All of the CIPS qualifications have been updated. Please see the new programme listing from the index page -- here --  

Overview - CIPS Qualifications

International Certificate

For Non-UK Students

International Advanced Certificate

For Non-UK Students

Level 3 Certificate

For UK Students only

Level 4 Foundation Diploma

Level 5 Advanced Diploma

Level 6 Graduate Diploma

Level 7 Executive Diploma

Entry Requirements

FAQs

CIPS - Transition

Glossary of Terms

Sample Study Schedule

UNIT CONTENT LEVEL 5 Advanced Diploma in Purchasing and Supply

The Advanced Diploma has five units but this award introduces options to the student. There are three core units and a choice of five optional units.

The units that make up the award are:

• L5-01 Management in the Purchasing Function
• L5-02 Risk Management and Supply Chain Vulnerability
• L5-03 Improving Supply Chain Performance (Integrative unit)

Plus two units chosen from the following

• L5-10 Marketing for Purchasers
• L5-11 Storage and Distribution

• L5-12 Operations Management in the Supply Chain

• L5-13 The Machinery of Government

• L5-14 Contracting in the Public Sector  Units 13 and 14 have recently been developed by CIPS for UK based students.

• L5-15 Sustainable Procurement

Detailed Syllabus

L5-01 MANAGEMENT IN THE PURCHASING FUNCTION (Compulsory Unit)

UNIT CHARACTERISTICS

This unit is designed to enable students to manage their own area of responsibility within an organisation’s internal supply chain, in line with the overall strategic business plan and the operational plan for the purchasing function.

Students should be able to implement operational plans for their own area of responsibility to achieve objectives set out in their plan. In doing so they should be able to employ a range of resources, including human, physical and financial resources, and manage and delegate tasks effectively.

This unit is about managing the expectations of the stakeholders that are directly involved in the student’s own
area of responsibility and will provide them with management techniques to help them to involve others, be innovative, consultative, influential and persuasive in order to achieve targets effectively.

LEARNING OUTCOMES

On completion of this unit, students will be able to:
• Evaluate the challenges facing managers in dynamic and changing organisations.
• Analyse the characteristics of different organisational structures and cultures.
• Use a range of techniques to support and implement justifiable management decisions.
• Formulate plans to effectively manage work groups and teams.
• Propose processes and systems to enable the successful implementation of change programmes to maximise purchasing efficiency and effectiveness.

LEARNING OBJECTIVES AND INDICATIVE CONTENT

1. The challenges of management. (Weighting 20%)

1.1 Define the term management and differentiate management from leadership.
• Definitions of management (Drucker & Brech)
• Management: planning, co-ordinating, controlling and motivating staff
• Management styles
• Leadership perspectives and styles

1.2 Establish the importance of stakeholder groups who directly impact upon the purchasing function and
manage their expectations effectively.
• Stakeholders: employees, customers, shareholders, suppliers, government, lenders
• Identifying and fulfilling stakeholder/customer needs
• Working within ethical codes of conduct and practise

1.3 Contrast the key roles and functions of managers in the purchasing and supply function.
• Ensuring best value/quality at the lowest price (purchaser)
• Advising and recommending suitable purchasing and supply systems
• Building good relationships within the purchasing and supply chain
• Management of resources (human, financial, materials, equipment) to be effective in role
• Policy development

1.4 Compare the diverse purchasing management practices of the private and public sectors.
• Tendering
• Recommended suppliers
• E-Commerce: Internet, E-Auctions, E-catalogues, EDI
• Outsourcing
• Authority levels (i.e. purchase orders)
• Relationship Building
• Payment terms and other contracting arrangements

1.5 Create a set of rules for ethical behaviour.
• What is ethics?
• CIPS ethical codes

1.6 Propose ways of reporting effectively to senior management and securing top level support and sponsorship for initiatives and implementation of plans.
• Keeping your stakeholders informed
• Building a business case
• Report writing: structure, content and making it
interesting
• Effective meetings
• Presenting your plans

2. Organisation structures and culture. (Weighting 20%)

2.1 Evaluate the importance of organisational structure.
• Rationale/background: industrial revolution to modern day
• Choice of different structures to aid management
• Organisational structures: conflicts between control and empowerment; autonomy and entrepreneurship
•Power

2.2 Evaluate the nature and scope of federal and network structures and the implications of such structures for
the purchasing function.
• Local
• Regional
• National
• International
• Global

2.3 Assess and evaluate methods of job design for purchasing roles.
• Identifying responsibilities, associated tasks and priorities
• Updating existing roles, via job description and person specification
• Training needs analysis
• Competency frameworks
• Role mapping

2.4 Define the term culture and assess different models of culture which may exist within organisations.
• Definitions/terms
• Behaviour, values and assumptions
• Organisational influences of company politics, power, bureaucracy, rules and standards of behaviour
• Models of cultural strength, masculine/feminine societies, cultural values and individualism/collectivism

2.5 Evaluate methods and formulate plans for managing effectively in international or cross-cultural organisations.
• Stages of planning
• Methods: managerial and leadership styles, approaches, communication and media channels
• Evaluation process of research (primary and secondary), conducting pilot schemes, gathering feedback from staff and choosing most successful option
• Considerations: cultural diversity, existing structures, codes of conduct, differing goals and expectations
• Stages of planning

3.0 Management decision making. (Weighting 15%)

3.1 Evaluate and apply a range of tools to make effective management choices and decisions.
• Problem and decision making process
• Pareto Analysis, Ishikawa (fishbone) diagram, SWOT, decision making trees, cost/benefit analysis, risk
evaluation, paired comparison analysis
• Balanced scorecard

3.2 Formulate, implement and monitor operational plans for the purchasing and supply function to achieve
organisational objectives.
• Aligning plans with strategic objectives/direction of organisation
• Agreeing objectives and targets: reducing defects, improving lead times, reducing costs
• SMART principles
• Importance of and ways to involve the team in the planning process
• Monitoring systems and processes including annual and periodic reviews
• Reporting structures

3.3 Assess and deploy the resource requirements for the implementation of operational plans for the purchasing
function.
• People as a resource
• Financial resources
• Physical resources
• Time

4.0 Managing work groups and teams. (Weighting 25%)

4.1 Evaluate the concept of authority, delegation and accountability when managing the purchasing function.
• Understanding of key concepts: taking ownership, decision making, empowerment and responsibility
• Reasons: workload, prioritising, developing individuals and the team, minimising blame and achieving results
• Good time management
• The delegation process

4.2 Apply techniques for building, motivating and managing successful teams within the purchasing and supply
function.
• What is a team/group?
• Stages of team development
• Team Roles
• Building a balanced team
• Motivational determinants: innate drive, desire, fulfilling need
• Satisfying individual and team needs: praise, rewards, recognition, responsibility, promotion, pay
• Building relationships through leadership, with trust, fairness, equal opportunities, ethics and respect

4.3 Manage the sources of conflict which may arise within 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 issues

4.4 Manage the lack of integration with the rest of the business, and the perception that purchasing is seen as a
process function involved in product design and capital specifications.

4.5 Apply techniques to deal with conflict within teams and between individuals in the purchasing and supply
functions.
• Consultation
• Mediation
• Negotiation
• Arbitration

4.6 Assess the benefits of a systematic approach to recruitment, appraisal, training and development.
• High calibre of staff
• Recognition of achievement
• Identification of development needs
• Providing appropriate training to meet individuals’ role needs
• Retention
• Contented workforce
• Maintaining high levels of performance

5. Managing change. (Weighting 20%)

5.1 Evaluate the causes of organisational change.
• Globalisation
• Competition
• Growth
• Diversification
• Performance
• Technology
• Practical analysis using PESTLE, SWOT and Lewin’s model: forces for change

5.2 Differentiate between the need for fundamental and incremental change in organisations.
• Sector characteristics and dynamics
• Take-overs, mergers and embracing cultural changes
• Response to market demand
• Quality and continuous improvement
• Meeting customer requirements

5.3 Formulate plans to overcome human resistance to change and to implement change successfully within the
purchasing and supply function.
• Psychological barriers
• Physical barriers
• Achieving commitment from staff
• Staff involvement
• Devolving responsibility
• Monitoring results

5.4 Assess the importance of changes in employment and equal opportunities legislation on organisations.
• Equal Pay Act 1970
• Employment Act 2000 including TUPE
• Health and Safety at Work Act 1974
• Freedom of Information Act
• EU Employment Directives
• Disability Discrimination Act (1995)
• Age Discrimination

5.5 Evaluate the impact of e-commerce and technology on the management of organisations and people, and in
particular the benefit to the purchasing function.
• Intranet
• Knowledge management systems
• MIS/MkIS systems
• Flexible working arrangements
• Telecommunications
• E-sourcing
• E-procurement

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L5-02 RISK MANAGEMENT AND SUPPLY CHAIN VULNERABILITY (Compulsory Unit)

UNIT CHARACTERISTICS

This unit is designed to enable students to undertake risk analysis and a variety of risk assessments relating to different aspects of purchasing and supply and to implement a range of appropriate risk management tools and techniques.

Students will use a variety of risk assessment tools and techniques designed to provide a detailed analysis of supply chain situations, including legal, corporate social responsibility, ethical, health and safety, financial, international, innovation and a variety of other potential risk scenarios. The scope covers both the proactive identification and avoidance of risk, as well as provision for post-event recovery initiatives.

By the end of the unit students should be able to apply a variety of tools and techniques, in a diverse range of
contexts, to proactively establish the level of risk presented and to recommend ways of avoiding, mitigating or managing those risks.

LEARNING OUTCOMES

On completion of this unit, students will be able to:
• Analyse the nature and scope of risks for the organisation
• Assess the sources of risks and the likely impact of those risks upon the organisation
• Plan and implement an appropriate risk management process in order to protect the organisation’s interests
• Explain how supplier appraisals, pre-qualification of suppliers and contract monitoring can help to mitigate
risks
• Develop systems for testing risks and monitoring them accordingly
• Apply risk management principles to various purchasing and supply management scenarios
• Apply a range of techniques to mitigate risk proactively and to reduce the consequential losses in the instance of a risk event occurring

LEARNING OBJECTIVES AND INDICATIVE CONTENT

1. Understanding the nature of risk in purchasing and supply (Weighting 25%)

1.1 Define the terminology used in risk assessment and management.
• Define risk
• How risk has a direct impact on an organisation’s success and how risk can be directly related to cost
• Key terms: hazard, risk, risk event, exposure, loss -direct, indirect and consequential - mitigation,
avoidance, assessment, management, force majeure and acts of God
• The differences between risk, vulnerability, exposure and loss, as well as understanding the range of management actions available
• What is meant by a risk appetite and use of practical examples to show how this applied

1.2 Distinguish between direct physical loss (e.g. disrupted supply) and indirect consequential loss (e.g. reputation).

• Key types of loss that may occur: financial, reputational, environmental, health, safety, welfare and lost opportunities

1.3 Analyse potential sources of risk to organisations of both internal and external origin.
• Internal and external hazards and risks
• Range of risks that might occur within the workplace
• Range of risks that might occur within the external environment: including political, economic, social,
technological, legislative, environmental (PESTLE), supply chain and international
• The likely impact on the organisation and its appetite for risk

• Basic quantification methods for measuring

1.4 Using appropriate segmentation tools, understand the essential characteristics of different sources of supply
(e.g. Kraljic) and identify sources of supply chain vulnerability and/or supply failure, in particular among critical supply markets, supplier organisations and their own supply chains.

• Segmentation tools to help assess and manage supply chain risk appropriately (e.g. Kraljic)
• How you would take a different approach to purchasing from a critical or bottleneck market to that of a leveraged or acquisition market
• Define supply chain vulnerability, supply failure and supplier failure

• Map a typical supply chain and identify potential sources of supply vulnerability

• The potential impact of supply and supplier failure
• Range of mitigating activities that a purchaser could use when looking to protect against supply or supplier failure

1.5 Distinguish between strategic, operational and project based areas of risk.
• Provide examples to help define risk at the strategic, operational and/or project-based level
• Range of risk mitigation methods at each level
• How risk can be bounded and also how, if unmanaged, it can have knock-on consequential impacts on other areas of an organisation

1.6 Evaluate the role of an organisation’s stakeholders in risk management.
• The roles and responsibilities of an organisation’s risk function in relation to other functional areas
• The impact of a risk event at the functional level
• The benefits of a cross-functional team when assessing, preventing and minimising risk
• The role of purchasing to mitigate against potential losses to the whole organisation from risk events

• The merits of taking a consistent approach across the organisation to the assessment of risk

1.7 Demonstrate how effective risk management can have positive benefits for organisations by reducing exposure to uncertainty.
• Reduction in levels of threat
• Higher risk opportunities being successfully pursued or mitigated
• Successful anticipation of shocks or other risk events
• Crises being avoided or mitigated
• Successful application of contingency or business continuity plans
• Disaster recovery planning and implementation
• Limited or no reputational or public relations damage
• Securing supply and mitigation of supply chain vulnerability
• Improved decision and policy making
• Increased customer and stakeholder satisfaction

• Improved organisational co-ordination with service and delivery partners

1.8 Assess risks involved with using technology, including:
• Reliance on technology
• Security
• Hackers
• Fraud
• Storing of vital documents and material

2. Risk management processes and structures (Weighting 25%)

2.1 Propose policies, objectives and appropriate content for a risk management strategy.
• Describe an appropriate risk policy
• How an organisation’s appetite for risk may affect the risk policy
• Outline the purpose of a risk management strategy and a risk management framework

• The key components of a risk management strategy

• The key implications of the Turnbull report

2.2 Formulate a risk management process that addresses risk identification, risk analysis, risk evaluation, risk treatment and risk reporting in the context of an organisation’s strategic objectives and a dynamic external environment.
• Key stages of a risk management process
• Methods for identifying, assessing and quantifying risks
• Classification of risk within the organisational context
• A risk report and the role of a board risk committee

• How identified risks should be monitored and reviewed

2.3 Evaluate the probability of a risk occurring in particular circumstances, the possible consequences and the
potential range of mitigating actions required.
• Define probability in relation to the occurrence of a risk event
• How the likelihood of a risk occurrence will affect the approach to risk management
• Apply the use of historic statistical data in predicting the likelihood of future risk occurrences

• Identify a range of operational risks and assign a probability to each one
• Using the above, prioritise key risks and explain how resources might be allocated appropriately to mitigate them

2.4 Analyse the resources required for effective risk management and for building a risk aware culture within
organisations.
• Responsibility of everyone in an organisation
• Define risk awareness and the benefits of awareness
• Describe an appropriate communication programme to promote risk awareness
• How different functions can work together to reduce risk
• Promotion of a risk awareness culture among key elements of the supplier base

• How suppliers can assist in the promotion of risk awareness

2.5 Propose ways in which third party supplier resources are used to reduce risk and mitigate losses during a risk
event.
• Range of supply solutions for mitigating losses in the aftermath of a risk event including insurance, loss
adjusting, alternative accommodation, disaster recovery plus restoration and recovery services
• Appropriate methods of purchasing and paying for disaster recovery services both during a risk event
and in the normal run of business
• Identify key incentives to retain specialist services at times of national disaster, including flood and

hurricane damage

2.6 Develop an appropriate risk register for the purchasing and supply function, together with procedures for
monitoring and managing the key risks identified.
• Define a risk register and describe the benefits of having one
• Outline key components of a risk register
• The process of maintaining and reviewing a risk register

• Design a basic risk register for the purchasing and supply function

2.7 Appraise insurance as a financial means of risk protection, together with the relative merits of captive
self-insurance.
• The insurance service including the role of the broker and the insurer
• How insurers use the re-insurance market to spread their risk
• The key stages to resolve a claims event
• Define captive insurance and describe how in practice this might work

• The merits of an organisation self-insuring and the types of risk that this might include

2.8 Apply a range of qualitative and quantitative risk identification and analysis techniques including:
• Scenario analysis and planning
• Auditing
• Decision tree analysis
• Fault tree analysis
• Dependency modelling
• Political, economic, social, technological, legislative and environmental (PESTLE)
• Assumption
• Identification frameworks

3. Managing risk and supply chain vulnerability (Weighting 50%)

3.1 Analyse, evaluate and propose solutions to risks in the following situations:
• Supplier appraisal and selection
• Supplier financial stability, due diligence and credit risk
• Project failure (eg capital procurement – investment appraisal)
• International purchase contracts
• Implementation of new technologies
• Ethical and environmental policy formulation and implementation
• Corporate and social responsibility (CSR)
• Health and safety legislation
• Public sector procurement
• Negotiation

• Fraud and conflicts of interest

3.2 Develop, monitoring and control techniques for testing risk on an ongoing basis such as:
• Internal audits
• Interdepartmental exchanges
• External experts: including external auditors, risk consultants, security advisers, mystery shoppers, research companies and the police
• Use of benchmarking to assess and mitigate external risk
• Use of competitive intelligence

• Quality systems, Total Quality Management (TQM), quality inspection and quality control

3.3 Develop contingency plans designed to overcome risk situations, including business continuity planning and
disaster recovery planning.
• What is meant by a contingency plan
• The key components of a business continuity plan (BCP) and how, in practice, a business continuity plan is put into practice
• Key contingency measures used by a BCP: including telephone cascades, emergency and fire wardens, use
of IT systems to help co-ordinate activities, use of alternative accommodation and back-up information technology systems
• The benefits of business continuity planning from an operational, financial and reputational perspective

3.4 Appraise specific key risks and exposures in purchasing and supply, together with appropriate mitigating actions, including:
• Contractual failure, consequential loss and provision for remedies
• Supplier insolvency, monitoring and guarantees

• Quality failure, non-conformity and corrective action
• Project failure, project planning principles and corrective action
• Security of supply, contingency planning, stock holding and alternative sources of supply
• Technology failure, impact on supply, use of back-up systems and disaster recovery
• Security, theft and damage
• Fraud, accounting and payment exposures, conflicts of interest, purchasing ethics and codes of conduct
• Product liability, reputational damage, consumer confidence

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L5-03 IMPROVING SUPPLY CHAIN PERFORMANCE (Compulsory Integrative Core Unit)

UNIT CHARACTERISTICS

Achieving success within the supply chain involves a complex range of variables, which can frequently be
dependent on one another for the success of the supply chain.

This unit is designed to enable students to use a range of techniques and strategies to develop and improve supplier performance in order to achieve competitiveness, efficiency and profitability within the supply chain.
By the end of this unit, students will be able to measure and evaluate the effectiveness of supply chain performance.

They will be able to identify innovative development of systems to improve the performance of the supply chain,
and make justifiable recommendations for implementation in order to aid the effectiveness of the supply chain.

LEARNING OUTCOMES

On completion of this unit, students will be able to:
• Discuss the contribution technology can make to supply chain performance management
• Evaluate the organisational procedures and techniques that can be used in developing and improving supplier
performance, including the reduction of risk and the introduction of supplier innovations
• Set performance standards to which supply chain strategies should aspire
• Develop an integrated approach to the implementation of supply chain activities which are designed to maximise competitive advantage and reduce risk exposures
• Propose systems and techniques to achieve best practice and enhance customer service for all stakeholders
• Contrast different negotiation strategies and styles and their effectiveness in a given range of situations
• Use a variety of support tools available and apply them in complex and high-level negotiations
• Understand the critical elements of supplier development and techniques to foster supply chain innovation
• Work together to support cross-functional key performance indicators and objectives (KPIs) and to measure performance

LEARNING OBJECTIVES AND INDICATIVE CONTENT

1. Developing and improving supplier performance (Weighting 30%)

1.1 Develop source-related activities so as to inform and provide value to other functional areas in the organisation, and in ways that support the overall objectives of the organisation.
• The business requirements for supply, and document in an appropriate way (specification, service level agreement (SLA) etc
• Cross-functional team-working skills to determine business requirements through appropriate stakeholder consultations
• The need to align supply chain activities to the organisational strategy, while maintaining a degree of flexibility to respond to changing needs
• The need for purchasing to provide customer service to other functional areas and identify appropriate tools and techniques to implement such service (e.g. engagement and consultation, regular management reporting, helpdesk solutions, consultative style)
• How purchasing, as a function, can add demonstrable value to the business, including cost reduction, risk mitigation, security of supply, enhanced service, improved quality and supplier innovations
• How purchasing can use its supply-market knowledge to assess and report risks, threats and/or supply chain vulnerabilities in an accurate and timely manner
• An appropriate communications programme that keeps other functional areas informed about purchasing-related activities and adds value to their own areas of responsibility

1.2 Employ appropriate key performance measures.
• The purpose of supplier key performance indicators (KPIs) in the improvement of supplier performance
• How a supplier KPI is developed and measured

• The need for base-lining existing performance prior to the development of supplier KPIs
• A range of potential supplier KPIs,, including price effectiveness, cost savings, service enhancements, quality measures and improvements, innovation and risk/compliance
• The implications of a supplier failing to meet KPIs and outline appropriate management controls that can be used to assist compliance (e.g. service credit/debit regimes, incentivisation and gain share models)
• Penalty clauses, liquidated damages, increased/decreased share of business etc

• How a supplier’s performance can be audited to ensure KPIs are accurately reported
• The various processes of benchmarking and explain how benchmarking can be used to generate stretching KPIs
• The term Balance Business Scorecard (Kaplan & Norton) and describe how this could be used in the purchasing environment
• How to draft a prospective balance business scorecard (BBS) to measure an on-going supply situation

1.3 Manage purchasing activities to influence the ability of an organisation to achieve its objectives.
• The benefits to the organisation of robust supplier selection and evaluation
• The range of appropriate supplier selection and evaluation techniques designed to achieve business requirements
• The methods of monitoring and measuring supplier performance
• Information on how purchasing can influence the quality delivered from suppliers
• How purchasing can contribute to an organisation’s approach to total quality management
• Process improvement models, such as Six Sigma, and how they can be used in a purchasing context to bring benefit to an organisation
• A typical purchasing planning cycle and how purchasing activities need to be aligned to plans adopted by the rest of the organisation
• How purchasing can contribute to fiscal planning activities
• Ways in which purchasing assists research and development by third party suppliers and collaborators
• How should vendors be rated to demonstrate a positive contribution to the business’ performance?
• How cross-functional teams can help purchasing deliver better results for a business

1.4 Develop and manage external contacts with the supply market to gain important information about new
technologies, potential new materials and services, new sources of supply and/or changes in market conditions
(specifically emerging risks and opportunities).
• Define the terms: innovation, market research, supplier analysis, market intelligence, competitive intelligence (and others)
• Define the term reverse engineering
• The process of supply market research/analysis
• How to develop an appropriate relationship with third party research and analysis organisations
• Business reasons to conduct supply market research
• Appropriate processes for testing and evaluating supply innovations

• The processes of benchmarking and how they can be used to gain market information
• The ways in which purchasing can contribute to production forecasts

1.5 Identify, evaluate and develop new and existing suppliers and use appropriate techniques to develop and improve supplier performance including:
• The processes and benefits of supplier appraisal and selection
• The processes and benefits of vendor rating and feedback
• The terms value analysis, value management and value engineering
• The ways in which suppliers can work with an organisation to improve productivity, efficiency and quality. The role of purchasing in facilitating these processes
• The meaning of supplier adoption. The process for adopting a new supplier and the key stages in implementation needed to switch supply
• The meaning of sunk and switching costs. Practical reasons why some organisations will not switch supply, despite potential benefits
• The process of trialing and piloting new innovations

• The follow-on processes required to implement a new supply innovation (including user acceptance and controlled roll-outs)
• How suppliers can be managed and developed to contain supply-related risks and reduce supply chain vulnerability

1.6 Devise appropriate supplier management organisational models in both the centralised and decentralised
purchasing function, and demonstrate how other functional areas might interact in these models:
• The meaning of single point of contact, and the benefits
• The relative merits of single point of contact versus multiple touch-points for managing supplier relationships effectively
• The prospective number of touch-points that a supplier might have within a client organisation and evaluation of the relative merits of a diverse supply relationship
• The role of purchasing as a facilitator of supplier relationships
• The purpose and potential benefits of a cross-functional approach to managing supplier relationships
• The role of executive sponsors of supplier relationships, and their responsibilities
• The decentralised purchasing function. The concept of a lead buyer how this might operate for different types of supply

1.7 Describe appropriate leadership styles to support supplier development:
• Key driving factors that will encourage a supplier to develop and improve the delivery of goods and services
• The relative merits of selling and telling
• Various types of supplier incentive and their relative merits
• How a gain share model works and potential problems with the concept
• Appropriate circumstances for purchasing to take a directive approach to supplier development and, similarly, those required for a facilitative approach
• The need for consistent measures of progress when developing suppliers
• The need for purchasing to communicate supplier development internally within an organisation

2. Maximising competitiveness (Weighting 30%)

2.1 Propose and manage systematic organisational efforts to create and maintain networks of competent suppliers, and to improve various supplier capabilities necessary for an organisation to meet increasingly competitive challenges:
• Why and how suppliers are segmented (e.g.ABC)
• The key characteristics of each segment of the supply base (e.g.Tier 1: strategic, high value-add, high
risk, innovative; Tier 2: regular purchases, medium-high value, framework agreements; Tier 3:
commodity items, one-off purchases, little relationship or value-add
• The need for a consistent supplier management process and some of the key components it might contain
• The benefits of supplier rationalisation

2.2 Develop, manage and maintain effective communications between an organisation and its suppliers to ensure that correct quality specifications are given to suppliers and subsequently delivered back to the business in measurable terms. To include early supplier involvement and risk transfer techniques:
• The process of cross-functional involvement in the development of a specification and the specific role for purchasing
• The meaning of the term early supplier involvement and the key benefits and potential drawbacks to an organisation
• Some of the key principles of communicating effectively to suppliers
• The benefits of supplier forums and supplier associations

2.3 Manage cost reduction for organisational efficiency and provide added value to customers:
• A typical purchase cost reduction programme and how such a programme is developed
• The benefits of volume (time and/or quantity) contracts and systems contracts
• The relative merits of stockless purchasing and just-in- time (J-I-T)
• How customer-driven supply chain innovations can be developed and the role of purchasing in creating and establishing effective supply
• The balance between cost efficiency and quality/risk issues

2.4 Plan and develop a well-structured approach to measuring the performance of suppliers including:
• The development of joint performance appraisal systems
• Use of cross-functional teams from both organisations to monitor, review and analyse results on a periodic basis
• The use of both quantitative and qualitative measures
• Use of 360-degree feedback
• Supplier business continuity plans

2.5 Compare and contrast – through purchasing research – different supply markets and conditions, and liaise
closely with logistics/suppliers to co-ordinate inbound logistics and associated materials flows:
• Benchmarking (as described in 1.2 and 1.4)
• The benefits of documenting the key steps in a supply chain process flow and typical ways in which this is achieved (e.g. iDEF)
• The role of business process re-engineering in improving the supply chain for inbound logistics and materials flow
• The process of lean supply and the arguments for and against (Lamming/Cox)

2.6 Appraise the benefits of automated processes and information flows and their impact on the supply chain
in terms of efficiency, productivity, quality improvement, cost reduction, payments and materials flow
management:
• The benefits of automated supply chain processes (reduced cost, improved communication, reduced error, reduced lead time, higher accuracy, greater quality, improved supplier relations, real-time information, reduced fraud, management information and feedback)
• The benefits of automated processes and the information gained from them for suppliers and their businesses
• How and why suppliers might choose to invest jointly with the purchaser in automation of the supply chain
• Extranets and how in practice they work with a supply base
• The benefits of automated purchase-to-pay systems

3.0 Advanced negotiations in the supply chain (Weighting 15%)

3.1 Compare, contrast and evaluate different negotiation strategies, styles and levels in different supply chain
contexts. (e.g. open and closed-book negotiation).
Formulate appropriate strategies for negotiation within and across the supply chain and to manage risk and
reward in the negotiation process:
• The basic tenets of the negotiation process and the key behaviours required to negotiate effectively in a
variety of purchasing contexts
• The need for teamwork in negotiation
• The role of trust in negotiation for both new and long-standing supplier relationships
• Open-book negotiations and their relative merits

3.2 Manage the negotiation process in line with organisational objectives and its relation to policy, general strategy and internal strategy for the purchasing and supply process:
• How a negotiation campaign is designed and developed and the key considerations required in doing so
• How the business requirements for supply need to be reflected in the detailed negotiation plan
• How corporate policy and/or organisational objectives may affect the negotiation plan in terms of behaviour, targets, timescales and/or scope
• Key ethical considerations when leading a negotiation

3.3 Plan and develop appropriate techniques for managing effective supplier relationships so as to foster trust and commitment in the negotiation process, including:
• The three definitions of trust (Sako)
• Development of inter-organisation relationships
• Buyer-supplier partnership agreements
• Development of a relationship charter
• The importance of ethics, integrity and values
• Escalation routes to resolve issues effectively

• The human factor within relationships

3.4 Explain advanced negotiation techniques, including:
• Transactional analysis
• Game theory
• Advanced non-verbal and psychological techniques for influencing

• Building and maintaining rapport
• Negotiating in the context of established long-term collaborative relationships

3.5 Discuss the role of negotiation to mitigate major contractual disputes and/or supplier relationship breakdown issues, including the use of contractual escalation clauses, the role of third party mediators and techniques for alternative dispute resolution:
• What is meant by dispute
• Identify a continuum of dispute resolution
techniques
• The process of mediation and the role of a mediator
• The relative merits of mediating with a supplier
• The range of third party intervention techniques to resolve disputes, such as conciliation, adjudication and arbitration
• The role of purchasing in resolving disputes

3.6 Describe the formation and co-ordination of a cross-functional negotiation team:
• The benefits of cross-function involvement in negotiations
• Appropriate roles and responsibilities within a negotiation team
• The role of purchasing and how it differs from other functional areas in the negotiation activity

4 Improving the efficiency and effectiveness of the supply chain (Weighting 25%)

4.1 Develop and implement appropriate information and knowledge sharing systems between purchasing departments and suppliers to provide benefits to both parties including:
• Reduced production cycle times
• Improved solutions to operational differences/difficulties
• Improved inter and intra-site communications
• Improved product development
• Reduced selling efforts
• Long-term security of the business
• Reduced risk exposure to supply chain failure

4.2 Identify the critical elements of supplier development:
• Respective roles and responsibilities of those involved in supplier development including those of executive sponsors
• The need for continuous improvement (Kaizen) and methods for achieving it (e.g. quality circles)
• The need for creating and fostering a team-working collaborative environment both internally and externally with the suppliers

• The role of innovation councils
• The relative merits of joint problem solving with suppliers
• Process improvement techniques such as quality circles, Six Sigma and business process re-engineering
• Gain share models for innovation and process improvement

• The meaning of breakthrough value creation and how this can be achieved in a supply chain context
• The need for policy creation and compliance

4.3 Appraise the application of technology to automate and streamline key operational processes within the supply chain (both internal and external to the organisation), including:
• Information flow and use of supply-side extranets
• E-sourcing and electronic ordering/payments: on-line catalogues, electronic point of sale (EPOS), electronic
fund transfer (EFT)
• Automated purchase-to-pay systems
• Automated payments, accounting and reconciliation
• Use of an extranet to include cross-functional representatives both internally and externally
• Reduction of fraud and payment error risks

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L5-10 MARKETING FOR PURCHASERS (Optional Unit)

UNIT CHARACTERISTICS

This unit is designed to provide students with an appreciation of the marketing concept, the role of marketing within an organisation, marketing’s relationship with purchasing and supply, and marketing’s contribution to the overall strategic plan.

Students will be introduced to marketing concepts, methods and techniques that are used to develop marketing plans with the ultimate aim of achieving customer satisfaction. These techniques may be applied to both not-for-profit and commercial organisations.

By the end of the unit students should be able to evaluate and apply marketing tools and techniques, in a range of contexts, to achieve customer satisfaction.

LEARNING OUTCOMES

On completion of this unit, students will be able to:
• Evaluate the impact of the marketing environment on marketing strategy
• Explain the role and contribution marketing makes to the organisation and the organisational strategy
• Apply the marketing research process and the target marketing process to gain an understanding of markets
• Apply the marketing mix to a range of organisations and markets and determine how the marketing mix elements may be integrated to achieve customer satisfaction
• Appraise the international marketing environment and evaluate its impact on international marketing strategy
• Formulate a marketing plan and apply the marketing planning and control process to a range of organisations
and markets

LEARNING OBJECTIVES AND INDICATIVE CONTENT

1.0 Marketing and the environment (Weighting 15%)

1.1 Define the term marketing and examine the concept of relationship marketing.
• Compare definitions of marketing
• Explain marketing as an organisational function, business concept and organisational philosophy
• Compare transactional and relationship marketing and explain the benefits of customer loyalty and retention

• Examine different approaches to marketing
• Examine the network of relationships essential within a relationship marketing programme
• Evaluate the role of internal marketing in achieving external customer satisfaction

1.2 Compare and evaluate organisational orientations.
• Compare production orientation, product orientation, sales orientation and marketing orientation

• Propose steps an organisation might take to achieve a marketing orientated approach

1.3 Evaluate the impact of marketing decisions on purchasing strategy and analyse the relationship between marketing and other business functions.
• Describe the role of marketing and the nature of relationships with other organisational functions
• Assess the impact of marketing mix decisions on other organisational functions
• Propose techniques to minimise conflict between functions within an organisation

1.4 Evaluate the impact of the micro environment, the stakeholder environment and the macro environment
on marketing decisions.
• Describe the environmental factors that affect an organisation’s ability to satisfy its customers
• Examine environmental trends and assess the impact of such trends on marketing strategy
• Discuss marketing techniques, including relationship marketing, for influencing the external environment

1.5 Assess the impact of information technology on marketing strategy.
• Examine the impact of e-media and other forms of electronic communication on marketing strategy
• Appraise the use of information systems on data management and marketing strategy

2.0 Understanding the market (Weighting 15%)

2.1 Apply the stages of the marketing research process.
• Explain and apply each stage of the marketing research process
• Develop research objectives
• Formulate a full research plan that details secondary sources of data, primary research techniques, data type and sample design
• Evaluate and apply techniques used for qualitative and quantitative data collection

2.2 Evaluate the impact of information technology on information management.
• Explain the components of a marketing information system and its relationship to marketing research
• Assess the role of database management techniques in achieving customer satisfaction
• Examine on-line research techniques

2.3 Compare organisational and consumer buying behaviour.
• Examine the characteristics associated with organisational and consumer markets
• Analyse the decision making process in each market
• Analyse influences on buyer behaviour in each market
• Explain the implications of buying behaviour on marketing strategy

2.4 Evaluate and apply the stages of the target marketing process to a variety of organisations and markets.
• Describe and evaluate the three stages of the target marketing process
• Evaluate and apply consumer and organisational segmentation bases
• Examine the benefits of segmentation and the characteristics of effective segments
• Explain how organisations evaluate segments and determine a target marketing strategy
• Discuss how positioning is used to achieve competitive advantage and apply the positioning concept to a range of organisations and markets

3.0 Marketing mix strategy (Weighting 40%)

3.1 Apply the three dimensions of a product to various types of organisation.
• Apply the core product, the actual product and the augmented product
• Describe the key strategic branding decisions and identify alternative branding strategies, including brand values
• Evaluate the use of branding and packaging in product management

3.2 Evaluate and apply recognised product portfolio management tools and explain the new product development process.
• Explain the purpose of product portfolio management and apply recognised tools of product portfolio marketing
• Examine the use of product portfolio tools in managing all elements of the marketing mix

• Explain and assess the new product development process and the impact of new product development on the purchasing and supply function
• Evaluate the role of test marketing within the new product development process

3.3 Compare product and services marketing.
• Explain the characteristics of services marketing and compare these with product marketing
• Apply the extended marketing mix in a range of situations

3.4 Evaluate and apply pricing objectives, strategies and tactics, and identify factors affecting the pricing decision in both consumer markets and organisational markets.

• Describe how pricing is developed as an integrated part of the marketing mix
• Explain the factors affecting the pricing decision
• Compare a range of pricing objectives
• Describe and evaluate the major strategies to price products throughout the product life cycle
• Explain the pricing tactics available within pricing strategy
• Discuss and appraise the tendering process in relation to organisational marketing

3.5 Examine the key decisions in distribution strategy including distribution objectives, channel selection, intermediary selection and the management of channels.
• Describe intensive, selective and exclusive distribution
• Evaluate various distribution channels and the functions that channel intermediaries perform
• Identify and discuss criteria that might be used to select distribution channels
• Explain how an organisation selects, motivates and manages channel intermediaries to achieve horizontal and vertical integration

• Evaluate the impact of information technology on distribution and explain the reasons for the growth in direct channels of distribution

3.6 Apply the stages of the promotional planning process to various types of organisations and markets.
• Explain how the promotional plan is co-ordinated with the marketing mix as part of the marketing plan
• Examine each stage of the promotional planning process
• Propose promotional objectives
• Define and apply the promotional mix and discuss the factors that should be considered in selecting a suitable promotional mix
• Compare each element of the promotional mix

• Evaluate a range of advertising media
• Evaluate techniques used to measure promotional effectiveness

3.7 Explain personalisation and discuss the impact of information technology on the capability of an organisation to customise the marketing mix and communication.
• Define personalisation
• Explain the benefits of personalisation to both the supplier and the customer
• Explain the role of information technology in achieving a personalised approach

3.8 Evaluate the developments in new technologies and electronic media and their impact on marketing and
promotional mix strategy.
• Discuss the trends and developments within direct marketing
• Evaluate the use of on-line marketing to achieve promotional objectives and encourage customer retention
• Examine the benefits of on-line marketing from a supplier and customer perspective

3.9 Determine how the marketing mix elements may be integrated to achieve customer satisfaction.
• Propose a marketing mix strategy for each stage of the product life cycle
• Explain how each element of the marketing mix is integrated to achieve marketing objectives

4.0 International marketing (Weighting 15%)

4.1 Respond to key developments in the world trading environment, including macro factors driving world trade and globalisation.
• Discuss the international trade system and identify the benefits of trading internationally
• Examine the macro-environmental factors affecting world trade
• Discuss the impact of regionalisation on world trade
• Explain the role of the World Trade Organisation in world trade

4.2 Evaluate the international marketing environment and explain barriers to international trade.
• Compare the macro environment in developed and developing nations and its impact on the international marketing mix
• Explain protectionism and its impact on the international marketing mix

4.3 Apply and evaluate international market entry strategies.
• Explain, apply and evaluate indirect exporting, direct exporting and direct investment strategies
• Examine criteria used to select suitable entry strategies
• Discuss techniques to manage distribution channels internationally

4.4 Assess factors affecting marketing mix strategy decisions in international markets.
• Explain alternative international marketing mix strategies
• Discuss factors affecting the international marketing mix strategy and develop an integrated international
marketing mix strategy

5.0 Marketing planning and control (Weighting 15%)

5.1 Formulate a marketing plan and apply each stage of the marketing planning and control process.
• Prepare a marketing plan
• Describe and apply each stage of the marketing planning and control process
• Assess the internal and external environment through a marketing audit
• Develop a SWOT analysis
• Formulate appropriate marketing objectives
• Apply the target marketing process within the marketing planning process
• Formulate an integrated marketing mix strategy and demonstrate how management and integration of marketing mix elements can be used to achieve marketing objectives
• Describe techniques to monitor and control the marketing plan
• Explain the role of marketing research throughout the marketing planning process
• Discuss the relationship between marketing planning and corporate planning

5.2 Evaluate and apply appropriate strategic management tools to develop the marketing plan.
• Evaluate and apply strategic management tools within the marketing audit
• Evaluate and apply strategic management tools to develop marketing objectives
• Evaluate and apply strategic management tools to develop an integrated marketing mix strategy

5.3 Evaluate the concept of customer relationship management and apply customer relationship management strategies in a variety of situations.
• Examine the benefits of customer loyalty and retention
• Define and evaluate the customer relationship management concept
• Explain and apply the stages of a customer relationship management strategy

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L5-11 STORES AND DISTRIBUTION (Optional Unit)

UNIT CHARACTERISTICS

This unit is concerned with helping students to identify the major areas of concern in effectively managing stores and distribution throughout the supply chain. It is essential that goods are moved through supply chains to customers at the right time, in the right condition, at the right place and at the right cost. Failure in any of these areas will add unnecessary costs to the ultimate customer while success will add value, and delight the customer.

It is essential that storage, distribution and general logistics are coordinated, both upstream and downstream, in order to reduce lead times, provide agility and reduce unnecessary costs. In order for this to happen it is essential that relationships, both internally and externally, are honed to the appropriate level.

To be effective, storage and distribution must fit in a seamless way to the total supply chain locally, nationally and globally.

LEARNING OUTCOMES

On completion of this unit, students will be able to:
• Evaluate the objectives and scope of stores and distribution in the supply chain
• Argue how the activity can meet its service and cost obligations while adding value
• Report the factors that strategically affect the design and organisation of a stores and distribution network
• Compare different transport modes, and decide whether to outsource transport or manage the activity in-house
• Report on the methodology needed for evaluating the cost and service requirements when designing the layout of stores and warehouses
• Evaluate the various types of storage and handling equipment, coding systems and returns procedure required in modern stores and warehouses
• Compare and evaluate various methods for controlling the activity in terms of security and achieving stated
performance criteria
• Evaluate and report on major legal areas of concern to stores and distribution
• Report on how and why ICT can improve the efficiency and effectiveness of the activity

LEARNING OBJECTIVES AND INDICATIVE CONTENT

1.0 Objectives and scope of stores and distribution (Weighting 15%)

1.1 Determine the scope and objectives of stores and distribution.
• The objectives of the activity
• The role of stores and distribution in a typical business environment
• The differences between roles the activity has in different organisations
• The network of relationships required for the activity to function effectively

1.2 Examine connections between distribution and stores and the supply chain.
• The total cost concept and the idea of sub-optimisation
• The total cost concept and why it is relevant
• The major areas that need to be evaluated in order to arrive at an optimal solution
• The cross-functional team-working skills that need to be developed to avoid sub-optimisation problems

1.3 Develop effective and measurable service standards.
• The concept of the term customer in stores and distribution environments
• Methods that could be used to improve the internal and external customer interface
• How to develop appropriate action plans to improve customer service
• The various measures of customer performance internally and externally
• The problems of cost of service levels versus benefits

1.4 Assess the concept of adding value in stores and distribution.
• The concept of adding value in the above context with appropriate illustration
• The role of other functions internally and externally in helping to add value to the activity
• Appropriate measurement criteria in this area

1.5 Analyse the problems associated with the area of service to cost trade-offs.
• The major cost and service parameters that need to be evaluated in the stores and distribution area
• Develop an appropriate method of appraising such a problem
• Examine environmental factors that could have an impact in this area

• Assess ways of quantifying costs and service in this area

2.0 Distribution planning and moving goods (Weighting 15%)

2.1 Evaluate the strategic factors affecting the choice of a storage and distribution network.
• Macro level factors affecting the choice of a storage and distribution network
• Major methods of storage
• The concept of a distribution network
• Current methodologies that could be used in this area to provide an optimal solution

2.2 Appraise the role of third party contractors and logistic service providers.
• How you would evaluate the use of third party contractors and logistic service providers
• Develop an appropriate action plan and methodology for such an exercise
• Appropriate key performance indicators (KPIs) in the selection process
• The internal-external interfaces that would need to be consulted in such an exercise and why
• Key stakeholders in this area

2.3 Appraise different transport modes.
• Differentiate between the various transport modes
• The characteristics and suitability for different consignments
• The concept of multi-modal transport and its advantages

2.4 Assess the importance of good transport routing and load planning.
• The factors that need to be considered in vehicle routing
• Major factors that must be considered in load planning
• Appropriate computer generated models that could be used to assist in the areas of routing and load planning
• How appropriate KPIs could be developed in this area
• Major KPIs that could be used in these areas

2.5 Assess the impact of UK import customs controls and risks associated with different INCOTERMS.
• The associated problems with UK import control
• How the risks can vary with imports depending on the Incoterm chosen

3.0 Warehousing and storage of goods (Weighting 20%)

3.1 Appraise the role and effects of warehousing and storage of goods on the efficiency and effectiveness of
the activity.

• Appropriate methodologies for evaluating the cost and service requirements when designing the internal layout of a stores or warehouse
• Major principles to be evaluated in any warehouse or stores
• The different types of design and their associated advantages or disadvantages
• Single and multiple storey buildings and their cost effectiveness in different situations

3.2 Assess the different types of warehouses and equipment available.
• The different types of warehouses and stores to be found in different organisations:
• manufacturing versus service
• push/pull environments
• public versus private sector
• The use of different types of storage and handling equipment found in a stores and warehousing environment
• Methods for increasing the use of space in such areas
• How to evaluate cost implications in the use of different types of storage and handling equipment
• The use of Pareto analysis and stock-turn with respect to stock management

3.3 Evaluate different types of coding systems.
• The different types of coding systems to be found in a stores environment:
• Significant
• Sequential
• Methodology that could be used to introduce a new coding system
• The benefits and problems likely to be associated with different coding systems
• The role for bar coding and the benefits likely to accrue from its development

3.4 Assess the methods used in the introduction of new items and the handling of obsolete and redundant stock.
• The introduction of new items and the importance of management in this area
• How obsolete and redundant stock it likely to cause difficulties and suggest methods that could be used to minimise such problems
• The need for improved communications to reduce such problems

• The use of management information systems that can be used to help control the problems associated with new introductions, obsolete and redundant stock

3.5 Propose methods for handling customer returns and reverse logistics.
• The issue of handling customer returns in different environments
• How the problem of customer returns might be examined and improved
• The concept of reverse logistics
• Examine a methodology that could be used for improvements in the area of reverse logistics
• How KPIs could be established in this area

3.6 Evaluate methods for managing unit loads, pallets, cages and tote boxes.
• Describe the terms: pallets, roll cages, tote boxes and their uses
• The problems associated with the management of these
• How improvements in efficiency in these areas can improve corporate profitability

4.0 Controlling stores and distribution, including legal aspects (Weighting 30%)

4.1 Examine methods for improving security in the area.

• Different security measures that could be used in the area
• The effectiveness of different systems
• Methodologies that could be used to improve efficiency and effectiveness
• How improvements between internal and external customers can reduce security problems

4.2 Establish systems for controlling and managing stores and distribution activity.
• The use of different systems established to control and manage the activity
• The need for an integrated computer system
• The need for systems that allow management by objectives and management by exception

4.3 Establish performance criteria.
• Major performance criteria:
- Service levels
- Utilisation
- Performance ratios
• Comparative ratios
• Benchmarking

• Evaluating chosen criteria with internal and external customers
• Defining action plans for improvement

4.4 Assess the different roles of efficiency and effectiveness.
• The difference between efficiency and effectiveness

4.5 Assess the use of operational research (OR) techniques in stores and distribution.
• The use of the following in the stores and distribution area:
- Network analyses
- Distribution modelling
- Simulation
- Queuing theory
• The appropriate technique in a given situation

4.6 Manage and implement the requirements of health and safety legislation in a materials environment.
• The areas affected by The Health and Safety at Work Act
• The roles and responsibilities of staff and management in the working of the Act
• Major roles placed on organisations as a result of the Act

4.7 Manage and implement COSHH regulations.
• The requirements of COSHH (Control of substances hazardous to health) in the materials and environments to which they are applicable
• The roles and responsibilities of management and staff under the Act

4.8 Examine legal issues involved with the transport of hazardous goods.
• The role of major transport legislation in the control of hazardous goods
• The role under this legislation for drivers and organisations involved

5.0 Evaluating the role of information and communication technology (ICT) (Weighting 20%)

5.1 Evaluating the role of ICT in stores and distribution.
• Why there is a need for ICT and its likely scope
• The role of information providers internally and externally
• The need for such systems to be integrated throughout the supply chain
• The role of an integrated system in a move towards more optimal solution

• The use of the computer in basic stores management

5.2 Evaluate major developments in ICT and their effect on store and distribution.
• Compare and contrast the roles of the following:
- EDI
- EPOS
- Data capture devices
- Voice recognition systems
- Mobile computing
- Radio frequency technologies
- Truck and trace systems in different environments

5.3 Evaluate the use and impact of the Internet on the stores and distribution function.
• How the use of the internet can improve efficiency and effectiveness in the stores and distribution areas
• How the internet can be used for selecting suppliers
• The need to develop relationships with suppliers to allow maximum use of the internet

5.4 Evaluate the use of Enterprise Resource Planning (ERP) and its overall value to the organisation.
• The need for an organisation-wide system (ERP) and the impact it is likely to have on the supply chain
• The role of stores and distribution when involved in an (ERP) system
• The need for such an integrated system and its likely benefits
• Examples of ERP systems

5.5 Evaluate new developments and concepts in the area.
• Report on the likely impacts of the following on
stores and distribution:
- Efficient consumer response (ECR)
- Lean and agile thinking
- Fourth party logistics
- Alternative fuels
• The need to outsource the role of stores, transport and logistics

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L5-12 OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN (Optional Unit)

UNIT CHARACTERISTICS

This unit is designed to enable those who work in purchasing to assess the efficiency and effectiveness of an
organisation’s operations. This is the process of converting input resources into output products and services and
occurs in all types of organisation, whether in manufacturing or services, public sector or private.

Students should be able to understand how operations staff add value to its inputs through the effective management of production and delivery. Operations staff are likely to be the most important internal customers of purchasing and supply chain managers.

By the end of this unit students will be able to analyse and evaluate an operations environment and implement a
strategic plan that allocates resources in terms of materials, labour and machinery. In addition they will be able to consider the infrastructure requirements of the management control systems, as applied to different process types and technologies, and select the right approach.

LEARNING OUTCOMES

On completion of this unit, students will be able to:

• Compare the challenges facing operations managers who operate in increasingly complex global markets for goods and services
• Argue the business case for a new type of manager who is capable of managing in a rapidly changing commercial and technological environment
• Formulate an operations strategy that will integrate with the product requirements of a marketing function. Advise on the benefits of make or buy/outsourcing decisions associated with specific components and services
• Explain the relationship between design and procurement and hence propose potential integrating mechanisms that will ensure cost effective development of new products and services
• Have a thorough understanding of how to plan and manage an operations function and report on the optimum layout for specific types of process work flows and process technologies
• Have the ability to set up and formulate effective resource plans and schedules that will deliver products in a cost effective manner.
• Have an in-depth understanding of philosophies and be able to apply methodologies that will assist with the management of change within an operations function and improve the overall competitiveness of the business.

LEARNING OBJECTIVES AND INDICATIVE CONTENT

1.0 Approaching operations management (Weighting 10%)

1.1 Appraise the changing competitive environment of operations.
• Improvements in transport
• Improvements in communications technology
• The convergence of consumer preferences
• Regional trade agreements
• The move to free market and political economies

1.2 Recognise the challenges of today’s changing technological environment.
• Design using computer aided design (CAD) and computer aided manufacturing (CAM)
• Modern manufacturing machinery – NC controlled machine tools
• Computer integrated networks
• Automated guided vehicles and inventory picking systems
• Advanced control technologies

1.3 Managing the impact of globalisation on operations management.
• Increased competition
• Shorter product lifecycles
• Management of virtual teams for new product introduction
• Constant review of core competencies versus global outsourcing

2.0 The Concept of operations (Weighting 10%)

2.1 Defining operations management and understanding operations management in the broader context.
• Definitions of the term operations management
• Classifications under different headings to define sector environment
• Distinguishing operations management as one of the key functions in an organisation

2.2 Appraise the input-transformation-output model and how it relates to operations management
• Recognise the varied resource inputs to the input stage
• Appreciate the meaning of transformation and how this applies to business processes as well as physical manufacturing processes
• Understand the different types of output

2.3 Distinguish the different management issues between product versus service operations.
• Aspects of tangibility
• Quality issues
• Capacity management
• Customer service

2.4 Recognise the role of operations management within the corporate strategic framework.
• Operations in the context of the overall supply chain process
• Different strategy levels within the business
• The theory about top down and bottom up strategic planning
• Hayes and Wheelwright model for operations

2.5 Appraise the strategic relationship between the operations function and other main functions within the
business.
• Marketing
• Finance
• Human resources
• Other key functions such as IT and engineering

2.6 Analyse key performance objectives, their relationship with the order winning criteria and how they contribute
to the success of a business.

• Cost
• Quality
• Responsiveness and speed
• Flexibility
• Dependability

2.7 Demonstrate the significance of strategic outsourcing decisions in terms of:
• Span of control within an organisation
• Core competencies
• Impact on other functions

3.0 The Design of Products and Services (Weighting 15%)

3.1 Appraise the design process for products and services.
• Define the term design
• Aspects of customer satisfaction
• New approaches to designing better products
• Understanding the full design business process

3.2 Recognise the benefits that arise from thorough design evaluation and Improvement.
• The contribution of purchasing to design
• Compare and contrast areas of conflict between purchasing and design
• Specifications on-line and the use of e-procurement

3.3 Establish the need for environmentally sensitive design.
• Trade-offs in designing environmentally acceptable products
• Life cycle analysis
• End of life issues
• Environmentally preferred materials
• Guidance by ISO

3.4 Argue the case for the contribution that purchasing and supply can make to the design of products and services by the application of certain tools.
• Standardisation
• Modularisation
• Value analysis and engineering
• Computer aided design

4.0 The Design and Management of the Operations Network (Weighting 25%)

4.1 Interpret operations as part of a demand/supply network.
• Network design and investment
• Strategic decisions in developing a network
• Feasibility factors
• Benefit factors
• Financial factors
• Organisational structure
• Integration
• Outsourcing: make versus buy

4.2 Distinguish between the different types of process in manufacturing and service industries.
• Product and process design
• Processing systems
• Key issues in the design of manufacturing processes

4.3 Distinguish between the different process layouts and work flows and how they impact on efficiency.
• Basic types of layout
• Relationship of layout to process types
• Design of layouts

4.4 Compare and contrast the capabilities, benefits and limitations of process technologies in operations.
• Definition of technology
• Materials processing
• Information processing
• World wide web
• Management information systems
• Customer processing technologies

4.5 Compare and contrast different approaches to job design.
• Definition of the word job
• Advantages and disadvantages of the different approaches
• Scientific management approach
• Motivational approaches
• Socio-technical systems approach
• Human factors approach
• Ergonomics
• Empowerment and self-managed systems

4.6 Evaluate the different approaches to material handling principles.
• Approaches to material handling issues
• Key principles of material handling
• Benefits of efficient material handling

4.7 Appraise the use and techniques of work measurement.
• The use and techniques of work study
• F WTaylor
• Gilbreth’s further work

4.8 Appraise the techniques used to plan and control quality.
• Definition of quality
• Dimensions of quality
• Knowing the costs of quality
• Techniques used to plan and control quality in products and processes

4.9 Formulation of asset maintenance and replacement strategies.
• Differences between preventative and repair maintenance
• Time to replace an asset calculation

4.10 Examine the complexity surrounding facility location decisions.
• Reasons for complexity
• Demand side decisions
• Supply side decisions
• The centre of gravity method

5.0 The Planning and Control of Resources (Weighting 25%)

5.1 Examine the objectives for operations planning and control (OPC) and the actions necessary to control
operations.
• Definitions of OPC
• The different stages of OPC

5.2 Develop strategies for the planning and management of capacity.
• Definition of capacity
• Strategic capacity planning

5.3 Appraise appropriate strategies for managing and smoothing capacity.
• Measuring capacity
• Smoothing capacity

5.4 Calculate the loading, sequencing and scheduling of the operations system.
• Scheduling of work
• Scheduling in intermediate volume systems
• Scheduling in low volume systems

5.5 Differentiating between dependent and independent demand.
• The nature of demand for products and services
• The importance of inventory

5.6 Analyse methods of forecasting demand.
• The use of some basic techniques for forecasting
• Some forecasting techniques such as Delphi and periodic review

5.7 Examine the mechanics of MRP, ERP and OPT control systems.
• MRP/MRPII and how they work
• Advantages and disadvantages of MRP/MRPII
• Optimised production technology (OPT)

5.8 Examine the philosophy of just in time (JIT) and continuous performance improvement in the context of
lean manufacturing.
• The definition and philosophy of JIT
• The advantages of JIT
• JIT as the basis for a continuous improvement programme
• The use of MRP and JIT
• Aspects of lean manufacturing

5.9 Analyse how failure and potential failure can be detected and prevented.
• The definition and causes of failure
• Preventing failure through design controls

5.10 Examine and evaluate the economics of operations.
• Variable costs
• Fixed costs
• Overhead costs
• Break-even analysis

5.11Distinguish the key roles and objectives of project management.
• Definition of project management
• The project life cycle
• Creating a project network
• Calculating the critical path
• Resource constraints

6.0 Philosophies and Methods for making improvements in Operations Management (Weighting 15%)

6.1 Examine the cultural change required to implement total quality management.
• TQM (Total Quality Management) as a philosophy
• The development of TQM by Deming, Crosby and Juran
• Benefits of TQM
• Criticisms of TQM

6.2 Appraise the utilisation of business processes in the delivery of products and services.
• Understanding transformation processes
• Business processes as a part of a cross functional strategy
• Business processes as a means to delivering value

6.3 Assess the innovative application of technology for operational improvement.
• Application of technology in order to add step changes in value added activities
• Definition of business process re-engineering (BPR)
• Implementing BPR
• Reasons for BPR failure

6.4 Compare the different evolving process technologies.
• Process technologies
• Technology and organisational structures
• Technology and the environment

6.5 Appreciating the necessity to measure an operation’s performance against others in similar organisations.
• What is benchmarking?
• How to benchmark a function or process
• Ethics of benchmarking
• Benefits of benchmarking
• Limitations of benchmarking

6.6 Compare the different tools and techniques for facilitating improvement and change within operations.
• Systems thinking
• Hard system methodologies
• Soft system methodologies
• FMEA

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L5-13 THE MACHINERY OF GOVERNMENT  AND PROCUREMENT (Optional Unit for students in the UK)

UNIT CHARACTERISTICS

This unit seeks to explore the drivers and decision makers of central and local government and the National Health Service (NHS), and the impact these have upon the public sector procurement function.

This unit will also include consideration of the background to current public procurement policy and procedures, the regulatory frameworks and rules relating to procurement practice and the role of elected representatives and officials in making significant procurement decisions.

An understanding of government policy, regulations and government initiatives such as the efficiency agenda, social agenda and sustainability drivers will be imperative to the success of any candidates.

This unit will also include an understanding of the systems and processes developed and adopted for audit, monitoring and measurement, including government accounting and budgets, and the roles of the National Audit Office (NAO), Audit Commission and Public Accounts Committee (PAC).

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CIPS - MCG Centre Number - 005031578