value for money by comparing different suppliers' offerings.

Explanation

The correct answer is ‘It can lead to a lack of trust’ – this is a quote from p.162. The other answers are all incorrect; in a partnership KPIs are joint between the parties– so there wouldn’t be a situation where one party doesn’t fulfil their KPIs. Commitment doesn’t necessarily have a direct correlation with profit so that answer is incorrect. ‘Sufficient time and resources are put in’ is a positive thing, so can’t be a reason who a partnership fails.

The relationship reflects a partnership due to the strategic alignment, resource sharing, and focus on long-term growth, even without a formal contract. CIPS highlights that partnerships are based on trust and collaboration.

Intense rivalry occurs when suppliers are equally balanced and face high barriers to exit, leading to aggressive competition to retain market share, as described in Porter’s Five Forces model.

Explanation

Using technical jargon can lead to misunderstandings if not all parties understand the jargon. See p. 158 on communication issues

Comprehensive and Detailed Explanation:

Partnering is most suitable in scenarios involving high-risk contracts, where the complexity, uncertainty, or strategic importance of the procurement necessitates close collaboration between the buyer and supplier. In such cases, a partnership allows for shared risk management, joint problem-solving, and mutual investment in achieving long-term objectives. This approach is less appropriate for low-cost, low-risk, or commoditized items where transactional relationships suffice.

Explanation

Richie should do a Force Field Analysis – this is explained on p.86 and is an idea of Kurt Lewin – it identifies the driving forces for a project and the restraining forces (basically who will be for it and who will be against it). The textbook doesn’t go into much detail on this but there are questions on it in the exam- so have a quick google to familiarise yourself with Kurt Lewin’s Force Field Analysis.

Comprehensive and Detailed Explanation:

A performance specification outlines the desired outcomes or results without prescribing the exact methods to achieve them. This approach allows suppliers the flexibility to use their expertise and creativity to meet the buyer's requirements, thereby encouraging innovation.

Across-organisational teambrings together specialists from various departments—such as R&D, marketing, finance, and production—to collaborate on complex projects. This team structure enables diverse perspectives, innovative solutions, and efficient decision-making, which are crucial when developing and launching new products. The CIPS L4M6 guide emphasizes the importance of integrated teamwork in achieving strategic outcomes in procurement and supply chain projects.

Explanation

This is a leverage supplier on the Kraljic Matrix; high cost impact and low risk impact. The diagram on p.20 gives the example of utility services such as electricity as a common leverage supplier. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix

The relationship qualifies as a partnership due to their collaboration, shared investments, and mutual efforts toward improvement, regardless of the absence of formal contracts. Partnerships focus on shared goals, trust, and strategic alignment rather than mere documentation.

Early Supplier Involvement (ESI) offers several advantages to buyers:

Shared expertise for problem solving: Engaging suppliers early allows for collaborative problem-solving, leveraging the supplier's specialized knowledge to enhance product development.

Improved understanding of seller capabilities: Early engagement provides insights into the supplier's capabilities, facilitating better alignment with project requirements.

Lower development costs: Collaborative efforts in the early stages can lead to cost savings by identifying efficiencies and reducing the need for later-stage modifications.

These benefits are highlighted in the CIPS Intelligence Hub:

"ESI can bring significant benefits to your organisation, due to the involvement of suppliers in the initial stages of product development... Here are some additional benefits that your organisation will see when adopting ESI... Helps to reduce cost... Integrates supplier capabilities in the manufacturers supply chain..."

— CIPS Intelligence Hub: Early Supplier Involvement

Explanation

The portable CD player has been replaced with a substitute product. This threat wasn't considered by the company and this resulted in poor sales. There are many questions in the exam on Porter's 5 Forces - see p. 39

Economic factors such as unemployment rates affect labor availability, wages, and consumer purchasing power, directly impacting business operations and supply chains.

Explanation

The correct answer is “A mechanism for performance management where the buyer has the right to deduct money from payments owed for under performance”. A definition is provided on p.113 and states “If a supplier fails to meet the standard set in the service credits, the buyer has the right to deduct set amounts of money from payments owed to the supplier”

Explanation

Fred should hold a competition as this is a ‘key way of achieving value for money’ p.67. Fred shouldn’t put a business case together to make the product in-house without doing a make vs buy analysis, and that analysis showing make is the way to go. As the firm buy in 100s of components, it’s very unlikely that making the component in-house would bring ‘value for money’. He should also be careful of only looking at current suppliers or known suppliers- the best supplier of this new component might be unknown to the engineering firm at present.

Drivers for partnership include a high spend with the supplier, criticality of the product, and technical complexity. These factors encourage collaboration for cost efficiency, quality improvement, and risk management. Partnerships are less likely when there are many suppliers or the product is a commodity, as competition and standardization reduce the need for close collaboration.

The stages of team development as defined by Tuckman include forming, storming, norming, and performing. These stages reflect how teams evolve and mature through collaboration and problem-solving.

Effective partnership governance requires balanced representation from both buyer and supplier. If the supplier has fewer members than the buyer, decision-making power becomes unequal, potentially undermining collaboration.

Explanation

The correct answer is ‘Reduced waste in the supply chain’ – this is not a risk, this is a benefit P.134

Internal stakeholders are individuals or groups within an organization who are directly involved in its operations and decision-making processes. The finance director plays a crucial role in budgeting and financial planning, while maintenance engineers are essential for ensuring equipment functionality and efficiency. Both are integral to the organization's internal operations, as outlined in the CIPS L4M6 study materials.

Shortening product life cycles require close collaboration and innovation between buyer and supplier to stay competitive. Partnership sourcing provides shared development, reduced lead times, and improved responsiveness. Stable markets or falling costs do not justify partnerships; they are best suited for high-risk, fast-changing environments.

For low-cost, high-volume business models, maintaining profitability depends on tightly controlled procurement costs. Price management is critical for ensuring competitive pricing while safeguarding slim margins. CIPS L4M6 highlights that effective cost management and price negotiation are essential in such scenarios.

Comprehensive and Detailed Explanation:

Succession issues pertain to the challenges associated with ensuring the uninterrupted supply of goods or services when transitioning from one supplier to another. Continuity of supplies is a primary concern, as any disruption can impact operations, customer satisfaction, and revenue. Effective succession planning involves:

Identifying Alternative Suppliers:Ensuring that backup suppliers are in place and capable of meeting requirements.

Knowledge Transfer:Facilitating the transfer of critical information and processes to new suppliers.

Inventory Management:Maintaining adequate stock levels during the transition period.

Other options listed, such as processing penalties, deletion of old specifications, and payment of old invoices, are administrative tasks that, while important, do not directly relate to succession planning.

Explanation

The correct answer is ‘Yes- the Public Sector is regulated by EU procurement regulations which prohibits this’. This is stated on p.122. Please note that this study guide and exam were written before Brexit. Once Brexit happens, nobody knows what will happen with this.

Comprehensive and Detailed Explanation:

Forward buyinginvolves purchasing goods in advance of actual need, often in larger quantities, to take advantage of favorable pricing or to hedge against anticipated price increases. This strategy is commonly used in volatile markets to stabilize costs and ensure supply continuity.

Explanation

The logistics risk can be reduced by ‘Sharing up-to-date information’. If the Pub tells the supplier when it’s running low, they can then time the deliveries more accurately. P. 136. A lot of the questions on the ‘Partnerships’ chapters of the book are common-sense questions like this. It involves reading thequestion and using logic, rather than relying on your knowledge of procurement. If you found this question easy – that’s a good sign for the exam.

Early supplier involvement ensures the supplier understands process timelines and allows the buyer to leverage supplier capabilities. This improves product development efficiency and enhances outcomes.

In the Norming stage of Tuckman’s model of team development, teams begin to resolve their differences, appreciate each other's strengths, and respect authority. Agreement on design and role assignment indicates the team has moved past conflict (Storming) and is now functioning collaboratively, although not yet fully productive (Performing).

Routine suppliers typically supply low-value, low-risk items. Maintaining partnerships in such cases is inefficient since alternative suppliers are readily available. Adopting a transactional or adversarial relationship would be more appropriate.

Comprehensive and Detailed Explanation:

Effective conflict resolution involves:

Individual Meetings:Understanding the root cause of the conflict by discussing with each individual separately to determine if issues are personal or work-related.

Joint Meetings with Mutual Targets:Bringing the individuals together to set mutual goals can foster collaboration and reduce friction.

Avoiding the issue (Option D) or moving a team member (Option C) are not proactive solutions and may not address the underlying problem.

Explanation

The correct answer is ‘Intellectual Property Rights’. Grey Stone will need to share its idea for the vaccine with the pharmaceutical company and this is risky if there is no trust between the parties. See p.134 for more information on Risks of Partnerships.