Level 5 Unit Content Guide Web

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Unit content guide

Revisedcontent

September2009

Advanced diploma in

purchasing and supplyThe units that make up the award are:

Management in the purchasing function

Risk management and supply chain vulnerability

Improving supply chain performance

Plus a choice of two optional units:

Marketing for purchasers

Storage and distribution

Operations management in the supply chain

The machinery of government

Contracting in the public sector

Sustainable procurement


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The content (including references, names and acronyms) are correct at the time of publication, June 2009. Copyright CIPS


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The Chartered Institute of Purchasing& Supply qualifications ladder hassix levels of awards. For details of

the entry requirements for eachlevel, please refer to www.cips.org

The CIPS Advanced diploma in

purchasing and supply is a Level 5higher level qualification. It has been

accredited by the Office ofQualifications and Examinations

Regulator (Ofqual) and appears on theNational Database of Accredited

Qualifications (NDAQ). Please refer towww.accreditedqualifications.org.uk

The Level 5 Advanced diploma inpurchasing and supply consists ofthree compulsory units. Additionally

you must choose two optional unitsfrom a choice of six includingSustainable procurement optional unit,launched in September 2009 with

first assessment in November 2009.

Assessment for each unit is byexamination with the exception of theImproving supply chain performancewhen there is a choice for students inthe UK. If your study centre has beenapproved you can choose either aclosed book examination or a work-based assessment.

If you wish to study for this award it is

expected that you will undertake 50guided learning hours per unit, ie a

total of 250 guided hours. The definitionof guided learning hours is:

A measure of the amount of input

time required to achieve the

qualification. This includes lectures,

tutorials and practicals, as well assupervised study in, for example,

learning centres and workshops.

You will find that study centres varyon the exact format for delivery of thestudy programme. Additionally CIPSwould recommend that you alsocommit 80 hours per unit of self-study, including wider reading of thesubject areas and revision to giveyourself the best chance ofsuccessful completion of the award.

Below is a list of the units, their NDAQreference numbers and CIPS reference

code which is used to identify the unitfor examination purposes.

Advanced diploma in purchasing and supplyIntroduction

1

LEVEL 5 ADVANCED DIPLOMA IN PURCHASING AND SUPPLY NDAQ QUALIFICATION NUMBER 100/6113/7

Management in the purchasing functionRisk management and supply chain vulnerabilityImproving supply chain performance

Plus choose two optionsMarketing for purchasersStorage and distributionOperations management in the supply chain

The machinery of governmentContracting in the public sectorSustainable procurement

K/500/1713M/500/1714T/500/1715

F/500/1717J/500/1718L/500/1719

D/500/5371H/500/5372

CIPS ref code L5-01CIPS ref code L5-02CIPS ref code L5-03




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AssessmentAssessment is the way in whichCIPS will measure whether or not a

student is able to demonstrate theirknowledge, understanding andability to apply their learning in anygiven situation.An assessment could be anexamination, assignment orproject.

Business essentialsThese are commonly occurringthemes through the CIPSqualifications, that do not warranta unit in their own right, but thatare important holistically to thelearning undertaken within CIPSqualifications.

They are areas of importance,innovation and some emergingthemes, such as: Quality management

International issues Business finance Information management External factors.

Command wordsCommand words are generallyverbs that are used to indicate the

level of learning undertaken. Theytend to be hierarchical in nature.For example, at Level 3, acommand word will bedemonstrate or explain, whereasa command word at Level 6 will besynthesise, or critically evaluate.These words reflect the level ofcomplexity of your learning andultimately your assessment at thatlevel.

Compulsory unitsThese are units that you must takeeither through CIPS or analternative awarding body thatconstitute necessary knowledgeand understanding to fulfil learningrequirements for CIPSqualifications.

If you have undertaken equivalentlearning or have equivalent relatedexperience to the compulsory unitsfrom somewhere else you mayeither be exempt from learning, orgain accreditation for prior learningor experience.

Entry levelThis is the point at which you willenter the CIPS qualifications ladder.

This entry will be based upon pre-requisite knowledge,understanding and experience.

ExemptionsStudents who have successfullycompleted certain post-schoolstudies may apply for exemptionsfrom equivalent courses in theirprogramme of study. To earn anexemption from either levels ofqualifications or option units withinqualifications you should contactCIPS or see www.cips.org

Please note that gaining anexemption, does not mean that yougain an exit award at that level,rather that you bypass that level oflearning because of equivalentlearning and achievement gained

elsewhere.

Advanced diploma in purchasing and supplyGlossary of terms

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Exit awardAn exit award is in essence aqualification. CIPS has six exit

awards in total Introductory certificate in

purchasing and supply Certificate in purchasing and

supply Foundation diploma in

purchasing and supply Advanced diploma in purchasing

and supply Graduate diploma in purchasing

and supply Executive diploma in purchasing

and supply.

For each qualification you study,you will receive a certificate ofachievement confirming your exitaward.

Indicative contentThe knowledge required in order to

fulfil the learning objectives andachieve the learning outcomes inother words what you need toknow.

Integrative unitsIntegrative units are intended tohelp students see connections

between all aspects of theirlearning within a particular level ofqualification. For the purpose ofCIPS qualifications, awards atlevels 3 and 6 will have anintegrative unit.

Learning objectivesDetermines the level of learningyou must undertake in order toachieve the learning outcomes.

LevelThe level determines thecomplexity of learning, the depth of

learning and the comparison oflearning with other qualifications.CIPS has qualifications at levels 2to 7. The levels are as follows:

Level 2Introductory Level this is forsomebody new to thepurchasing and supplyprofession and often in a juniorcapacity

Level 3Junior technical alsopotentially new to learning

Level 4Operational/juniormanager/new to the profession

Level 5Manager/specialist role

Level 6Senior managers/specialist

professional Level 7

Postgraduate strategic leader

The levels are determined byOfqual, who are the Governmentregulator for education, and enablea clear understanding nationally ofthe level of a persons learning andability in that field.

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National QualificationsFrameworkThis framework is a government

framework, where qualificationsthat are approved by Government,as being fit for purpose, andmeeting the quality criteria, arelisted. Qualifications listed withinthis framework are monitoredagainst a variety of measures toensure quality of qualification,associated procedures and delivery.

OfqualOfqual is the Government regulatorfor professional bodies such asCIPS, and act as the caretaker ofqualifications included in theNational Qualifications Framework

Optional unitsThese are units where you havechoice and opportunity tospecialise in an area of interest.

There is an opportunity to selecttwo optional units at advanceddiploma and two optional units atgraduate diploma.

.

Qualifications ladderThis ladder represents thehierarchical nature of CIPS

qualifications. The ladder has sixsteps within it. It starts with anIntroductory Certificate through tothe Graduate Diploma.

Each step of the ladder isrepresented by qualification withan exit award.

Statements of practiceA goal for attainment, whichindicates what you need to knowand be able to do to complete yourstudies in a particular subject area.

Each unit has six to seven learningoutcomes which outline what youwill achieve as a result of yourlearning in that particular unit.

Student

Member who is studying a CIPSqualification.

UnitA segment of learning within theCIPS qualifications, which has a

value in terms of hours of learning.Each unit is individual, has its owntitle, rationale and content. A unitwill also have an assessmentattached to it in order todemonstrate achievement andconclusion of the learning.

WeightingsWeightings are allocated to eachunit, to determine how the learningcan be sensibly split.

Each unit has a content weightingof 100%. Within each unit, eachsubject area is given a weightingeg 20% or 25%.

This weighting indicates the levelof input and learning required bythe deliverer and the learner in

order to complete the subject area.However, the weightings do notnecessarily reflect the marks thatmay be allocated to a question inthat subject area of the unit.

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AIDA Attention, interest,desire, actionAIDA is an acronym used in

marketing that describes a commonsequence of actions which need tohappen when a person is trying tosell a product or service.

ABC Analysis Stockcategorisation methodApplication of Paretos Law of the80/20 rule: ABC classifications aredetermined in ascending rank orderof all products according to theproduct classification as apercentage of the total purchasingspend. Ranking can also be byvolume, value, weight etc.

BBS Business balancedscorecardKaplan and Norton (1996)developed balanced scorecardapproach to measure performance

in organisations adopting a holisticand balanced view looking atperformance against fourperspectives financial, customer,internal business and earningand growth.

BCP Business continuityplanningA methodology used to create a

plan for how an organisation willresume partially or completelyinterrupted critical functions withina predetermined time after adisaster or disruption.

BPR Business process re-engineeringThe fundamental re-thinking andradical re-design of businessprocesses. To achieve dramaticimprovements in critical,contemporary measures ofperformance such as cost, quality,service and speed.

CAD Computer aided designThe use of a wide range ofcomputer based tools that assistengineers, architects and otherdesign professionals in their

design activities.

CAM Computer aidedmanufacturingThis is a software process that candirectly convert an object (productdrawing) into code so that amachine, such as a lathe or millingmachine can manufacturethe product.

COSHH Control of substanceshazardous to healthLegislation that requires employers

to control exposure to hazardoussubstances to prevent ill health.

CSR Corporate socialresponsibilityCSR means the commitment to asystematic consideration of theenvironmental, social and culturalaspects of an organisationsoperations. This includes the keyissues of sustainability, humanrights, labour and communityrelations, as well as supplier andcustomer relations beyond legalobligations; the objective being tocreate long-term business valueand contribute to improving thesocial conditions of people affectedby an organisations operations.

DAGMAR Defining

advertising goals for measuredadvertising resultsA model of marketingcommunications developed for themeasurement of advertisingeffectiveness.

Advanced diploma in purchasing and supplyAcronym guide

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ECR Efficient consumerresponseThe link to make category

management an operational reality.Supplier and buyers workingtogether to ensure total consumersatisfaction.

EDI Electronic datainterchangeThe exchange ofdocuments/information betweencomputers using telephone lines.

EFT Electronic funds transferFinancial or value transactionscarried out between parties bymeans of computer systems. It canalso refer to financial informationabout transactions being passed.

EPOS Electronic point of saleA system that allows the flow ofinventory/products from warehouse

to point of sale in the shortest time.

ERP - Enterprise resourceplanningRefers to any software thatenables companies ororganisations to integrate variousfunctions and programs so thatthey are all interconnected andhave the ability to talk to each

other.

EU European UnionThe European Union was created in1992 following the signing of the

Maastricht Treaty replacing theEuropean Economic Communityand other constituent organisationswhich were originally establishedin 1957. Its aim is to create anenvironment for the free movementof goods, services, labour andcapital across the member states.There is also an emphasis on theabolition of trusts and cartels andthe development of joint andreciprocal policies on labour, socialwelfare, agriculture, transport andinternational trade.

FMEA Failure modes effectsanalysisIs an easy to use and yet powerfulpro-active engineering qualitymethod that helps you to identifyand counter weak points in the

early conception phase of productsand processes. The structuredapproach makes it easy to use andeven for non-specialists it is avaluable tool. The benefitsobtained encompass by and largethe investments in time andresources to execute the analysis.

ICT Information,communications technologyThis is a broad subject concerned

with technology and other aspectsof managing and processinginformation, especially in largeorganisations.

iDEF ICAM DEFinitionlanguageiDEF is the shortened version ofICAM DEFinition Language. It wasan initiative by the US Airforceduring the 70s/80s to modernisetheir technology, specifically theuse of computers in manufacturing.ICAM stands for IntegratedComputer-Aided Manufacturingand the aim was to make themanufacturing process quicker andmore efficient.

ISO International organisationfor standardisation

The ISO is not one organisation, buta network of national standardsinstitutes across 150 countries.International standards are createdthrough consensus agreements byeach of the national delegations.This provides a commontechnological language betweensuppliers and buyers facilitatingtrade and the transfer of

technologies amongst thosecountries involved.

Advanced diploma in purchasing and supplyAcronym guide

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JIT Just in timeOriginally a concept imported fromJapan, based on the idea that only

sufficient quantities should bemanufactured or be made availableto satisfy customers immediateneeds. Relies on an efficient supplychain for its success.

KPI Key performanceindicatorAlso known as key successindicators. They are financial andnon-financial metrics used toreflect the critical success factorsof an organisation or contract. Theyare used in business intelligence toassess the present state ofbusiness or a contract and toprescribe the next course of action.

MRP Material requirementplanningA product-oriented computerised

technique aimed at minimisinginventory and maintaining deliveryschedules.

MRPII Manufacturingresource planningMRPII is concerned with almost

any resource entering intoproduction, including manpower,machines and money in addition tomaterials. This is why the wordresource is usually substituted forrequirement when referring toMRPII.

MSP Managing successfulprogrammesManaging Successful Programmescomprises a set of principles andprocesses for use when managinga programme. It is founded on bestpractice although it is notprescriptive. It is very flexible anddesigned to be adapted to meet theneeds of local circumstances.

NAO National Audit OfficeThe National Audit Office is totally

independent of Government andhas statutory authority to report toParliament on the economy,efficiency and effectiveness withwhich government departmentsand other public bodies use theirresources.

NHS National Health ServiceFounded in 1948, this organisationprovides the majority of healthcare

in the UK. NHS services are largelyfree at the point of delivery, paidfor by taxes. Employing well overone million people, the NHS is thelargest employer in Europe and oneof the largest employers in theworld.

OGC Office of GovernmentCommerceOGC is an independent office of theTreasury. Together with itsexecutive agency OGC buyingsolutions, OGC works with publicsector organisations to gain thebest possible value for money fromprocurement in support of theGovernments efficiency target.OGC supports initiatives thatencourage better supplier relations,sustainable procurement, the

benefits of utilising smallersuppliers and the potential of e-procurement, and represents theUK at the European Union (EU).OGC also supports majorprogramme and projectmanagement, which involvescomplex procurement.

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OPC Operations planningand controlThe activities undertaken that

ensure all required resourceswithin an organisation aremanaged effectively to produceproducts/services right through tothe delivery of the product/serviceto the customer.

OPT Optimised producttechnologyThis is a computer-based techniqueand tool originated by EliyahuGoldratt. In principle, it aidsproduction scheduling systems tofulfil the pace of production duringthe most heavily loaded resourcessuch as bottle-necks.

PAC Public AccountsCommitteeThe Committee of Members ofParliament appointed to examine

and report on the accounts ofgovernment departments and otherpublic bodies. The accounts areaudited by the Comptroller andAuditor General, whose reports onthe accounts form the basis for theCommittees examination ofdepartmental Accounting Officersand subsequent reports.

PARETOA principle which states that inany series of elements to be

controlled, a selected small factorin terms of the number of elementsalmost always accounts for a largefactor in terms of effort see alsoABC analysis. (Source: adaptedfrom The official dictionary ofpurchasing & supply by HKCompton and DA Jessop).

PASA Purchasing and Supply

Agency (NHS)The NHS Purchasing and SupplyAgency is an executive agency ofthe Department of Health,established in 2000. The role of theagency is to act as a centre ofexpertise, knowledge andexcellence in purchasing andsupply matters for the healthservice. The Agency is an activeparticipant in the ongoing

modernisation of purchasing andsupply in the health service, andcontracts on a national basis forproducts and services which arestrategically critical to the NHS. Italso acts in cases whereaggregated purchasing power willyield greater economic savingsthan those achieved by contractingon a local or regional basis.

PDCAPDCA stands for Plan-do-check-actand is a four-step problem-solving

process typically used in qualitycontrol. Also known as the Demingcycle.

PESTLE Political, economic,social, technological, legal,environmentalAn analytical tool that aidsorganisations developing strategiesby helping them understand the

external environment in which theyoperate now and in the future.

PFI Private finance initiativeAn agreement that promotespartnership between both privateand public sectors which enablesthe utilisation of a wide variety ofassets and services in the privatesector. The objective is to improvethe quality and quantity of public

sector capital products and also toprovide more efficient publicservices.

PPP Public privatepartnershipAny alliance between publicbodies, local authorities or centralgovernment and private companiesto produce capital projects or

deliver public services.

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PRINCE2 Projects in acontrolled environmentA process based approach for

project management providing aneasily tailored and scalable methodfor the management of all types ofprojects. Each process is definedwith its key inputs and outputstogether with the specificobjectives to be achieved andactivities to be carried out.PRINCE2 is Crown copyright.

SLA Service level agreementA service level agreement is adocument which defines therelationship between two parties:the provider and the recipient.This is clearly an extremelyimportant item of documentationfor both parties. If used properly itshould:

Identify and define the

customers needs Provide a framework for

understanding Simplify complex issues Reduce areas of conflict Encourage dialogue in the event

of disputes Eliminate unrealistic

expectations.

SMART Specific, measurable,achievable, relevant, timeframed

Is a mnemonic used in projectmanagement at the projectobjective setting stage. It is a wayof evaluating if the objectives thatare being set are appropriate forthe individual project.

SMEs Small and mediumsized enterprisesA small firm is an independentbusiness, managed by its owner orpart-owners and with less than 50employees.A medium sized company mustmeet thresholds for annualturnover and have fewer than 250employees.

SWOT Strengths,weaknesses, opportunities,threats

This is a strategic planning toolused to evaluate the strengths,weaknesses, opportunities andthreats involved in a project or in abusiness venture or in any othersituation requiring a decision..

TQM Total qualitymanagementIs a set of systematic activities

carried out by the entireorganisation to effectively andefficiently achieve companyobjectives so as to provide productsand services with a level of qualitythat satisfies customers, at theappropriate time and price.

TUPE Transfer ofundertakings (protection of

employment)Legislation that aims to ensure thatan employee whose company istaken over has his existingconditions respected by his newemployer. They also apply in somecases for work transferred tocontractors. This includes hours ofwork, pay, pension entitlement andso on.

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Advanced diploma in purchasing and supplyManagement in the purchasing function

COMPULSORY UNIT

UNIT CHARACTERISTICS

This unit is designed to enablestudents to manage their own areaof responsibility within anorganisations internal supply chain,in line with the overall strategicbusiness plan and the operationalplan for the purchasing function.

Students should be able toimplement operational plans fortheir own area of responsibility toachieve objectives set out in theirplan. In doing so they should beable to employ a range ofresources, including human,physical and financial, and manageand delegate tasks effectively.

This unit is about managing theexpectations of the stakeholdersthat are directly involved in the

students own area of responsibilityand will provide them withmanagement techniques to helpthem to involve others, beinnovative, consultative, influentialand persuasive in order to achievetargets effectively.

This unit at level 5 is concernedwith the day to day managementresponsibilities within the

purchasing function and widerorganisation and appropriate linksand understanding of the relevanttheories.

STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to: Evaluate the challenges facing

managers in dynamic andchanging organisations

Analyse the characteristics ofdifferent organisationalstructures and cultures

Use a range of techniques tosupport and implementjustifiable managementdecisions

Formulate plans to effectivelymanage work groups and teams

Propose processes and systems

to enable the successfulimplementation of changeprogrammes to maximisepurchasing efficiency andeffectiveness

Assess the impact of currentlegislation relating toemployment and equality uponpurchasing and supply activities.

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LEARNING OBJECTIVES ANDINDICATIVE CONTENT

1. THE CHALLENGES OFMANAGEMENT(Weighting 20%)

1.1 Define the termmanagement anddifferentiate managementfrom leadership Definitions of

management: Fayol,Mintzberg, Drucker, Brechand Cole

Management: planning,co-ordinating, controllingand motivating staff

Management styles Leadership perspectives

and styles: Hersey andBlanchard, Tannenbaumand Schmidt, Kotter,Lewin.

1.2 Identify the keystakeholder groups whoimpact directly on the

purchasing function,analyse their potentialimpact and explain how tomanage their expectationseffectively Stakeholders: employees,

customers, shareholders,suppliers, government,lenders, trustees, electedmembers

Identifying and fulfillingstakeholder/customerneeds: good products andservice, return oninvestment, quality, priceand measurable outcomes

Working within ethicalcodes of conduct andpractice

Expectations: on time,within budget, meeting

terms and conditions.

1.3 Evaluate the key roles andfunctions of managers inthe purchasing and supply

function Ensuring value for

money/quality at thelowest price (purchaser)

Advising andrecommending suitablepurchasing and supplysystems

Building good relationshipswithin the purchasing andsupply chain

Management of resources(human, financial,materials, equipment) tobe effective in the role

Policy development.

1.4 Compare and contrast thediverse purchasingmanagement practices ofthe private and public

sectors Tendering Recommended suppliers E-commerce: internet,

e-auctions, e-catalogues,electronic data interchange(EDI)

Outsourcing Authority levels (ie

purchase orders)

Relationship building Payment terms and othercontracting arrangements.

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1.5 Create a set of rules forethical behaviour What are ethics?

CIPS ethical codes Corporate Social

Responsibility (CSR).

1.6 Propose ways of reportingeffectively to seniormanagement and securingtop level support andsponsorship for initiativesand implementation of

plans Keeping your stakeholdersinformed

Building a business case Report writing: structure,

content and making itinteresting

Effective meetings Presenting your plans.

2.0 ORGANISATIONSTRUCTURES AND CULTURE(Weighting 20%)

2.1 Evaluate the importance oforganisational structure to

the development andperformance oforganisations Rationale/background:

industrial revolution to

modern day Choice of different structures

to aid management Organisational structures:

conflicts between control andempowerment, autonomy

and entrepreneurship Power.

2.2 Evaluate the nature andscope of organisationalstructures and theimplications of such

structures for the purchasingfunction: Flat

Functional Matrix

Geographical Local

Regional National

International

Global Centralised/de-centralised.

2.3 Assess and evaluatemethods of job design forpurchasing roles

Identifying responsibilities,associated tasks andpriorities

Updating existing roles: viajob description and personspecification

Training needs analysis Competency frameworks Role mapping.

2.4 Define the term cultureand assess differentmodels of culture whichmay exist withinorganisations Definitions and terms

associated with culture How organisational culture

impacts on behaviour,values and assumptions

Organisational influences

of company politics, power,bureaucracy, rules andstandards of behaviour

Models of culturalstrength, masculine/feminine societies, culturalvalues and individualism/collectivism.

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2.5 Evaluate methods andformulate plans formanaging effectively in

international or cross-cultural organisations Stages of planning Methods: managerial and

leadership styles,approaches,communication and mediachannels

Evaluation process ofresearch (primary andsecondary), conductingpilot schemes, gatheringfeedback from staff andchoosing most successfuloption

Considerations: culturaldiversity, existingstructures, codes ofconduct, differing goalsand expectations.

3.0 MANAGEMENT DECISIONMAKING(Weighting 15%)

3.1 Evaluate and apply arange of tools to makeeffective managementchoices and decisions Problem and decision

making process Pareto analysis, Ishikawa

(fishbone) diagram,strengths, weaknesses,opportunities, threats(SWOT), decision makingtrees, cost/benefitanalysis, risk evaluation,paired comparison analysis

Balanced Scorecard (BBS).

3.2 Explain how to formulate,implement and monitoroperational plans for the

purchasing and supplyfunction to achieveorganisational objectives Aligning plans with

strategicobjectives/direction oforganisation

Agreeing objectives andtargets: reducing defects,improving lead times,reducing costs

SMART principles Importance of and ways to

involve the team in theplanning process

Monitoring systems andprocesses including annualand periodic reviews

Reporting structures.

3.3 Evaluate the resource

requirements for theimplementation ofoperational plans for thepurchasing function People as a resource Financial resources Physical resources Time.

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4.0 MANAGING WORKGROUPS AND TEAMS(Weighting 25%)

4.1 Evaluate the concept ofauthority, delegation andaccountability whenmanaging the purchasingfunction Understanding of key

concepts: takingownership, decisionmaking, empowermentand responsibility

Reasons: workload,prioritising, developingindividuals and the team,minimising blame andachieving results

Good time management The delegation process.

4.2 Assess techniques forbuilding, motivating andmanaging successful

teams within thepurchasing and supplyfunction What is a team/group? Stages of team

development: Tuckman andJensen

Team Roles: Belbin,Schutz, Holland, Cattell

Building a balanced team Motivational determinants:

innate drive, desire,fulfilling need

Satisfying individual andteam needs: praise,rewards, recognition,responsibility, promotion,pay

Building relationshipsthrough leadership, withtrust, fairness, equal

opportunities, ethics andrespect.

4.3 Assess the sources ofconflict which may arisewithin the purchasing

function Disagreement about

needs, goals, values,priorities and interests

Poor communication Lack of trust in leadership Lack of direction Lack of clarity in role Scarcity of resources Interpersonal and hygiene

factors.

4.4 Explain how to buildrelationships andencourage integrationwith other parts of thebusiness Changing perceptions of

purchasing (from processto advisory)

Advocates for the

profession/business Consultancy Adding value.

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4.5 Evaluate techniques todeal with conflict withinteams and between

individuals in thepurchasing and supplyfunctions Consultation Mediation Negotiation Arbitration Dispute resolution

(including discipline andgrievance).

4.6 Assess the benefits of asystematic approach torecruitment, appraisal,training and development High calibre of staff Recognition of

achievement Conducting

appraisals/personaldevelopment reviews

(PDRs) Identification of

development needs Providing appropriate

training to meetindividuals role needs

Retention Contented workforce Maintaining high levels of

performance.

5.0 MANAGING CHANGE(Weighting 20%)

5.1 Evaluate the causes oforganisational change andanalyse their potentialimpact on the organisation Globalisation Competition Growth Diversification Performance Technology Practical analysis using

political, economic, social,technological, legal andenvironmental (PESTLE),SWOT and Lewins model:forces for change.

5.2 Differentiate between theneed for fundamental andincremental change inorganisations

Sector characteristics anddynamics

Take-overs, mergers andembracing culturalchanges

Response to marketdemand

Quality and continuousimprovement

Meeting customer

requirements.

5.3 Formulate plans to overcomehuman resistance to changeand to implement change

successfully within thepurchasing and supplyfunction Psychological barriers

Physical barriers Achieving commitment from

staff Staff involvement

Devolving responsibility Monitoring results.

5.4 Identify and analyse thecurrent legislation relating toemployment and equality ofopportunity in organisations The Equal Pay Act 1970 (as

amended) Employment Act 2002 and

Dispute ResolutionRegulations (2004)

Health and Safety at Work

Act 1974 EU Employment Directives,

TUPE, equal treatment,

working time, young people Disability Discrimination Acts

1995 & 2005 Employment Equality (Age)

Regulations 2006 andamendment Regulations

2008

Sex Discrimination Act 1975and Amendment Regulations2008.

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5.5 Evaluate the impact of e-commerce and technologyon the management of

organisations and people,and in particular thebenefit to the purchasingfunction Intranet Knowledge management

systems Management Information

System (MIS) / MarketingInformation Systems(MkIS)

Flexible workingarrangements

Telecommunications e-sourcing e-procurement.

5.6 Identify ways to monitorand control the impact ofthe change process on the

performance of the supplychain and assess theireffectiveness Budget Project measurement Benchmarking Auditing Employee and stakeholder

reactions Appropriate

communicationprogrammes involving thirdparties internal changes.

5.7 Assess the importance ofmanaging continuity ofperformance whilst

implementing change andexplain how to do this The importance of

maintaining a business asusual approach formanaging supply

The process of internalhandover from oneindividual/team to another

How a supplierimplementationprogramme is organised,including the potentialbenefits of a trial/pilotperiod and ramp-up/ramp-down phases

How existing suppliers canbe managed andincentivised to see out thefull terms of their contractswithout disruption to

supply or service levels.

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COMPULSORY UNIT


This unit is designed to enablestudents to undertake risk analysisand a variety of risk assessmentsrelating to different aspects ofpurchasing and supply and toimplement a range of appropriaterisk management tools andtechniques.

Students will use a variety of riskassessment tools and techniquesdesigned to provide a detailedanalysis of supply chain situations,including legal, corporate socialresponsibility (CSR), ethical, healthand safety, financial, international,innovation and a variety of otherpotential risk scenarios. The scopecovers both the proactiveidentification and avoidance of risk,as well as provision for post-event

recovery initiatives.

By the end of the unit studentsshould be able to: demonstrate a good knowledge

and understanding of riskawareness and an effectiveapproach to risk management

apply a variety of tools andtechniques, in a diverse range ofcontexts, to proactively establishthe level of risk presented and torecommend ways of avoiding,mitigating or managing thoserisks.

STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to:

Analyse the nature and scope ofrisks for the organisation

Assess the sources of risks andthe likely impact of those risksupon the organisation

Plan and implement anappropriate risk managementprocess in order to protect theorganisations interests

Explain how supplier appraisals,pre-qualification of suppliersand contract monitoring canhelp to mitigate risks

Evaluate systems for testingrisks and monitoring themaccordingly

Apply risk managementprinciples to various purchasingand supply managementscenarios

Evaluate the application of a

range of techniques to mitigaterisk proactively and to reducethe consequential losses in theinstance of a risk eventoccurring

Explain how the use of soundnegotiation approaches andtechniques help to ensure betterbusiness value by reducing riskand vulnerability.

Advanced diploma in purchasing and supplyRisk management and supply chain vulnerability

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1.0 UNDERSTANDING THENATURE OF RISK INPURCHASING ANDSUPPLY(Weighting 25%)

1.1 Define the terminologyused in risk assessmentand management Definition of risk with use

of examples How risk has a direct

impact on an organisationssuccess and how risk canbe directly related to cost

Key terms: hazard, risk, riskevent, exposure, loss -direct, indirect andconsequential - mitigation,avoidance, assessment,management, force

majeure and acts of God The differences between

risk, vulnerability, exposureand loss, as well asunderstanding the range ofmanagement actionsavailable

What is meant by a riskappetite and use ofpractical examples to show

how this applied.

1.2 Distinguish betweendirect physical loss (egdisrupted supply) and

indirect consequentialloss (eg reputation) Key types of loss that may

occur: financial,reputational,environmental, health,safety, welfare and lostopportunities.

1.3 Analyse potential sources

of risk to organisations ofboth internal and externalorigin Internal and external

hazards and risks Range of risks that might

occur within the workplace Analysis of external

environment factors usingthe PESTLE tool

The likely impact on the

organisation and itsappetite for risk

Basic quantificationmethods for measuring.

1.4 Analyse and explain theuse of segmentation andbusiness tools to reduce

supply chain vulnerability Segmentation tools to help

assess and manage supplychain risk appropriately (egKraljic Model, BostonMatrix, Pareto Principle,KPIs, Spider web orappropriate alternatives)

How you would take adifferent approach to

purchasing from a criticalor bottleneck market tothat of a leveraged oracquisition market

Management of differentproducts or services withinan organisational portfolio

Definition of supply chainvulnerability, supply failureand supplier failure

How to map a typical

supply chain and identifypotential sources of supplyvulnerability

The potential impact ofsupply and supplier failure

Range of mitigatingactivities that a purchasercould use when looking toprotect against supply orsupplier failure.

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1.5 Distinguish betweenstrategic, operational andproject based areas of risk

Examples of how to definerisk at the strategic,operational and/or project-based level

Range of risk mitigationmethods at each level

How risk can be boundedand also how, ifunmanaged, it can haveknock-on consequentialimpacts on other areas ofan organisation.

1.6 Evaluate the role of anorganisationsstakeholders in risk

management The roles and

responsibilities of anorganisations risk functionin relation to otherfunctional areas

The impact of a risk eventat the functional level

The benefits of a cross-functional team whenassessing, preventing andminimising risk

The role of purchasing tomitigate against potentiallosses to the wholeorganisation from riskevents

The merits of taking aconsistent approach acrossthe organisation to theassessment of risk.

1.7 Evaluate how effectiverisk management canhave positive benefits for

organisations Reduction in levels of

threat Reduced exposure to

uncertainty Higher risk opportunities

being successfully pursuedor mitigated

Successful anticipation ofshocks or other risk events

Crises being avoided ormitigated

Successful application ofcontingency or businesscontinuity plans

Disaster recovery planningand implementation

Limited or no reputationalor public relations damage

Securing supply andmitigation of supply chain

vulnerability Improved decision and

policy making Increased customer and

stakeholder satisfaction Improved organisational

co-ordination with serviceand delivery partners.

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1.8 Assess risks involved withusing technology Reliance on technology

Security Hackers Fraud Storing of vital documents

and materials.

2.0 RISK MANAGEMENTPROCESSES ANDSTRUCTURES(Weighting 25%)

2.1 Develop a riskmanagement strategy Example of an appropriate

supply chain risk policy How to define objectives

and content for a riskmanagement strategy

How an organisationsappetite for risk may affectthe risk policy

The purpose of a riskmanagement strategy anda risk managementframework

The key components of arisk management strategy

The key implications of theTurnbull report.

2.2 Formulate an effective riskmanagement process inthe context of an

organisations strategicobjectives and a dynamicexternal environment Key stages of a risk

management process; riskidentification, risk analysis,risk evaluation, risktreatment and riskreporting

Methods for identifying,assessing and quantifyingrisks

Classification of risk withinthe organisational context

A risk report and the role ofa board risk committee

How identified risks shouldbe monitored andreviewed.

2.3 Evaluate the probability ofa risk occurring inparticular circumstances,

the possibleconsequences and thepotential range ofmitigating actionsrequired Definition of probability in

relation to the occurrenceof a risk event

How the likelihood of a riskoccurrence will affect theapproach to riskmanagement

Application of the use ofhistoric statistical data inpredicting the likelihood offuture risk occurrences

Identification of a range ofoperational risks andassign a probability to eachone

Prioritisation of key risks

with explanation as to howresources might beallocated appropriately tomitigate such risks.

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2.4 Analyse the resourcesrequired for effective riskmanagement and for

building a risk awareculture withinorganisations Responsibility of everyone

in an organisation Definition of risk

awareness and thebenefits of awareness

Description of anappropriatecommunicationprogramme to promote riskawareness

How different functionscan work together toreduce risk

Promotion of a riskawareness culture amongkey elements of thesupplier base

How suppliers can assist in

the promotion of riskawareness.

2.5 Propose ways in whichthird party supplierresources are used to

reduce risk and mitigatelosses during a risk event Range of supply solutions

for mitigating losses in theaftermath of a risk event:insurance, loss adjusting,alternativeaccommodation, disasterrecovery plus restorationand recovery services

Appropriate methods ofpurchasing and paying fordisaster recovery servicesboth during a risk eventand in the normal run ofbusiness

Incentives to retainspecialist services at timesof national disaster,including flood andhurricane damage.

2.6 Develop an appropriate riskregister for the purchasingand supply function

Definition of a risk registerand the benefits of having

one Outline of key components

of a risk register The process of maintaining

and reviewing a risk register Design of a basic risk

register for the purchasingand supply function

Procedures for monitoringand managing the key risks

identified.

2.7 Evaluate insurance as afinancial means of riskprotection The insurance service

including the role of thebroker and the insurer

How insurers use the re-

insurance market to spreadtheir risk

The key stages to resolve a

claims event Definition of captive or self

insurance with descriptionof its practical application

The merits of anorganisation self-insuring

and the types of risk that

this might include The relative merits ofcaptive self-insurance.

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2.8 Identify and apply a rangeof qualitative andquantitative risk

identification and analysistechniques to ensurebetter decision quality inreviewing alternatives fora superior projectoutcome Scenario analysis and

planning Auditing Decision tree analysis Fault tree analysis Dependency modelling External environment

analysis Assumption Identification frameworks.

3.0 MANAGING RISK ANDVULNERABILITY(Weighting 50%)

3.1 Develop appropriatesolutions to mitigate theinherent risk in thefollowing supply chainissues: Supplier appraisal,

selection and management Project failure (eg capital

procurement investmentappraisal)

International sourcing Implementation of new

technologies Corporate social

responsibility (CSR)including ethical,environmental and healthand safety issues

Public sector procurement.

3.2 Evaluate and applymonitoring and controltechniques for testing risk

on an ongoing basis: Internal audits Interdepartmental

exchanges External experts: advisers,

mystery shoppers, researchcompanies and the police

Use of benchmarking toassess and mitigateexternal risk

Use of competitiveintelligence

Quality systems, TotalQuality Management(TQM), quality inspectionand quality control.

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3.3 Develop contingencyplans designed toovercome risk situations

What is meant by acontingency plan

The key components of abusiness continuity plan(BCP) and disaster recoveryplan and how such plansare put into practice

Key contingency measuresused by a BCP: telephonecascades, emergency andfire wardens, use of ITsystems to help co-ordinate activities, use ofalternative accommodationand back-up informationtechnology systems

The benefits of businesscontinuity planning from anoperational, financial andreputational perspective.

3.4 Analyse specific key risksand exposures inpurchasing and supply

and identify appropriatemitigating actions Contractual failure,

consequential loss andprovision for remedies

Supplier insolvency,monitoring and guarantees

Quality failure, non-conformity and correctiveaction

Project failure, projectplanning principles andcorrective action

Security of supply,contingency planning,stock holding andalternative sources ofsupply

Technology failure, impacton supply, use of back-upsystems and disaster

recovery Security, theft and damage

Fraud, accounting andpayment exposures,conflicts of interest,

purchasing ethics andcodes of conduct

Product liability,reputational damage,consumer confidence

Appropriate negotiationstrategies to reduce futurecontract risk and supplychain vulnerability toenhance long termbusiness value

Key steps in negotiationplanning for success

Strategic approach andnegotiation techniques

Best practice methodology Tactics and standpoints Behaviours of successful

negotiators Contractual issues and

remedies

Dispute resolutionalternatives.

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COMPULSORY UNIT


Achieving success within thesupply chain involves a complexrange of variables, which canfrequently be dependent on oneanother for the success of thesupply chain.This unit is designed to enablestudents to use a range oftechniques and strategies todevelop and improve supplierperformance in order to achievecompetitiveness, efficiency andprofitability within the supply chain.By the end of this unit, studentswill be able to measure andevaluate the effectiveness ofsupply chain performance. Theywill be able to identify innovativedevelopment of systems to improvethe performance of the supplychain, and make justifiable

recommendations forimplementation in order to aid theeffectiveness of the supply chain.


Evaluate the organisationalprocedures and techniques thatcan be used in developing andimproving a range of supplierperformance areas

Set performance standards towhich supply chain strategiesshould aspire

Develop an integrated approachto the implementation of supplychain activities which aredesigned to maximisecompetitive advantage andreduce risk exposures

Propose systems and techniquesto achieve best practice andenhance customer service for allstakeholders.

Propose and justify differentnegotiation, processes,strategies and styles for a given

range of situations Discuss the contribution that ICT

can make to supply chainbusiness processes.

Advanced diploma in purchasing and supplyImproving supply chain performance

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1.0 DEVELOPING ANDIMPROVING SUPPLIERPERFORMANCE(30% weighting)

1.1 Develop source-relatedactivities so as to informand provide value to otherfunctional areas in theorganisation, in line with

the overall objectives ofthe organisation The business requirements

for supply, and documentin an appropriate way:specification, service levelagreement (SLA)

The reasons for usingcross-functional teams todetermine businessrequirements and conduct

stakeholder consultations The need to align supply

chain activities to theorganisational strategy

The need to maintain adegree of supply-chainflexibility to respond tochanging needs

The need for purchasing toprovide customer serviceto other functional areas

and the tools andtechniques to implementsuch engagement andconsultation, regularmanagement reporting,helpdesk solutions,consultative style

How purchasing, as afunction, can adddemonstrable value to thebusiness; cost reduction,risk mitigation, security ofsupply, enhanced service,improved quality andsupplier innovations

How purchasing can useits supply-marketknowledge to assess andreport risks, threats and/orsupply chain vulnerabilitiesin an accurate and timely

manner An appropriate

communicationsprogramme that keepsother functional areasinformed aboutpurchasing-relatedactivities and adds value totheir own areas ofresponsibility.

1.2 Develop appropriate KPIs toimprove supplierperformance

The purpose of supplier KPIsin the improvement of

supplier performance How a supplier KPI is

developed and measured The need for base-lining

existing performance priorto the development of

supplier KPIs A range of potential supplier

KPIs, including priceeffectiveness, cost savings,

service enhancements,quality measures and

improvements, innovationand risk/compliance

The implications of a supplierfailing to meet KPIs and

appropriate managementcontrols to assist compliance;

service credit/debit regimes,

incentivisation and gain sharemodels

Penalty clauses, liquidated

damages,increased/decreased share of

business etc How a suppliers performance

can be audited to ensure KPIsare accurately reported

The various processes of

benchmarking and howbenchmarking can be used togenerate stretching KPIs.

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1.3 Analyse purchasingactivities and explain howto manage them to assure

an organisation meets itsobjectives The benefits to the

organisation of robustsupplier selection andevaluation

The range of appropriatesupplier selection andevaluation techniquesdesigned to achievebusiness requirements

The methods of monitoringand measuring supplierperformance

Information on howpurchasing can influencethe quality delivered fromsuppliers

How purchasing cancontribute to anorganisations approach to

total quality management

Process improvementmodels, and how they canbe used in a purchasing

context to bring benefit toan organisation

A typical purchasingplanning cycle and howpurchasing activities needto be aligned toorganisational plans

How purchasing cancontribute to fiscalplanning activities

Ways in which purchasingassists research anddevelopment by third partysuppliers and collaborators

How should vendors berated to demonstrate apositive contribution to thebusinesss performance?

How cross-functionalteams can help purchasingdeliver better results for a

business.

1.4 Evaluate and explain theimportance of developingand managing external

contacts with the supplymarket Reasons for developing

and managing externalcontacts within the supplychain

Definitions of: innovation,market research, supplieranalysis, marketintelligence, competitive

intelligence (and others) Definition of reverseengineering

The process of supplymarket research/analysis

How to develop anappropriate relationshipwith third party researchand analysis organisations

Business reasons toconduct supply market

research Appropriate processes for

testing and evaluatingsupply innovations

The processes ofbenchmarking and howthey can be used to gainmarket information

The ways in whichpurchasing can contribute

to production forecasts.

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1.5 Propose ways to developnew and existingsuppliers and improve

their performance The processes and benefits

of supplier appraisal andselection

The processes and benefitsof vendor rating andfeedback

The terms value analysis,value management andvalue engineering

The ways in whichsuppliers can work with anorganisation to improveproductivity, efficiency andquality and the role ofpurchasing in facilitatingthese processes

The meaning of supplieradoption and the processfor adopting a newsupplier and the key stages

in implementation that areneeded to switch supply

The meaning of sunk andswitching costs

Practical reasons why

some organisations willnot switch supply, despitepotential benefits

The process of trialling andpiloting new innovations

The follow-on processesrequired to implement anew supply innovation;user acceptance andcontrolled roll-outs

How suppliers can bemanaged and developed tocontain supply-related risksand reduce supply chainvulnerability.

1.6 Devise appropriatesupplier managementorganisational models in

both the centralised anddecentralised purchasingfunction, and demonstratehow other functionalareas might interact inthese models The relative merits of

single point of contactversus multiple touch-points for managingsupplier relationshipseffectively

The role of purchasing as afacilitator of supplierrelationships

The purpose and potentialbenefits of a cross-functional approach tomanaging supplierrelationships

The role and

responsibilities ofexecutive sponsors ofsupplier relationships

The advantages,disadvantages andarrangement of adecentralised purchasingfunction.

The concept of a leadbuyer and how this might

operate for different typesof supply.

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1.7 Describe appropriateleadership styles tosupport supplier

development Key factors to encourage a

supplier to develop andimprove the delivery ofgoods and services

The relative merits ofselling and telling

Various types of supplierincentive and their relativemerits

How a gainshare modelworks and potentialproblems with the concept

Appropriate circumstancesfor purchasing to take adirective approach tosupplier development andthose required for afacilitative approach

The need for consistentmeasures of progress

when developing suppliers The need for purchasing to

communicate supplierdevelopment internallywithin an organisation.

1.8 Identify the criticalelements of supplierdevelopment

Respective roles andresponsibilities of thoseinvolved in supplierdevelopment, includingthose of executivesponsors

The need for continuousimprovement and methodsfor achieving it

The need for creating andfostering a team-workingcollaborative environmentboth internally andexternally with thesuppliers

The role of innovationcouncils

The relative merits of jointproblem solving withsuppliers

Process improvement

techniques; TQM, SixSigma and businessprocess re-engineering

Gainshare models forinnovation and processimprovement

The meaning ofbreakthrough valuecreation and how this canbe achieved in a supply

chain context The need for policycreation and compliance.

2.0 MAXIMISINGCOMPETITIVENESS(30% weighting)

2.1 Explain how to managesystematic organisationalefforts to create andmaintain networks ofcompetent suppliers andto develop theircapabilities to meetcompetitive challenges Why and how suppliers

are segmented The key characteristics of

each segment of thesupply base Tier 1: strategic, high

value-add, high risk,innovative

Tier 2: regularpurchases, medium-high value, frameworkagreements

Tier 3: commodity items,one-off purchases, littlerelationship or value-add

The need for a consistentsupplier managementprocess and the keycomponents it mightcontain

The benefits of supplier

rationalisation.

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2.2 Evaluate and explaindifferent ways in which tomanage and maintain

effective communicationsbetween an organisationand suppliers in thedevelopment, presentationand transfer of qualityspecifications for theassurance of compliance The process of cross-

functional involvement inthe development of aspecification and thespecific role for purchasing

Supplier involvement andthe key benefits andpotential drawbacks to anorganisation

Some of the key principlesof communicatingeffectively to suppliers

The benefits of supplierforums and supplier

associations Risk transfer issues and

management techniques.

2.3 Explain ways in which tomanage cost reduction fororganisational efficiency

and provide added valueto customers A typical purchase cost

reduction programme andhow such a programme isdeveloped

The benefits of volume(time and/or quantity)contracts and systemscontracts

The relative merits ofstockless purchasing andjust-in-time (JIT)

How customer-drivensupply chain innovationscan be developed and therole of purchasing increating and establishingeffective supply

The balance between costefficiency and quality/risk

issues.

2.4 Plan and develop a well-structured approach tomeasuring the

performance of suppliers The development of joint

performance appraisalsystems

Use of cross-functionalteams from bothorganisations to monitor,review and analyse resultson a periodic basis

The use of both

quantitative and qualitativemeasures Use of 360-degree

feedback Supplier business

continuity plans (BCP).

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2.5 Analyse different supplymarkets and conditions,and develop proposals for

the revision of associatedoperational processes, inconjunction with suppliersand logistics functions Benchmarking benefits,

limitations and approaches The benefits of

documenting the key stepsin a supply chain processflow and typical ways inwhich this is achieved;ICAM DEFinition language(iDEF))

The role of businessprocess re-engineering inimproving the supply chainfor inbound logistics andmaterials flow

The process of lean supplyand the arguments for andagainst (Lamming/Cox).

3.0 ADVANCED NEGOTIATIONIN THE SUPPLY CHAIN(20% weighting)

3.1 Evaluate differentnegotiation strategies,styles and levels indifferent supply chaincontexts and formulateappropriate strategies fornegotiation within andacross the supply chain The basic tenets of the

negotiation process andthe key behavioursrequired to negotiateeffectively in a variety ofpurchasing contexts

The need for teamworkand clear team roles innegotiation

The role of trust innegotiation for both newand long-standing supplier

relationships Open-book negotiations

and their relative merits The role of negotiation and

associated aspects indispute resolution

Issues of risk and rewardand how these may bemanaged in negotiation.

3.2 Analyse and explain howto manage the negotiationprocess in line with

organisational objectives How a negotiation

campaign is designed anddeveloped and the keyconsiderations required indoing so

How the businessrequirements for supplyneed to be reflected in thedetailed negotiation plan

How corporate policyand/or organisationalobjectives may affect thenegotiation plan in termsof behaviour, targets,timescales and/or scope

Key ethical considerationswhen leading a negotiation.

3.3 Explain advancednegotiation techniques

Transactional analysis Game theory Advanced non-verbal and

psychological techniquesfor influencing

Building and maintainingrapport

Negotiating in the contextof established long-termcollaborative relationships.

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4.0 IMPROVING THEEFFICIENCY ANDEFFECTIVENESS OF THE

SUPPLY CHAIN(20% weighting)

4.1 Describe how to developand implementappropriate informationand knowledge sharingsystems betweenpurchasing departmentsand suppliers to provide

benefits to both parties Reduced production cycletimes

Improved solutions tooperationaldifferences/difficultiesincluding planning

Improved inter- and intra-site communications

Improved productdevelopment

Reduced selling efforts Long-term security of the

business Reduced risk exposure to

supply chain failure.

4.2 Analyse the application oftechnology to automateand streamline key

operational processeswithin the supply chain(both internal and externalto the organisation) Information flow and use

of supply-side extranets e-sourcing and electronic

ordering/payments: on-linecatalogues, electronicpoint of sale (EPOS),electronic fund transfer(EFT)

Automated purchase-to-pay systems

Automated payments,accounting andreconciliation

Use of an extranet toinclude cross-functionalrepresentatives bothinternally and externally

Reduction of fraud andpayment error risks

Planning, monitoring andcontrol systems.

4.3 Evaluate and explain thebenefits of automatedprocesses and information

flows and their impact onthe supply chainperformance The benefits of automated

supply chain processes:reduced cost, improvedcommunication, reducederror, reduced lead time,higher accuracy, greaterquality, improved supplier

relations, real-timeinformation, reduced fraud,management informationand feedback

The benefits of automatedprocesses and theinformation gained fromthem for suppliers andtheir businesses

How and why suppliersmight choose to invest

jointly with the purchaserin automation of the supplychain

Extranets and how inpractice they work with asupply base

The benefits of automatedpurchase-to-pay systems

The importance, natureand contribution of ICT to

knowledge management.

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OPTIONAL UNIT


This unit is designed to providestudents with an appreciation ofthe basic principles of marketing sothey can interact more effectivelywith marketing colleagues withintheir organisation. It provides aninsight into the role of marketingwithin an organisation and sets outmarketings relationship withpurchasing and other businessfunctions.

Students will be introduced toconcepts, tools and techniques thatare widely used by their marketingcolleagues. It will help purchasingstudents to understand theterminology of marketing and toidentify ways that they cancontribute more effectively towardstheir organisations marketing

efforts. The unit is applicable tostudents working for organisationsin all sectors (including not-for-profit/third tier sectors) andgeographic territories. Whereappropriate, internationalmarketing aspects are considered.

By the end of the unit studentsshould be able to evaluate andapply marketing tools and

techniques in a range of contexts,and to understand how marketingcontributes to key businessobjectives, in particular growth inincome, profit and market share,and enhanced customersatisfaction.

STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to: Evaluate the key components of

effective marketing, planningand control within anorganisation and develop amarketing and promotional plan

Assess how marketers developa detailed understanding ofcustomers and applysegmentation techniques

Analyse the market research

process and market researchtechniques

Apply the marketing mix to arange of organisations anddetermine how the marketing

mix elements can be integratedto achieve business objectives

Analyse the value of developinglong-term customerrelationships and applytechniques which buildcustomer loyalty andsatisfaction

Identify how purchasers cancontribute towards the effectivedevelopment of the marketingmix and execution of marketingplans.

Advanced diploma in purchasing and supplyMarketing for purchasers

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1.0 MARKETINGMANAGEMENT,PLANNING ANDCONTROL(Weighting 20%)

1.1 Examine the marketingfunction within anorganisation and explorethe concept of marketing

orientation Definitions of marketing The contribution of the

marketing function withinan organisation

Production orientation,product orientation, salesorientation and marketingorientation

The steps an organisationmight take to achieve a

high level of marketingorientation.

1.2 Evaluate marketingsinteraction withpurchasing and other

functions Marketings relationship

with purchasing and otherorganisational functions

The impact of marketingdecisions and activities onpurchasing and otherorganisational functions

Areas of potential conflictbetween marketing andpurchasing, and otherfunctions within anorganisation

How internal conflicts canbe managed and resolved.

1.3 Analyse and explain therationale and backgroundto marketing planning

Strategy and its relevanceto marketing planning

Tools and models used inthe development ofstrategic options: Ansoffmatrix and Porters genericstrategy

How strategic options canbe prioritised andevaluated

Options for enteringmarkets overseas andpotential barriers to entry

How effective (SMART)objectives are developed

Corporate objectives andmarketing objectives

The role of the marketingplan within anorganisation.

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1.4 Assess the value ofplanning and the stages inthe marketing planning

process Benefits of marketing

planning Potential challenges and

issues encountered withmarketing plans

The marketing planningprocess

The contribution of thepurchasing function in thedevelopment of marketingplans and throughout themarketing planningprocess.

1.5 Evaluate the uses andapplication of themarketing audit The role and uses of a

marketing audit An organisations macro

environment An organisations micro

environment The uses of a SWOT

analysis SWOT analysis in respect

of different organisations How to analyse the

competitive environmentusing Porters Five Forces

model.

1.6 Evaluate and measure theperformance of marketingplans

The importance ofmonitoring the executionof marketing plans andmeasuring their success

Marketing keyperformance indicators(KPIs)

Methods of measuringmarketing performance

The role of budgets inmarketing planning.

1.7 Assess the differencesbetween goods andservices marketing The specific characteristics

of services versus goods The specific challenges

faced by servicesmarketers

How challenges are

managed by servicesmarketers.

2.0 UNDERSTANDINGCUSTOMERS AND THEIRNEEDS

(Weighting 20%)

2.1 Analyse organisationalbuying behaviour Characteristics of

organisational markets Organisational decision

making process Roles of individuals within

organisational buying Influences on

organisational buyerbehaviour

Implications oforganisational buyingbehaviour on marketingactivities.

2.2 Analyse consumer buyingbehaviour Characteristics of

consumer markets Consumer decision making

process Influences on consumer

buyer behaviour What motivates consumer

buyers The implications of

consumer buyingbehaviour on marketing

activities.

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2.3 Evaluate and applysegmentation, targetingand positioning

Benefits of segmentation The criteria for an effective

segment Segmentation methods for

the consumer market Methods used in

segmenting organisationalmarkets

Meaning of targeting andthe three target marketstrategies

How organisations decidewhich markets to target

How positioning is used toachieve competitiveadvantage and how thepositioning concept isapplied to a range oforganisations.

3.0 THE MARKETING MIX(Weighting 30%)

3.1 Analyse how products aredeveloped and managed Components of a product Role of branding and the

importance of developingstrong brand values

Key strategic brandingdecisions and identifyalternative brandingstrategies

The concept of productportfolio management andapply recognised productportfolio managementtools, the BostonConsulting Group matrixand the product life cycle

The rationale fordeveloping new products

New product developmentprocess

The adoption of newproducts by customersusing the diffusion ofinnovation concept

The contribution of thepurchasing function in thedevelopment of newproducts.

3.2 Analyse the role of pricingwithin the marketing mix Importance of pricing and

organisational pricingobjectives

Factors that should beconsidered whendetermining productpricing

Main approaches to pricing Pricing strategies to

products at each of the lifecycle stages

The different pricingstrategies that could beconsidered for productsperforming at differentlevels in the BostonConsulting Group matrix

The involvement andcontribution of purchasingin pricing decisions.

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3.3 Analyse the role ofchannel management inthe marketing mix

Meaning of channelmanagement and its role inachieving marketing andbusiness objectives

Main channels ofdistribution and thefunctions that channelintermediaries perform

Criteria used to evaluateand select distributionchannels

How an organisationselects, motivates andmanages channelintermediaries to achievehorizontal and verticalintegration

The impact of informationtechnology on channelmanagement

The contribution of the

purchasing function inchannel management.

3.4 Analyse the role ofpromotion (customercommunications) in the

marketing mix The role and importance of

customer communications Potential customer

communication objectives Communications models;

AIDA and DAGMAR Stages in the development

of a promotional plan Components of the

promotional mix Role of the promotional

mix in influencingorganisational andconsumer buyers

Techniques used tomeasure promotionaleffectiveness

How the promotional mixis used at different stagesin the life cycle and at

different levels in theBoston Consulting Groupmatrix

The role and contributionof the purchasing functionin the specification andproduction of customercommunications.

3.5 Analyse and apply theextended marketing mix The rationale for the

development of theextended marketing mix

Role and importance ofpeople in servicesmarketing

Meaning and importanceof process in servicesmarketing

Contribution of physicalevidence services

marketing How the extendedmarketing mix componentshelp marketers to addressthe challenges they facewhen marketing services.

3.6 Explain how themarketing mix can beapplied in internationalmarkets

Additional factors thatmarketers should considerwhen applying themarketing mix ininternational markets

The contribution ofpurchasing in developingthe marketing mix forinternational markets.

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4.0 MARKETINGINFORMATION ANDRESEARCH

(Weighting 15%)

4.1 Explore the role andimportance of marketresearch and explain howit informs marketingdecisions Meaning of market

research Importance of market

research as a decision-making aid

Potential marketingproblems and how theycan be helped throughmarket research

Sampling and its key rolein market research

Sampling techniques Quantitative, qualitative,

primary and secondary

research.

4.2 Apply the stages of themarketing researchprocess to obtain

information to aidmarketing decisions andplanning The stages of the

marketing researchprocess

Research objectives Contents of a full research

plan Techniques used for

collecting primaryqualitative and quantitativedata

The internal and externalsources of secondary data

Quantitative andqualitative data collectionmethods

Primary and secondarydata.

4.3 Examine competitoranalysis, and evaluate itsuses and the sources of

information Uses of competitor

intelligence Type of competitor

information which is likelyto be of use to marketersand purchasers

How competitorintelligence can begathered

Main sources ofcompetitor intelligence

How the purchasingfunction can assist incompetitor analysis.

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5.0 MANAGINGRELATIONSHIPS(Weighting 15%)

5.1 Identify and analyse keystakeholder groups An organisations

stakeholders The various needs and

objectives of differentstakeholder groups

How marketing strategyand activities can lead tosatisfying stakeholderobjectives

Role of communications instakeholder management

Purchasings contributionto stakeholdermanagement.

5.2 Examine the role ofprospects and explaintheir contribution in

building market share Definition of prospects Key role of prospects in

building market share How relationships with

prospects can be managed Marketing activities which

can be used to identify andconvert prospects.

5.3 Assess the management ofcustomer relationshipsand identify good practice

in relationshipmanagement Definition of customer Relationship marketing and

transactional marketing Techniques in building and

managing long-termcustomer relationships

Meaning and use ofCustomer RelationshipManagement (CRM) inmanaging customerrelationships

Stages of the process inimplementing CRM withinan organisation

Challenges and benefits ofimplementing CRM withinan organisation.

5.4 Evaluate the long-term

benefits of customerloyalty and satisfaction Meaning of customer

loyalty Benefits of achieving

customer loyalty The ways that customer

loyalty can be created andmaintained

Customer satisfaction and

how it can be achieved How customer satisfactioncan be measured.

5.5 Examine and evaluate therole of staff asstakeholders

Staff as a major asset toan organisation

Role of internalcommunications intraining, motivating andeducating staff

Different methods ofcommunicating internallywith staff

The internal

communications plan.

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OPTIONAL UNIT


This unit aims to identify the majorareas of concern in effectivelymanaging storage and distributionthroughout the supply chain. It isessential that goods are movedthrough supply chains to customersat the right time, in the rightcondition, at the right place and atthe right cost. Failure in any ofthese areas will add unnecessarycosts to the ultimate customerwhile success will add value, anddelight the customer.

It is essential that the managementof inventory, storage, distributionand general logistics are co-ordinated, both upstream anddownstream, in order to reducelead times, provide agility andreduce unnecessary costs. In order

for this to happen it is essentialthat relationships, both internallyand externally, are honed to theappropriate level.

To be effective, storage anddistribution must fit in a seamlessway to the total supply chainlocally, nationally and globally.


Evaluate the objectives andscope of storage and distributionin the supply chain

Assess how the activity canmeet its service and costobligations while adding value

Evaluate the factors thatstrategically affect the designand organisation of a storageand distribution network

Compare different transportmodes, and decide whether tooutsource transport or managethe activity in-house

Compare and evaluate theapproaches used for evaluatingthe cost and servicerequirements when designingthe layout of storage andwarehouses

Evaluate the various types ofstorage and handlingequipment, coding systems and

returns procedure required inmodern storage andwarehouses

Compare and evaluate variousmethods for controlling theactivity in terms of security andachieving stated performancecriteria

Major legal areas of concern tostorage and distribution

Evaluate how and why ICT canimprove the efficiency andeffectiveness of the activity.

Advanced diploma in purchasing and supplyStorage and distribution

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1.0 OBJECTIVES AND SCOPEOF STORAGE ANDDISTRIBUTION(Weighting 15%)

1.1 Determine the scope andobjectives of storage anddistribution The objectives of the

activity The role of storage and

distribution in a typicalbusiness environment

The differences betweenroles the activity has indifferent organisations

The network ofrelationships required forthe activity to functioneffectively.

1.2 Analyse and explainconnections betweendistribution, storage and

the supply chain The total cost concept and

the idea of sub-optimisation

The total cost concept andwhy it is relevant

The major areas that needto be evaluated in order toarrive at an optimalsolution

The cross-functional team-working skills that need tobe developed to avoid sub-optimisation problems.

1.3 Develop effective andmeasurable servicestandards The concept of the term

customer in storage anddistribution environments

Methods that could beused to improve theinternal and externalcustomer interface

How to developappropriate action plans toimprove customer service

The various measures ofcustomer performanceinternally and externally

The cost of service levelsversus benefits.

1.4 Assess and evaluate theconcept of adding value instorage and distribution

The concept of addingvalue in the above contextwith appropriateillustration

The role of other functionsinternally and externally inhelping to add value to theactivity

Appropriate measurementcriteria in this area.

1.5 Analyse the problemsassociated with the areaof service to cost trade-offs The major cost and service

parameters that need to beevaluated in the storageand distribution area

Appropriate methods ofappraising such a problem

Environmental factors thatcould have an impact inthis area

Ways of quantifying costsand service in this area.

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2.0 DISTRIBUTION PLANNINGAND MOVING GOODS(Weighting 15%)

2.1 Evaluate the strategicfactors affecting thechoice of a storage anddistribution network Macro level factors

affecting the choice of astorage and distributionnetwork

Major methods of storage The concept of a

distribution network Current methodologies that

could be used in this areato provide an optimalsolution.

2.2 Appraise and evaluate therole of third partycontractors and logistic

service providers How you would evaluate

the use of third partycontractors and logisticservice providers

How to develop anappropriate action planand methodology for suchan exercise

Appropriate KPIs in theselection process

The internal-externalinterfaces that would needto be consulted in such anexercise and why

Key stakeholders inthis area.

2.3 Appraise and evaluatedifferent transportationmodes

Differentiation betweenthe various transportmodes

The characteristics andsuitability for differentconsignments

The concept of multi-modaltransportation and itsadvantages.

2.4 Assess the importance ofgood transport routing andload planning

The factors that need to beconsidered in vehiclerouting

Major factors that must beconsidered in loadplanning

Appropriate computergenerated models thatcould be used to assist inthe areas of routing andload planning

How appropriate KPIscould be developed in thisarea

Major KPIs that could beused in these areas.

2.5 Assess the impact of UKimport customs controlsand risks associated withdifferent Incoterms

The associated problemswith UK import control

How the risks can varywith imports depending onthe Incoterm chosen.

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3.0 WAREHOUSING ANDMANAGEMENT OFGOODS

(Weighting 25%).

3.1 Appraise and evaluate therole and effects ofwarehousing and storageof goods on the efficiencyand effectiveness of theactivity Appropriate methodologies

for evaluating the cost andservice requirements whendesigning the internallayout of a stores orwarehouse

Major principles to beevaluated in anywarehouse or stores

The different types ofdesign and theirassociated advantages ordisadvantages

Single and multiple storeybuildings and their costeffectiveness in differentsituations.

3.2 Assess the different typesof warehouses andequipment available

The different types ofwarehouses and stores tobe found in differentorganisations

Manufacturing versusservice

Push/pull environments Public versus private sector The use of different types

of storage and handlingequipment found in astores and warehousingenvironment

Methods for increasing theuse of space in such areas

How to evaluate costimplications in the use ofdifferent types of storageand handling equipment

The use of Pareto analysisand stock-turn with respect

to stock management.

3.3 Evaluate different types ofcoding systems The different types of

coding systems to be foundin a stores environment: Significant Sequential

Methodology that could beused to introduce a newcoding system

The benefits and problemslikely to be associated withdifferent coding systems

The role for bar coding andthe benefits likely toaccrue from itsdevelopment.

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3.4 Assess the methods usedin the introduction of newitems and the handling of

obsolete and redundantstock The introduction of new

items and the importanceof management in thisarea

How obsolete andredundant stock is likely tocause difficulties andmethods that could beused to minimise suchproblems

The need for improvedcommunications to reducesuch problems

The use of managementinformation systems thatcan be used to help controlthe problems associatedwith new introductions,obsolete and redundant

stock.

3.5 Propose methods forhandling customer returnsand reverse logistics

The issue of handlingcustomer returns indifferent environments

How the problem ofcustomer returns might beexamined and improved

The concept of reverselogistics

Improvements that couldbe made in the area ofreverse logistics

How KPIs could beestablished in this area.

3.6 Evaluate methods formanaging unit loads,pallets, cages and toteboxes Terms associated with

managing unit loads:pallets, roll cages, tote

boxes and their uses The problems associated

with the management ofthese

How improvements inefficiency in these areascan improve corporateprofitability.

3.7 Appraise and evaluateinventory control systemsfor independent and

dependent demand Definitions of independent

and dependent demand Fixed order point Periodic review The impact of inventory

control systems on storageand distribution.

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4.0 CONTROLLING STORAGEAND DISTRIBUTION,INCLUDING LEGAL

ASPECTS(Weighting 30%)

4.1 Examine and analysemethods for improvingsecurity in the area Different security

measures that could beused in the area

The effectiveness ofdifferent systems

Methodologies that couldbe used to improveefficiency andeffectiveness

How improvementsbetween internal andexternal customers canreduce security problems.

4.2 Establish systems for

controlling and managingstorage and distributionactivity The use of different

systems established tocontrol and manage theactivity

The need for an integratedcomputer system

The need for systems that

allow management byobjectives andmanagement by exception.

4.3 Establish performancecriteria for controllingstorage and distribution

Major performancecriteria: Service levels Utilisation Performance ratios Comparative ratios Benchmarking

Evaluating cho

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