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Scope and Influence of Procurement and Supply (L4M1)

We strongly recommend that you start this qualification at this module.

Module Purpose

On completion of this module, learners will be able to identify the key stakeholders through the application of the sourcing process, the analysis of the procurement cycle and the evaluation of the influence procurement and supply has as a source of added value for the organisation.

Module aim(s)

In any organisation, a significant proportion of costs are accounted for by the purchases of products and/or services, hence organisations see procurement and supply as a key contributor to their value-added strategies. Equally, any organisation will also be managing the supply of products and/or services to their customers, be they internal or those from other external organisations, consumers or the general public. This module is designed using the CIPS Procurement Cycle as its basis. It will provide those who are interested in developing an informed awareness of different perspectives or approaches within the discipline with an overview of the key stages and compliance requirements associated with procurement and supply. It will serve as an introduction for those who are expected to address complex well-defined procurement and supply problems that are non-routine in nature.

Next steps

Starting a CIPS qualification programme means you will join the largest institute in the world for those working in procurement and supply. You can join as a student member online today. Once joined you can book your examinations online

Key Module Details

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Learning outcomes, assessment criteria and indicative content

1.1 Compare the concepts of procurement and supply chain management

1.1.1Definitions of procurement, supply chains, supply chain management and supply chain networks
1.1.2Compare the role and function of supply chain management with procurement
1.1.3Definition and function of supply chain tiering
1.1.4Definition and issues related to complex supply chains
1.1.5Definitions of logistics and materials management
1.1.6Definitions of waste management and closed-loop recycling

1.2 Analyse the different sources of added value in procurement and supply

1.2.1The five rights of procurement
1.2.2Defining total life cycle costs or whole-life asset management
1.2.3Achieving five rights of procurement from external suppliers
1.2.4Other sources of added value: innovation, sustainability and market development
1.2.5Defining value for money

1.3 Describe the categories of spend that an organisation may purchase

1.3.1Typical breakdown of organisational costs represented by procurement of goods, services and constructional works
1.3.2Stock and non-stock procurement
1.3.3Direct and indirect procurement
1.3.4Capital purchases and operational expenditures
1.3.5Services procurements
1.3.6Utility procurement
1.3.7Commodity procurement

1.4 Differentiate the stakeholders of procurement or supply chain functions

1.4.1Definition of stakeholders
1.4.2Examples of stakeholders of a procurement and supply chain function
1.4.3Mapping stakeholders for a procurement and supply chain function

2.1 Explain each stage of the CIPS Procurement Cycle

2.1.1CIPS Procurement Cycle: pre-contract award stages (stages 1-8 of the CIPS Procurement Cycle) for generic procurement and supply activities
2.1.2CIPS Procurement Cycle: post-contract award stages (stages 9-13 of the CIPS Procurement Cycle) for generic procurement and supply activities

2.2 Analyse each stage of the CIPS Procurement Cycle in relation to adding value

2.2.1The purpose and added value created at each pre-contract award stage (stages 1-8) of the CIPS Procurement Cycle
2.2.2The purpose and added value created at each post-contract award stage (stages 9-13) of the CIPS Procurement Cycle

2.3 Explain how electronic systems can be used at different stages of the CIPS Procurement Cycle

2.3.1Definition and function of e-requisitions, e-catalogues, e-auctions, e-tendering and online supplier evaluation systems
2.3.2The application of electronic systems at each pre-contract award stage (stages 1-8) of the CIPS Procurement Cycle
2.3.3The application of electronic systems at each post-contract award stage (stages 9-13) of the CIPS Procurement Cycle

2.4 Analyse the relationship between policy and process compliance and required outcomes

2.4.1Organisational and contextual drivers for structured procurement and supply processes
2.4.2Understanding and balancing the relationship between policy and process compliance with securing added value and customer service outcomes in different contexts

3.1 Explain aspects of corporate governance impacting the procurement or supply chain function

3.1.1Conflicts of interest
3.1.2The need for documented policies and procedures for procurement
3.1.3Organisational accountability and reporting for procurement roles and functions
3.1.4Code of ethics in procurement and supply: CIPS Code of Ethics and ILO (International Labour Organization) core conventions
3.1.5The CIPS Code of Conduct

3.2 Analyse the impact of organisational policies and procedures on procurement and supply

3.2.1Topics included in procedures for procurement and supply: responsibilities for procurement, regulations relating to competition, levels of delegated authority, responsibilities for the stages of the sourcing process, invoice clearance and payment
3.2.2The use of procurement policies, procurement strategies and procurement manuals
3.2.3The involvement of internal functions and personnel in the procurement process

3.3 Examine the different structures of a procurement or supply chain function

3.3.1The role and status of procurement and supply chain management within different organisations
3.3.2The use of centralised and decentralised structures
3.3.3The use of hybrid structures in procurement and supply chain functions

3.4 Explain the common IT systems that can be used by a procurement or supply chain function

3.4.1P2P systems
3.4.2Systems for inventory management
3.4.3Enterprise resource planning (ERP)
3.4.4Communications systems for internal and external use
3.4.5Systems used to support e-sourcing, e-tendering and e-auctions

4.1 Classify different economic and industrial sectors

4.1.1Economic classifications including public and private sectors, charities, not-for-profit and third sector
4.1.2Industrial classifications and sectors such as manufacturing, retail, construction, financial, agriculture and service

4.2 Analyse the impact of the public sector on procurement and supply chain activities

4.2.1Objectives of public sector organisations: improving services, supporting communities and social value, and equality, diversity and inclusion
4.2.2Regulations that impact on procurement and supply chain operations
4.2.3Role of competition, public accountability and value for money in public sector procurement and supply activities

4.3 Examine the impact of the private sector on procurement or supply chain activities

4.3.1Objectives of private sector organisations: market share, shareholder value, environmental, social, governance and economic viability
4.3.2Regulations that impact on procurement and supply chain operations
4.3.3The importance and role of an organisation’s branding in procurement and supply activities

4.4 Examine the impact of the not-for-profit or third sector on procurement or supply chain activities

4.4.1Objectives and principles of the not-for-profit or third sector
4.4.2Regulations that impact on procurement and supply chain activities in charity and third sectors
4.4.3Need for procurement and supply activities to align with organisation context mission and objectives