4

CIPS Level 4
Diploma in
Procurement
and Supply
Ref: 603/3924/X

2018 Syllabus
Version 1
Your
qualifıcation
CIPS qualifications are regulated internationally to ensure we offer a recognised, professional
standard in procurement and supply. CIPS Level 4* Diploma in Procurement and Supply is
a vocationally related professional qualification. Formal recognition is included within the
regulatory frameworks of an increasing number of countries such as the UK (England, Wales
and Northern Ireland), UAE (including Dubai) and Africa (including Zambia). Further information
on this recognition and the details of corresponding qualifications levels for other international
qualifications frameworks are detailed on our website. CIPS members can have the confidence
in our regulated qualifications, which reliably indicate the standard of knowledge, skills and
understanding that you, as a learner, are required to demonstrate.
A step up from the Level 3 Advanced Certificate in In this way successful learners will possess transferable
Procurement and Supply Operations, the Level 4 Diploma workplace skills, developing their operational and tactical
in Procurement and Supply is a stepping stone to study abilities as they strive for managerial roles and responsibilities.
on the CIPS Level 5 Advanced Diploma in Procurement It is aimed at those in the profession who have procurement
and Supply. The content has been written using the CIPS and supply activity at the heart of their role. Learners will be
Procurement and Supply Cycle as its focus, which presents expected to provide advice and guidance to key stakeholders
a cyclical process of key steps faced by those procuring on the performance of organisational procedures and
goods or services. The Diploma offers the most common processes associated with procurement and supply and will
entry route to the profession and should be used by aspire to manage developments in and improvements to
learners to develop a professional ‘tool box’ which learners the related functions. Transferable skills are those such as
can apply in the practical environment and further develop communication, teamwork, and planning and completing
at Levels 5 and 6. tasks to high standards, all enable the learner to add value to
the organisation.

Entry level Entry level Highest Entry level

Level 3 Level 4
Level 2 Level 5 Level 6
Certificate in
Advanced Diploma in Advanced Professional
Certificate in
Procurement
Procurement
Procurement Diploma in Diploma in
and Supply Procurement Procurement
Operations
and Supply and Supply and Supply and Supply
Operations
Operations

Next steps

This qualification provides progression to the CIPS Level 5 Advanced Diploma in

Procurement and Supply. Level 5

* Refers to levels within the UK RQF. Other regulatory bodies may have different corresponding levels

Based on the Operational and Managerial competency levels of CIPS Global Standard
What will I study? 60
Credits
Eight CORE modules make up 60 required credits required for
completion

CORE Level 4 Scope and Influence of Procurement and Supply (L4M1)

12
CREDITS

CORE Level 4 Defining CORE Level 4 Commercial

Business Need (L4M2) 6 Contracting (L4M3) 6
CREDITS CREDITS

CORE Level 4 Ethical and CORE Level 4 Commercial

Responsible Sourcing (L4M4) 6 Negotiation (L4M5) 6
CREDITS CREDITS

CORE Level 4 Supplier CORE Level 4 Whole Life

Relationships (L4M6) 6 Asset Management (L4M7) 6
CREDITS CREDITS

CORE Level 4 Procurement and Supply in Practice (L4M8)

12
CREDITS

Who is it for? On completion, you will be able to analyse, interpret and

evaluate relevant information and ideas and have an
This qualification is the essential toolkit for anyone informed awareness of differing perspectives and
planning a career in procurement and supply. approaches within the profession. You will also be able
Developed and written using the Procurement and to review the effectiveness and appropriateness of
Supply cycle** as it’s focus, it is at the same level as methods, actions and results.
the first year of an undergraduate degree course.
It’s suitable for those in operational roles or those Entry requirements * The Procurement cycle
is the cyclical process of
managing or supervising the procurement and supply
This is the only entry point onto our Diploma key steps when procuring
function who want to develop their career and work
qualifications. A minimum of at least two A-levels (or goods or services.
towards MCIPS Chartered Procurement and Supply www.cips.org/en-gb/
international equivalent) or a CIPS Level 3 Advanced
Professional. knowledge/procurement-
Certificate qualification is required. Alternatively,
cycle/
What will I learn? you will need a minimum of two years’ relevant
experience in a business environment.
You will learn about making procurement and supply
happen within an organisation, and you will be equipped Credit values
with an essential range of knowledge and tools that you
To gain a qualification you are required to complete a
can apply immediately in your workplace. Learn how to
total number of credits. This is a way of quantifying the
apply practical, theoretical and technical knowledge, gain
required number of study hours. 1 credit is equivalent to
a clear understanding of procurement and supply and
10 hours of study. Each module is given a credit value of
develop the ability to address complex, non-routine
6 or 12 credits.
problems.

60
Total credits required
for completion

03
About our
exams and your
study commitments

Objective Response exam format (OR)

These questions allow you to select a response from a list of possible answers.
OR
You will find these types of exams across all our qualifications levels and they
are marked by computer and then moderated by CIPS examiners.

Constructed Response exam format (CR)

These questions require you to create or ‘construct’ a response to the question

CR
such as an essay or case study. You will find this type of exam in our diploma
level qualifications and they will be marked by subject expert examiners.

Your total qualification time (TQT)

The TQT indicates the overall number of guided learning hours,

600
TQT HRS

additional self-study and assessment time that is required.

250
Guided learning hours (GLH)

It is expected that you will undertake 250 GLH. The definition of guided learning
GLH HRS
hours is: ‘A measure of the amount of input time required to achieve the
qualification. This includes lectures, tutorials and practicals, as well as
supervised study in, for example, learning centres and workshops’.

Self-study requirement (SSR)

Additionally, we recommend that you also commit to at least 335 SSR

335
SSR HRS

hours. This includes wider reading of the subject areas and revision to give
yourself the best preparation for successfully achieving the qualification.

Total exam time

All the modules in CIPS qualifications are assessed by an examination.

15
HRS

cips.org/qualifications
 C Scope and
CORE MODULE
Influence of
Procurement
CIPS GLOBAL
and Supply
[L4M1]
STANDARD
1.1 • 1.2 • 1.3 • 1.4
3.1 • 3.2 • 4.1 • 6.1
6.2 • 7.1 • 8.1 • 11.1

CR
Module purpose

On completion of this module, learners will be able to identify the key stakeholders in the
application of the sourcing process and analyse the procurement cycle, evaluating the
influence that procurement and supply has as a source of added value for the organisation.
CONSTRUCTED
RESPONSE EXAM Module aim(s)

3
In any organisation, a significant proportion of costs are accounted for by the purchases
of products and/or services, hence organisations see procurement and supply as a key
contributor to their value added strategies. Equally, any organisation will also be managing
the supply of products and/or services to their customers, be they internal or those from
HRS other external organisations, consumers or the general public. This module is designed
using the CIPS Procurement Cycle as its basis. It will provide those who are interested in
EXAM DURATION developing an informed awareness of different perspectives or approaches within the
HOURS discipline, an overview of the key stages associated with procurement and supply, and
will serve as an introduction for those who are expected to address complex well-defined

120
procurement and supply problems that are non-routine in nature.

HRS

MODULE
LEARNING
TIME

12 CREDITS
Credit value

05
Learning outcomes, assessment criteria and indicative content

1.0 Understand and analyse the added value that can 2.0 Understand and analyse the key steps when procuring
be achieved through procurement and supply chain goods or services
management
2.1 Explain the key aspects of the procurement cycle
1.1 Describe the categories of spend that an organisation • The CIPS Procurement Cycle defining the stages of a
may purchase generic sourcing process from identification of needs
• Definitions of procurement and purchasing and to contract award and implementation and end of
supply life disposal
• Typical breakdown of organisational costs • Differentiating between pre contract award and post
represented by procurements of goods, services or contract award stages
constructional works
• Stock and non-stock procurements 2.2 Analyse the key stages of a sourcing process
• Direct and indirect procurements • Stages of the sourcing process that relate to
• Capital purchases and operational expenditures defining needs, creation of contract terms, supplier
• Services procurements selection, contract award and contract or supplier
management
1.2 Analyse the different sources of added value in • The purpose and added value that is created by each
procurement and supply of the stages of the sourcing process
• The five rights of procurement
• Defining total life cycle costs or the total costs of 2.3 Explain how electronic systems can be used at
ownership different stages of the sourcing process
• Achieving quality, timescales, quantities and place • E-requisitioning, e-catalogues, e-ordering, e-sourcing
considerations in procurements from external and e-payment technologies
suppliers • The impact of electronic purchase to pay (P2P)
• Other sources of added value such as innovation, systems on the sourcing process
sustainability and market development
• Defining value for money 2.4 Analyse the relationship between achieving
compliance with processes and the achievement of
1.3 Compare the concepts of procurement and supply outcomes
chain management • Organisational needs for structured sourcing
• Definitions of procurement, supply chains, supply processes
chain management and supply chain networks • The relationship between process compliance and
• Comparisons of supply chain management with the achievement of added value outcomes
procurement
• Complex Supply Chains
• Definitions of logistics and materials management

1.4 Differentiate 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 function

cips.org/qualifications
3.0 Understand and analyse the key aspects of 4.0 Understand and analyse the need for compliance
organisational infrastructure that shape the scope of a with requirements when undertaking procurement
procurement or supply chain function activities in different sectors

3.1 Explain key aspects of corporate governance of a 4.1 Classify different economic and industrial sectors
procurement or supply chain function • Economic classifications including public and private
• Conflicts of interest sectors, charities, not-for-profit and third sector
• The need for documented policies and procedures • Industrial classifications and sectors such as
for procurement manufacturing, retail, construction, financial,
• Organisational accountability and reporting for agriculture and service
procurement roles and functions
• The status of procurement and supply chain 4.2 Analyse the impact of the public sector on
management within organisations procurement or supply chain roles
• Codes of ethics in procurement • Objectives of public sector organisations such as
• The CIPS Code of Conduct improving services, communities and corporate
social responsibility
3.2 Analyse the impact of organisational policies and • Regulations that impact on procurement and supply
procedures on procurement chain operations
• Aspects that can be included in procedures for • Need for competition, public accountability and value
procurement and supply such as responsibilities for for money
procurement, regulations relating to competition,
levels of delegated authority, responsibilities for the 4.3 Examine the impact of the private sector on
stages of the sourcing process, invoice clearance and procurement or supply chain roles
payment • Objectives of private sector organisations such as
• The use of procurement policies, procurement profitability, market share, shareholder value and
strategies and procurement manuals corporate social responsibility
• The involvement of internal functions and personnel • Regulations that impact on procurement and supply
in the sourcing process chain operations
• Responsible Procurement and the International • The importance and role of branding
Labour Organisation core conventions
4.4 Examine the impact of the not-for-profit or third
3.3 Examine the different structures of a procurement or sector on procurement or supply chain roles
supply chain function • Objectives of the not-for-profit or third sector
• The use of centralised and devolved structures • Regulations impacting on charities
• Hybrid structures of a procurement or supply chain • Need for regulated procurement exercises
function (such as consortium structures, shared
services, lead buyer structures, and outsourced)
Interacting with people and building rapport
• The need for customer service and value for money
outcomes

3.4 Explain 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
use

07
Defıning C
Business Need CORE MODULE

[L4M2]
CIPS GLOBAL
STANDARD
2.2 • 2.3

Module purpose

On completion of this module, learners will be able to devise a business case for
OR
requirements to be externally sourced and will understand the role of market management
and competitive forces as they specify goods and services in procurement and supply. OBJECTIVE
RESPONSE EXAM
Module aim(s)

The development of a business case and the ability to analyse markets are key if an
organisation is to successfully source activity from external suppliers. Similarly, the
clear definition of specifications for through life contracts is crucial to overall business
achievement. This module is designed for those who are expected to analyse, interpret and
1.5HRS
evaluate information on the different types of markets utilised by procurement and supply.
It explores a variety of elements that underpin the development of business cases and EXAM DURATION
HOURS
specifications and considers the options that should be explored when procurement and
supply personnel are involved in defining requirements.

60 HRS

MODULE
LEARNING
TIME

Credit value
6
CREDITS

cips.org/qualifications
Learning outcomes, assessment criteria and indicative content

1.0 Understand how to devise a business case for 2.3 Contrast the breakdown between direct and
requirements to be sourced from external suppliers indirect costs and the types of data that can provide
information on cost and price
1.1 Analyse how business needs influence procurement • Collate sources of information to estimate the
decisions breakdown of costs between direct and indirect costs
• Type of purchase such as new purchase, modified re- for purchased goods and services
buy, straight re-buy • Use information to prepare budgets or to negotiate
• Implications of the business needs on the types of prices
purchase • Research market data and use to estimate and
• Procurement’s role in developing a business case negotiate current and future prices and costs for
purchased goods and services
1.2 Identify how costs and prices can be estimated for
procurement activities
• Types of market data that can provide information 3.0 Understand the use of specifications in procurement
on costs and prices and supply
• Direct and indirect costs
3.1 Analyse different types of specifications used in
• Producing estimated costs and budgets
procurement and supply and sources of information
• Approaches to total costs of ownership/whole life
that can be used to create specifications
cycle costing
• Drawings, samples, branded, technical
• Conformance specifications
1.3 Analyse the criteria that can be applied in the creation
• Output or outcome, statement of work based
of a business case
specifications
• Examples of criteria typically applied in the
• Standards
production of a business case: costs, benefits,
options, alignment with organisational needs and • The internet
timescales • Suppliers
• Benchmarking requirements • Directories

3.2 Identify sections of specifications for through life

1.4 Interpret financial budgets for the control of
contracts
purchases
• Scope
• The purpose of financial budgets
• Definition
• Cost entries and timings of cash flows
• Description of requirement
• Performance and control of budgets
• Testing and acceptance
• Dealing with variances to budget
• Change control mechanisms and remedies
• Social and environmental criteria
2.0 Understand market management in procurement and
supply 3.3 Identify the risks that can result from inadequate
specifications and mitigation approaches
2.1 Analyse the different types of markets utilised by • Under or over specified need
procurement and supply
• Monitor specification creation by colleagues and
Such as: other internal stakeholders
• Manufacturing
• Construction 3.4 Identify opportunities to regulate short and longer
• Retail term specifications
• Financial • Implement standardisation
• Agriculture • Value analysis
• Services • Value engineering
• Provide guidance to internal stakeholders on
2.2 Compare the competitive forces that influence implementation
markets
• Bargaining strength of suppliers and buyers,
• Availability of substitutes and threat of entry

09
Commercial C
Contracting CORE MODULE

[L4M3]
CIPS GLOBAL
STANDARD
1.3 • 4.1 • 5.1 • 5.2
5.3 • 7.5 • 8.2 • 8.3

Module purpose

On completion of this module, learners will be able to describe the key elements and legal
aspects of formal commercial contracts, and analyse and interpret the fundamentals
OR
of specifications and key performance indicators that are included in contractual
OBJECTIVE
arrangements made with suppliers. RESPONSE EXAM

Module aim(s)

In any organisation, a significant element of the procurement and supply function is based
around the contracting process. If they are to be successful, contracts must be clearly
defined, be cognisant of legal requirements and contain key clauses and terms. This module
is designed for those working in the procurement and supply field, or those who have
1.5 HRS

responsibility for the development of legally binding contracts with suppliers.

EXAM DURATION
HOURS

60 HRS

MODULE
LEARNING
TIME

Credit value
6
CREDITS

cips.org/qualifications
Learning outcomes, assessment criteria and indicative content

1.0 Understand the legal issues that relate to the 2.0 Understand the fundamentals of specifications and
formation of contracts key performance indicators that are included in
contractual arrangements made with suppliers
1.1 Analyse the documentation that can comprise a
commercial agreement for the supply of goods or 2.1 Analyse the content of specifications for
services procurements
• Invitation to tender or request for quotation • Drafting specifications and developing market
• Specification dialogue with suppliers
• Key performance indicators (KPIs) • The use of standards in specifications
• Contractual terms • Typical sections of a specification
• Pricing and other schedules (such as for health • Standardisation of requirements versus increasing
and safety records, details of suppliers staff, use the range of products
of sub-contractors, non-disclosure/confidentiality • Including social and environmental criteria in
agreements) specifications
• The role of Information Assurance in developing
1.2 Analyse the legal issues that relate to the creation of specifications
commercial agreements with customers or suppliers
• Invitations to treat or invitations to negotiate 2.2 Appraise examples of key performance indicators
• Rules relating to offer and acceptance, consideration, (KPIs) in contractual agreements
intention to create legal relations and capacity to • Defining contractual performance measures or key
contract performance indicators (KPI)
• The battle of the forms and precedence of contract • The use of service level agreements
terms • Typical KPI measures to assess quality performance,
• Risks presented by contracting on suppliers terms or timeliness, cost management, resources and delivery
through oral contracts
• The Vienna Convention on the International Sales of
3.0 Understand the key clauses that are included in
Goods
formal contracts
• Misrepresentations made pre-contract award

3.1 Analyse contractual terms for contracts that are

1.3 Compare types of contractual agreements made created with external organisations
between customers and suppliers • The use of express terms
• One off purchases
• The use of standard terms of business by both
• Framework arrangements and agreements purchasers and suppliers
• The use of mini-competitions • The use of model form contracts such as NEC, FIDIC,
• Call offs IMechIEE
• Services contracts
• Contracts for the hire and leasing of assets 3.2 Recognise examples of contractual terms typically
incorporated into contracts that are created with
external organisations
• Key terms in contracts for indemnities and liabilities,
sub-contracting, insurances, guarantees and
liquidated damages
• Terms that apply to labour standards and ethical
sourcing

3.3 Recognise types of pricing arrangements in

commercial agreements
• The use of pricing schedules
• The use of fixed pricing arrangements
• Cost plus and cost reimbursable pricing
arrangements
• The use of indexation and price adjustment formulae
• The use of incentivised contracts
• Payment terms

11
Ethical and C
Responsible CORE MODULE

Sourcing
[L4M4] CIPS GLOBAL
STANDARD
6.4 • 6.5 • 11.3

Module purpose

On completion of this module, learners will be able to explain the options and associated
OR
processes available for sourcing with external suppliers. They will also examine the legal and
ethical impact and the implications of corporate social responsibility, on the final sourcing OBJECTIVE
RESPONSE EXAM
decision.

1.5
Module aim(s)

In any organisation, a significant element of procurement and supply activity is based around
decisions to internally conduct activity or to source from an external supplier. Hence, the
selection of the correct external suppliers is a vital contributor to overall organisational HRS
success. This module enables personnel with roles in procurement and supply to formulate
selection criteria and sourcing strategies to ensure that the organisation will make the EXAM DURATION
HOURS
correct choice of external suppliers. It explains options for sourcing, and examines the key
processes that can be applied to the analysis of potential external suppliers and to ensure the

60
development of ethically and socially responsible sourcing agreements.

HRS

MODULE
LEARNING
TIME

Credit value
6
CREDITS

cips.org/qualifications
Learning outcomes, assessment criteria and indicative content

1.0 Understand options for sourcing requirements from 2.0 Understand the key processes that can be applied to
suppliers the analysis of potential external suppliers

1.1 Identify the sourcing process in relation to 2.1 Analyse commonly used sources of information
procurement on market data that can impact on the sourcing of
• Definitions of sourcing and outsourcing requirements from external suppliers
• Make or buy decisions • Compiling data on expenditures on suppliers
• Strategic and tactical sourcing costs and benefits of • Indices that measure economic data
outsourcing • Secondary data on markets and suppliers
• Outsourcing non-core and core work or services • Commodity pricing
• Supplier pre-qualification or criteria for supplier • Analysing potential sales
appraisal • Financial reports and supplier financial stability
• Vendor or supplier performance management • The role of credit rating agencies
• Risks in outsourcing
• The market development and growth of outsourcing 2.2 Identify the key processes used for obtaining
• Regulations affecting employees terms of quotations and tenders
employment • Advertising requirements
• Requests for information or quotations
1.2 Differentiate between approaches to the sourcing of • The operation of tendering
requirements from suppliers • Formalised arrangements for tendering
• Single, dual and multiple sourcing arrangements • Decision criteria for dispensing with tendering
• The use of tendering: open, restricted and negotiated
approaches to tendering 2.3 Identify the criteria that can be commonly applied to
• Direct negotiations with suppliers the assessment of quotations or tenders
• Intra company trading and transfer pricing • Assessment of suppliers proposals
arrangement • The use of weighted points systems for assessment
• Implications of international sourcing • Recommending sources of supply
• Financial statements such as the profit and loss,
1.3 Define selection criteria that can be commonly applied balance sheet and cash flow statements
when sourcing requirements from external suppliers • Measures and ratios of profitability, liquidity, gearing
• Typical selection criteria such as; quality assurance, and investment
environmental and sustainability, technical • The limitations of ratio analysis
capabilities, systems capabilities, labour standards, • Added value
financial capabilities and credit rating agencies
• The importance of supplier financial stability and due 2.4 Analyse how electronic systems can be used to help
diligence checks the sourcing of requirements from external suppliers
• Ratio analysis to make conclusions on profitability, • E-requisitioning and purchase ordering systems
liquidity, gearing and investment • E-catalogues on intranets and the internet
• The limitations of ratio analysis • The use of e-auctions and reverse auctions
• E-tendering systems
1.4 Define award criteria that can be commonly applied
when sourcing requirements from external suppliers
• Typical award criteria such as; price, total life cycle
costs, technical merit, added value solutions, systems
and resources
• Balancing commercial and technical award criteria

13
3.0 Understand compliance issues when sourcing from 4.0 Understand ethical and responsible sourcing
suppliers
4.1 Describe the impact of international ethical standards
3.1 Compare the key legislative, regulatory and on procurement and supply
organisational requirements when sourcing in the not- • Bribery
for-profit, private and public sectors • Corruption
• The use of competitive tendering processes • Fraud
• The impact of timescales on tendering processes • Human rights
• Procedures for contract award • Modern slavery
• Regulatory bodies that impact on the private sector
• Regulations that impact on product and safety 4.2 Identify practices that support ethical procurement
standards • Application of the CIPS Code of Conduct
• Ethical codes of practice
3.2 Compare the key legislative, regulatory and • Prequalification and assessment criteria
organisational requirements when sourcing from • Due diligence on suppliers and risk assessment
international suppliers • Supporting information on ethical practices in
• Documentation relating to imports supplier quotations and tenders
• Import duties and tariffs • Contractual clauses
• Payment mechanisms • Supplier monitoring
• The use of INCOTERMS • KPIs
• Customs control and clearance
• Currency regulations 4.3 Compare the use of audits and other feedback
• Applicable law mechanisms to evaluate ethical standards in the
workplace
• Monitor supplier performance
• Encourage dialogue with suppliers on improvements
to process
• Recommend remedial actions where appropriate
• Identify and address potential conflicts of interest

4.4 Contrast processes and practices that the

organisation could adopt to meet the requirements of
Corporate Social Responsibility (CSR)
• The triple bottom line – profit, people and planet
• Adopt sustainable practices, standards and
specifications in the supply chain
• Consider the social impact of the organisation’s
behaviours
• Design procurement processes to deliver social
outcomes as well as, or as an alternative to, normal
economic measures of value
• Expand reporting frameworks to include ecological
and social performance
• Define organisational value for money to include
social outcomes - use of local labour, participation of
disadvantaged groups

cips.org/qualifications
 C Commercial
CORE MODULE
Negotiation
[L4M5]
CIPS GLOBAL
STANDARD
6.6 • 7.3 • 7.4

OR Module purpose

On completion of this module learners will be able to identify approaches to successfully

achieving negotiated commercial agreements with external organisations.
OBJECTIVE
RESPONSE EXAM Module aim(s)

1.5
The creation of formalised agreements is a critical part of the success of any organisation.
Those involved in procurement and supply activity will therefore be able to effectively
negotiate with stakeholders and/or suppliers and to understand the methods associated
with preparing for and carrying out commercial negotiations. This module is designed for
HRS those who are faced with negotiations. It enables the learner to analyse approaches to the
negotiation of agreements made with external parties, how to prepare for them and what
EXAM DURATION techniques are available to ensure successful outcomes.
HOURS

60 HRS

MODULE
LEARNING
TIME

6
CREDITS
Credit value

15
Learning outcomes, assessment criteria and indicative content

1.0 Understand key approaches in the negotiation of 2.2 Contrast the economic factors that impact on
commercial agreements with external organisations commercial negotiations
• The impact of microeconomics and market types on
1.1 Analyse the application of commercial negotiations in commercial negotiations
the work of procurement and supply • Macroeconomics and its influence on commercial
• Definitions of commercial negotiation negotiations
• Negotiation in relation to the stages of the sourcing • Sources of information on micro and macro
process economics
• Sources of conflict that can arise in the work of
procurement and supply 2.3 Analyse criteria that can be used in a commercial
• Team management and the influence of negotiation
stakeholders in negotiations Criteria such as:
• Setting objectives and defining the variables for a
1.2 Differentiate between the types of approaches that commercial negotiation
can be pursued in commercial negotiations • The bargaining mix
• Collaborative win-win integrative approaches to • Positions and interests
negotiations • Openings and presenting issues
• Distributive win-lose, distributive approaches to
negotiation 2.4 Identify the resources required for a negotiation
• Pragmatic and principled styles of negotiation • Choice of location
• Setting targets and creating a best alternative to a • Involving appropriate colleagues
negotiated agreement (BATNA) • Use of telephone, teleconferencing or web based
meetings
1.3 Explain how the balance of power in commercial • Room layout and surroundings
negotiations can affect outcomes
• The importance of power in commercial negotiations
• Sources of personal power 3.0 Understand how commercial negotiations should be
• Organisational power: comparing the relative power undertaken
of purchasers and suppliers
3.1 Identify the stages of a commercial negotiation
• How suppliers gather information on purchasers
• Defining the stages of a negotiation such as: -
• How purchasers can improve leverage with suppliers
preparation, opening, testing, proposing, bargaining,
agreement and closure
1.4 Identify the different types of relationships that
• How behaviours should change during the different
impact on commercial negotiations
stages of a negotiation
• The relationship spectrum
• Building relationships based on reputation, and trust
3.2 Appraise the key methods that can influence the
• Repairing a relationship
achievement of desired outcomes
• The use of persuasion methods
2.0 Know how to prepare for negotiations with external • The use of tactics to influence the other party
organisations
3.3 Compare the key communication skills that help
2.1 Describe the types of costs and prices in commercial achieve desired outcomes
negotiations • Types of questions
• Types of costs: direct and indirect, variable and fixed
• Effective listening
• Break-even analysis: cost volume profit formulae • Push and pull behaviours
• Costing methods such as absorption, marginal or • Nonverbal communication
variable and activity based costing
• The influence of culture in commercial negotiations
• Volumes, margins and mark ups and their impact on
• The use of emotional intelligence in commercial
pricing negotiation
• Negotiating prices

3.4 Analyse how to assess the process and outcomes of

negotiations to inform future practice
• Reflecting on performance
• Opportunities for improvement and development
• Protecting relationships after the negotiation

cips.org/qualifications
 C Supplier
CORE MODULE
Relationships
[L4M6]
CIPS GLOBAL
STANDARD
1.2 • 1.4 • 2.1
6.3 • 9.3

OR Module purpose

On completion of this module, learners will be able to analyse the dynamics of supplier
relationships, examine the processes and procedures for working with stakeholders and
appreciate the concept of partnering.
OBJECTIVE
RESPONSE EXAM
Module aim(s)

1.5
In any organisation, a significant element of the procurement and supply function is based
around decisions to source activity from external suppliers. Once agreements have been
established the relationship established with the supplier is paramount to overall success. At
its highest level outsourcing can take the form of a partnership or joint venture. This module
HRS
is designed for those who have responsibility for maintaining and managing relationships
with stakeholders and suppliers and for those who may be faced with establishing and
EXAM DURATION
HOURS developing formal partnerships.

60 HRS

MODULE
LEARNING
TIME

6
CREDITS
Credit value

17
Learning outcomes, assessment criteria and indicative content

1.0 Understand the dynamics of relationships in supply 2.3 Compare the practical considerations of stakeholder
chains management
• Accurate cost modelling
1.1 Differentiate between different types of commercial • Reduced impact of price fluctuations
relationships in supply chains • Early supplier involvement in product and/or service
• Internal and external relationships development
• The relationship spectrum • Knowledge transfer and access to innovation
• The relationship life cycle • Common metrics to drive change for both
organisations
1.2 Appraise portfolio analysis techniques to assess • Improve risk management and continuity of supply
relationships in supply chains
• Matrices to identify supply, supplier and purchaser 2.4 Identify the processes for terminating stakeholder
positioning relationships
• Developing action plans • Reasons for termination
• The process of termination
1.3 Identify the competitive forces that impact on • Timing
relationships in supply chains • Relationship impacts – amicable vs. hostile
• Sources of competitive advantage • Legal considerations – finances, confidentiality, IPR,
• Competitive forces: sources of competitive rivalry, security, employee rights
bargaining power of buyers and suppliers, threat of • Succession issues – continuity of supplies
new entrants and potential substitutes
• STEEPLE factors that impact on supply chains (social,
technological, economic, environmental, political, 3.0 Understand the concept of partnering
legislative and ethical)
3.1 Analyse the concept of partnering and where it is a
suitable approach
1.4 Compare the sources of added value that can be
• The three types of partnering
achieved through supply chain relationships
• The link between relationships as a process and the • Partnering vs. ‘traditional’ contracting agreement
achievement of added value outcomes • The drivers for partnership sourcing
• Sources of added value: pricing and cost • Advantages for purchaser and supplier
management, improving quality, timescales, • High spend
quantities and place considerations in procurements • High risk
from external suppliers • Technically complicated supplies
• The link between organisations in supply networks • New services
• Fast-changing technology
• Restricted markets
2.0 Understand processes and procedures for successful
working with stakeholders 3.2 Appraise the process of partnership implementation
• Identify items potentially suitable for partnership
2.1 Analyse the purpose of organisational procedures and sourcing
processes in sourcing goods and/or services • ‘Sell’ the philosophy to senior management and other
• Achieving value for money functions of the organisation
• Supplier identification, assessment and selection • Define the standards that potential partners will be
• Selection and awarding criteria expected to meet
• Establish joint commitment to the partnership
2.2 Compare team management techniques to ensure • Reviews and audits
positive stakeholder relationships
• Positive relationships through positive contributions
3.3 Identify the reasons why partnerships fail
• Overcome resistance • Poor communication
• Identify conflict and coping processes • Lack of senior management support and trust
• Cross-organisational teams • Lack of commitment by one or both parties
• Stages of team development – forming, storming, • Poor planning
norming, performing
• Lack of value-added benefit
• Changes in the market
• Corporate cultural differences
• Logistics and distance barriers

cips.org/qualifications
 C Whole Life Asset
CORE MODULE
Management
[L4M7]
CIPS GLOBAL
STANDARD
4.2 • 4.3

OR Module purpose

On completion of this module, learners will be able to explain methods of inventory storage
and control and analyse the concept of whole life cost from concept through to disposal.
OBJECTIVE
RESPONSE EXAM Module aim(s)

1.5
Whole life costing takes into account the total cost of a product or service over its lifetime,
from concept through to disposal including purchase, hire or lease, maintenance, operation,
utilities, training and disposal. Hence, it is important for those involved in the procurement
and supply function to take all these elements into consideration when making decisions and
HRS comparing the costs of buying, renting or leasing equipment. In most cases the purchase
costs are a small proportion of the cost of operating it. Although costly, there are numerous
EXAM DURATION reasons why organisations elect to hold inventory. The management and control of such
HOURS
inventory is therefore vital to organisational success. This module is designed for those who will
have responsibility for the whole life management of assets and enables learners to analyse

60
methods for inventory movement and control and to analyse the concept of whole life cost.

HRS

MODULE
LEARNING
TIME

6
CREDITS
Credit value

19
Learning outcomes, assessment criteria and indicative content

1.0 Understand methods for the storage and movement 2.3 Identify techniques associated with inventory control
of inventory • Subjective and objective forecasting
• Re-order quantities and levels
1.1 Identify the principles, purpose and impact of stores • MRP and MRPII
and warehouse design • ERP
• Location of stores and warehouses • Just-in-time
• Stores and warehouse design • Lean
• Factors that influence stores and warehouse layout • Inventory performance measures – lead times,
• Flow, space utilisation and flexibility service levels, rate of stock turn, stock outs in a given
period, stock cover
1.2 Explain the use of product coding in inventory
operations
• Systems for product coding 3.0 Understand the concept of through life cost
• Bar coding
3.1 Analyse the contributing factors when establishing
• Order tracking technologies
total cost of ownership
• The use of RFID technologies
• Purchase price
• Hire or lease
1.3 Contrast the impact of the use of different
• Acquisition costs
warehousing equipment
• Usage costs
Approaches such as:
• Maintenance costs
• Materials handling equipment
• Operation
• Palletisation and unit loads
• Utilities
• Packing and packaging
• Training
• Environmental standards for packaging
• Disposal and end-of-life costs
• The use of automation in warehousing

3.2 Compare the factors to consider when building a total

2.0 Understand the key elements of effective inventory cost of ownership model
control • Include all costs
• Use best estimates of values available
2.1 Differentiate between the different classifications of
• Hidden costs – global sourcing, risks associated with
inventory extended supply chain
• Opening stock, work in progress, safety stock and • Only develop for larger purchases
finished goods
• Ensure senior management support
• Obsolescent and redundant stock
• Cross functional support – ensure access to data
• Direct and Indirect supplies • Team working – reduce data collection time
• ABC classifications of stock that may apply
• Dependent demand and independent demand items 3.3 Identify the contributing elements to end-of-life costs
of stock • Decommissioning
• Removal or disposal processes
2.2 Identify the direct and indirect costs of holding
• Legal aspects – waste management
inventory
• Environmental factors
• Acquisition costs
• Triple bottom line – people, planet, profit
• Holding costs
• Cost of stock outs
• Discuss options to reduce costs whilst mitigating any
negative impact on service levels

cips.org/qualifications
 C Procurement
CORE MODULE
and Supply
in Practice
CIPS GLOBAL
[L4M8]
STANDARD
1.1 • 1.2 • 1.3 • 1.4
4.2 • 11.1 • 11.2 • 11.3

CR Module purpose

On completion of this module, learners will be able to demonstrate the practical application
of the key elements of the procurement cycle in an integrated manner, within a workplace
context.
CONSTRUCTED
RESPONSE EXAM
Module aim(s)

3
Procurement is the business function that ensures identification, sourcing, access and
management of external resources that an organisation needs or may need to successfully
fulfil its strategic objectives. It exists to explore supply market opportunities and to implement
resourcing strategies that deliver the best possible supply outcomes to the organisation, its
HRS
stakeholders and customers. In today’s volatile global trading environments, it is not enough
for procurement and supply professionals to simply know the theory behind their profession;
EXAM DURATION
HOURS they must also be in a position to confidently and effectively apply that knowledge to the
benefit of the whole organisation, its stakeholders and customers. This module is designed to
test the practical application of procurement and supply concepts and ideas within the practical

120
environments which professionals are expected to perform.

HRS

MODULE
LEARNING
TIME

12 CREDITS
Credit value

21
Learning outcomes, assessment criteria and indicative content

1.0 Demonstrate the application of the procurement cycle 3.0 Demonstrate the application of whole life asset
management
1.1 Apply the key stages of the procurement cycle to the
practical procurement and supply environment 3.1 Apply whole life asset management to the practical
The practical application of the CIPS procurement and supply environment
Procurement Cycle: • Include all costs – purchase price through to disposal
• Defining business need, and end-of-life
• Market analysis and testing, • Hidden costs – global sourcing, risks associated with
• Supplier evaluation, extended supply chain
• Tendering processes, • Only develop for larger purchases
• Supplier and stakeholder management • Ensure senior management support
• Cross functional support – ensure access to data
• Team working – reduce data collection time
2.0 Demonstrate the application of the key stages of the • Decommissioning
sourcing process • Removal or disposal processes
• Legal aspects – waste management
2.1 Apply the key stages of the sourcing process to the
practical procurement and supply environment
Stages of the sourcing process: 4.0 Demonstrate the application of ethical and
• Creation of contract terms, responsible sourcing within an organisation
• Supplier selection,
• Contract award 4.1 Apply ethical and responsible sourcing to the practical
• Contract or supplier management procurement and supply environment
• Bribery, Corruption, Fraud, Human rights, Modern
slavery
• Application of the CIPS Code of Conduct
• Ethical codes of practice
• Environmental factors
• Supporting information on ethical practices in
supplier quotations and tenders
• Supplier monitoring and KPIs
• The triple bottom line – profit, people and planet
• Adopt sustainable practices, standards and
specifications in the supply chain
• Consider the social impact of the organisation’s
behaviours.
• Expand reporting frameworks to include ecological
and social performance

cips.org/qualifications
23
 About CIPS, the
Chartered Institute
of Procurement
& Supply
The professional body
CIPS, a not-for-profit organisation that exists for the public good, is the voice of the
profession, promoting and developing high standards of skill, ability and integrity among
procurement and supply chain professionals.

Quality guaranteed
Our qualifications are recognised by OFQUAL in England and regulators in various countries,
demonstrating that they meet specific quality standards.

The Global Standard

CIPS Global Standard in Procurement and Supply, which is freely available, sets the
benchmark for what good looks like in the profession.

A commercial organisation
CIPS helps governments, development agencies, and businesses around the world to excel
in procurement and supply, supporting them to improve and deliver results and raise
standards.

A global community
We are the world’s largest professional body dedicated to procurement and supply with a
global community of over 200,000 professionals in over 150 countries, and offices in Africa,
Asia, Australia, the Middle East, Europe and USA.

Global Standard Global network ...in over 150

freely available of over 200,000 countries

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Copyright ©2018 CIPS. Content may not be copied, reproduced, published, altered or transmitted in any form or by any means, in whole or in part, without the prior written permission of CIPS.L4B/FEB/2019/V3