Diploma In Procurement And Supply - CIPS

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Diploma in procurementand supplyUnit content guideLeading global excellence in procurement and supply

Diploma in procurement and supplyIntroductionThe Chartered Institute of Procurement & Supplyqualifications ladder has five levels of awards. Fordetails of the entry requirements for each level,please refer to www.cips.orgThe CIPS Diploma in procurement and supply is ahigher level qualification. It has been accredited bythe Office of Qualifications and ExaminationsRegulator (Ofqual) in the UK and appears on theRegister of Regulated Qualifications. Please refer tohttp://register.ofqual.gov.ukThe Diploma in procurement and supply consists offive compulsory units. Assessment for each unit isby examination. If you wish to study for theDiploma, the Total Qualification Time (TQT) will be600 hours. The TQT indicates the overall number ofguided learning hours, additional self-study andassessment time that is required. It is expected thatyou will undertake 50 guided learning hours perunit, i.e. a total of 250 guided learning hours. Thedefinition of guided learning hours is: ‘A measure ofthe amount of input time required to achieve thequalification. This includes lectures, tutorials andpracticals, as well as supervised study in, forexample, learning centres and workshops. If youstudy at a CIPS study centre, you will find that theymay vary on the exact format for delivery of thestudy programme.Additionally, we would recommend that you alsocommit to at least 70 hours of self-study, per unit,including wider reading of the subject areas andrevision to give yourself the best preparation forsuccessfully achieving the certificate, the 3 hourassessment time, per unit, will be included withinthis.All the units in CIPS qualifications are assessed byan examination.We hold three examination series each yeararound the world, with an additional two seriescurrently available in some countries. You can findmore information on assessment, exam timetables,a list of exam centres and fees, exam resources andexemplar exam paper requirements atcips.org/qualificationsBelow is a list of the units, their qualificationframework reference numbers and CIPS referencecode which is used to identify the unit forassessment purposes.Diploma in procurement and supplyQualification number: 600/6858/9Unit Title:Contexts of procurement and supplyBusiness needs in procurement and supplySourcing in procurement and supplyNegotiating and contracting in procurement and supplyManaging contracts and relationships in procurement and supply02CIPS ReferenceD1D2D3D4D5StudentZoneMake the most of yourvaluable study time byaccessing this dedicatedresource to help you onyour learning journeywww.cips.org/student-zone

Diploma in procurement and supplyGlossary ofqualification termsAssessmentAssessment is the way in which CIPS willmeasure whether a learner is able todemonstrate their knowledge, understandingand be able to apply their learning in a givensituation.Assessment criteriaAssessment criteria specifies the standard that alearner is expected to meet to demonstrate thatthe learning outcomes of a unit have beenachieved.Business essentialsThese are commonly occurring themes throughthe qualifications, that do not warrant a unit intheir own right, but that are importantholistically to the learning undertaken withinthe qualifications: leadership business finance information technology management strategy legislationCommand wordsCommand words are generally verbs that areused to indicate the level of learningundertaken. They tend to be hierarchical innature. For example, when studying towardsthe diploma a command word could be ‘explain’or ‘assess’, whereas a command word for theprofessional diploma might be ‘critically assess’,or ‘critically evaluate’. These words reflect thelevel of complexity of your learning andultimately your assessment at that level.Compulsory unitsThese are units that constitute necessaryknowledge and understanding to fulfil learningrequirements for CIPS qualifications.Entry levelThis is the point at which you will enter the CIPSqualifications ladder. This entry will be based onpre-requisite knowledge, understanding andexperience.ExemptionsLearners who have successfully completedother relevant qualifications may apply forexemptions from equivalent CIPS units in theirprogramme of study. To earn an exemptionfrom a qualification or specific units within CIPSqualifications you should contact CIPS or seewww.cips.orgPlease note that gaining an exemption, does notmean that you gain an exit award at that level,rather that you bypass that level of learningbecause of equivalent learning andachievement gained elsewhere.03

Diploma in procurement and supplyExit awardAn exit award is in essence a qualification. CIPShas five exit awards in total Certificate in procurement and supplyoperations Advanced certificate in procurement andsupply operations Diploma in procurement and supply Advanced diploma in procurement and supply Professional diploma in procurement andsupplyFor each qualification you successfully complete,you will receive a certificate of achievementconfirming your exit award.Indicative contentThe indicative content is an indication of theknowledge required in order to fulfil theassessment criteria to achieve the learningoutcome.Learning outcomeThe learning outcome within a unit sets outwhat a learner is expected to know, understand,or be able to do as a result of a process oflearning.Optional unitsThese are units where you have choices tospecialise in an area of interest. There is anopportunity to select two optional units atadvanced diploma and two optional units atprofessional diploma.Qualifications ladderThis ladder represents the hierarchical natureof CIPS qualifications. The ladder has five stepswithin it. It starts with a Certificate through tothe Professional Diploma. Each step of the04ladder is represented by a qualification with an‘exit award’.RegulatorsCIPS is recognised as an awarding body by Ofqualin England, Ofqual regulates qualifications,examinations and assessments. CIPS is alsorecognised by Qualifications Wales in Wales andCCEA in Northern Ireland. It is their duty toensure all learners get the results they deserveand that their qualifications are correctly valuedand understood, now and in the future.UnitA segment of learning within the CIPSqualifications. Each unit is individual, has itsown title, rationale and content. A unit will alsohave an assessment attached to it in order todemonstrate achievement and conclusion ofthe learning.Unit purpose and aimsUnit aims provide additional information aboutthe unit; a succinct statement summarises thelearning outcomes of the unit.Each unit has four to five learning outcomeswhich outline what will be achieved as a resultof learning in that particular unit.WeightingsEach unit has a number of learning outcomesthat are equally weighted for example:If a unit that has four learning outcomestotalling 100%, each learning outcome will beequally weighted ie 25%(100% divided by 4 25%).This weighting indicates the level of input andlearning required by the study centre and thelearner in order to complete the subject area.

Diploma in procurement and supplyDefinition of additionalterms used in this guideERP Enterprise Resource PlanningEnterprise Resource Planning (ERP) System: Aclass of software for planning and managing"enterprise-wide" the resources needed to takecustomer orders, ship them, account for themand replenish all needed goods according tocustomer orders and forecasts. Often includeselectronic commerce with suppliers. Examplesof ERP systems are the application suites fromSAP, Oracle, PeopleSoft and others.FIDIC Fédération Internationale DesIngénieurs-Conseils (French for) InternationalFederation of Consulting EngineersFIDIC is the International Federation ofConsulting Engineers known for its range ofstandard conditions of contract for theconstruction, plant and design industries. TheFIDIC forms are the most widely used forms ofcontract internationally, including by the WorldBank for its projects.IMechIE Institution of MechanicalIncorporated EngineersThe Institution of Mechanical IncorporatedEngineers and the Institution of Engineeringand Technology issue model forms and guidesfor the industry. These include forms of tender,agreement and performance bonds.IncotermsInternational commercial terms of saledeveloped by the International Chamber ofCommerce to define sellers’ and buyers’responsibilities.KPIs Key performance IndicatorsAlso known as key success indicators. They arefinancial and non-financial metrics used toreflect the critical success factors of anorganisation or contract. They are used inbusiness intelligence to assess the present stateof business or a contract and to prescribe thenext course of action.Macro economicsMajor external and uncontrollable factors thatinfluence an organisation's decision making,and affect its performance and strategies. Thesefactors include the economic, demographics,legal, political, and social conditions,technological changes, and natural forces.Factors that influence a company's or product'sdevelopment but that are outside thecompany's control. For example, the macroenvironment could include competitors,changes in interest rates, changes in culturaltastes, or government regulations.05

Diploma in procurement and supplyMicro economicsFactors or elements in an organisation'simmediate area of operations that affect itsperformance and decision-making freedom.These factors include competitors, customers,distribution channels, suppliers, and the generalpublic.NEC The new engineering contractThe New Engineering Contract of which theEngineering and Construction Contract (ECC)forms a part, is a suite of standard formconstruction contracts created by theInstitution of Civil Engineers.Not for profit or third sectorThese are voluntary and communityorganisations such as charities and also socialenterprises (social enterprises have social orenvironmental purposes as central to what theydo). They are profit making but rather thanmaximising shareholder value their main aim isto generate profit to further their social andenvironmental goals.06P2P Purchase to payRefers to the business process that coveractivities of requesting, purchasing, receiving,paying for and accounting for goods andservices.SMEs Small and medium sized enterprisesA small firm is an independent business,managed by its owner or part-owners and withless than 50 employees. A medium sizedcompany must meet thresholds for annualturnover and have fewer than 250 employees.STEEPLE Social, Technological, Economic,Environmental, Political, Legal, Ethical (orInternational)An analytical tool extending PEST to alsoinclude, Environmental, Legal and Ethical (orInternational) factors that can impact onprocurement and supply.The Vienna ConventionThe United Nations Convention on Contractsfor the International Sale of Goods provides auniform text of law for international sales ofgoods.

Diploma in procurement and supplyCREDIT VALUE 12On completion of thisunit, candidates will beable to:A) Offer advice andguidance to mainstakeholders on theapplication of thesourcing processB) Understand supplychains whichorganisationsoperate in.Contexts ofprocurement and supplyLEARNINg OUTCOMES1.0Understand the added value that can be achieved through procurement and supply chainmanagement1.1Explain the categories of spend that an organisation may purchase Definitions of procurement and purchasing and supply Typical breakdown of organisational costs represented by procurements of goods, servicesor constructional works Stock and non-stock procurements Direct and indirect procurements Capital purchases and operational expenditures Services procurements1.2Analyse the different sources of added value in procurement and supply The five rights of procurement Achieving the right price for procurements from external suppliers Defining total life cycle costs or the total costs of ownership Achieving quality, timescales, quantities and place considerations in procurements fromexternal suppliers Other sources of added value such as innovation, sustainability and market development Defining value for money1.3Compare the concepts of procurement and supply chain management Definitions of procurement, supply chains, supply chain management and supply chainnetworks The length of a supply chain Definitions of logistics and materials management Comparisons of supply chain management with procurement07

Diploma in procurement and supply1.4Differentiate the stakeholders that a procurement or supply chain function may have Defining stakeholders Examples of stakeholders for a procurement or supply chain function Mapping stakeholders for a procurement or supply chain function2.0Understand the stages of sourcing processes in creating added value outcomes that can beachieved with suppliers2.1Explain the main aspects of sourcing processes Defining the stages of a generic sourcing process from identification of needs to contractand supplier management Analysis and planning, tender management and contract management Differentiating between pre contract award and post contract award stages2.2Analyse the main stages of a sourcing process Stages of the sourcing process that relate to defining needs, creation of contract terms,supplier selection, contract award and contract or supplier management The purpose and added value that is created by each of the stages of the sourcing process2.3Explain how electronic systems can be used at different stages of the sourcing process Erequisitioning, ecatalogues, eordering, esourcing and epayment technologies The impact of electronic purchase to pay (P2P) systems on the sourcing process2.4Analyse the relationship between achieving compliance with processes and theachievement of outcomes Organisational needs for structured sourcing processes The relationship between process compliance and the achievement of added valueoutcomes3.0Understand the main aspects of organisational infrastructure that shape the scope of aprocurement or supply chain function3.1Explain the main aspects of corporate governance of a procurement or supply chainfunction Conflicts of interest The need for documented policies and procedures for procurement Organisational accountability and reporting for procurement roles and functions The status of procurement and supply chain management within organisations Codes of ethics in procurement The CIPS code of ethics08

Diploma in procurement and supply3.2Analyse the impact of organisational policies and procedures on procurement Aspects that can be included in procedures for procurement and supply such asresponsibilities for procurement, regulations relating to competition, levels of delegatedauthority, responsibilities for the stages of the sourcing process, invoice clearance andpayment The use of procurement policies, procurement strategies and procurement manuals The involvement of internal functions and personnel in the sourcing process Responsible purchasing and the International Labour Organisation core conventions3.3Compare the different structures of a procurement or supply chain function The use of centralised and devolved structures Hybrid structures of a procurement or supply chain function (such as consortiumstructures, shared services, lead buyer structures, and outsourced) Interacting with otherpeople and building rapport The need for customer service and value for money outcomes3.4Explain the common IT systems that can be used by a procurement or supply chain function P2P systems Systems for inventory management Enterprise Resource Planning (ERP) technologies Communications systems for internal and external use4.0Understand the need for compliance with requirements when undertaking procurementactivities in different sectors4.1Identify different economic and industrial sectors Economic classifications including public and private sectors, charities, not for profit andthird sector Industrial classifications and sectors such as manufacturing, retail, construction, financial,agriculture and service Codes of ethics in procurement including the CIPS Code of Ethics4.2Analyse the impact of the public sector on procurement or supply chain roles Objectives of public sector organisations such as improving services, communities andcorporate social responsibility Regulations that impact on procurement and supply chain operations Need for competition, public accountability and value for money09

Diploma in procurement and supply4.3Analyse the impact of the private sector on procurement or supply chain roles Objectives of private sector organisations such as profitability, market share, shareholdervalue and corporate social responsibility Regulations that impact on procurement and supply chain operations The importance and role of branding4.4Analyse the impact of the not for profit or third sector on procurement or supply chain roles Objectives of the not for profit or third sector Regulations impacting on charities Need for regulated procurement exercises10

Diploma in procurement and supplyCREDIT VALUE 12On completion of thisunit, candidates willunderstand practices thathelp achieve value formoney solutions inprocurement.This unit explores avariety of elements thatunderpin thedevelopment of criteria. Italso considers the optionsthat should be exploredwhen procurement andsupply personnel areinvolved in definingrequirements.Business needs inprocurement and supplyLEARNINg OUTCOMES1.0Understand how to devise a business case for requirements to be sourced from externalsuppliers1.1Analyse how business needs influence procurement decisions Type of purchase such as new purchase, modified re-buy, straight re-buy Implications of the business needs on the types of procurement Procurement’s role in developing a business case1.2Explain how costs and prices can be estimated for procurement activities Types of market data that can provide information on costs and prices Direct and indirect costs Producing estimated costs and budgets Approaches to total costs of ownership/ total life cycle costing1.3Explain the criteria that can be applied in the creation of a business case Examples of criteria typically applied in the production of a business case: costs, benefits,options, alignment with organisational needs and timescales Benchmarking requirements1.4Explain the operation of financial budgets for the control of procurements The purpose of financial budgets Cost entries and timings of cash flows Performance and control of budgets Dealing with variances to budget11

Diploma in procurement and supply2.0Understand the fundamentals of specifications and key performance indicators that areincluded in contractual arrangements made with suppliers2.1Assess different types of specifications used in procurements of products or services Definitions of specifications Examples of specifications such as drawings, samples, branded and technical Conformance based specifications Output or outcome based specifications2.2Explain the content of specifications for procurements Drafting specifications and developing market dialogue with suppliers The use of standards in specifications Typical sections of a specification Standardisation of requirements versus increasing the range of products Including social and environmental criteria in specifications The role of Information Assurance in developing specifications2.3Develop examples of key performance indicators (KPIs) in contractual agreements Defining contractual performance measures or KPIs The use of service level agreements Typical KPI measures to assess quality performance, timeliness, cost management,resources and delivery3.0Understand the main clauses that are included in formal contracts3.1Explain sources of contractual terms for contracts that are created with externalorganisations The use of express terms The use of standard terms of business by both p

details of the entry requirements for each level, please refer to www.cips.org The CIPS Diploma in procurement and supply is a higher level qualification. It has been accredited by . (100% divided by 4 25%). This weighting indicates the level o

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