CIPS Global Standard UK 4.0 May 2021 PDF

The Global Standard for Procurement and Supply Version 4 – Published 2021 www.cips.org Welcome What's in this guide? The benefits of working with the 04 Now in its fourt...

The Global Standard for Procurement and Supply Version 4 – Published 2021 www.cips.org Welcome What's in this guide? The benefits of working with the 04 Now in its fourth edition, the Global Standard Standard How the Standard is structured 06 for Procurement and Supply is a comprehensive Using the Standard 08 competency framework that has been developed Using the Standard online 10 through consultation with an extensive panel of CIPS Self-Assessment online 11 practitioners and academics drawn from across the INFRASTRUCTURE world to represent the diverse sectors and skill sets 1. Position and Influence 12 within the profession. 2. External Environment 20 3. Technology 28 We aim to regularly review the Standard so that it remains up-to-date and relevant to the global procurement and PROCESS supply community. The Standard has been designed to help 4. Spend Management 34 individuals and teams within organisations to understand the 5. Contracting 42 6. Sourcing 49 intrinsic value that good practice will bring to their strategic goals and serves as an aid to enhancing organisational and PERFORMANCE personal performance. 7. Delivering Outcomes 59 8. Metrics and Measurement 66 Building on the original content of previous editions, the 2021 publication includes updates to key terms and references, PEOPLE DEVELOPMENT legislation and other standards that are relevant to our 9. Developing Teams and 72 Individuals profession. 10. Developing Self and Personal 82 Skills This Standard offers consistency in behaviours and 11. Ethics 87 knowledge, showing what excellence should look like in Contributors 94 procurement and supply practice. These are the building blocks on which business can stand and succeed, and I urge boards, CEOs and stakeholders to keep this free resource to hand to understand the value of the profession and its importance and sphere of influence. We are dedicated to leading the profession and to helping to evolve procurement and supply professionalism for the future, regardless of who undertakes the associated activity. This Standard is a key tenet of achieving this goal and is a vital resource if we are to ensure that procurement professionals have the most relevant skills and knowledge to cope with volatile trading environments, the increasing complexity of global operations and the influence of digitalisation. Ultimately the content in the Global Standard supports our vision as the 'Voice and Standard' for the profession. Amanda Boustred FCMI, FIoD CIPS Group Professional Standards and Regulation Director 03  The benefits of working with the Standard Organisations and individuals can identify and measure their own performance levels in procurement and supply. ­Enhance organisational performance The Standard can be used to produce a detailed analysis by benchmarking procurement professionals against the knowledge and competencies. It identifies gaps in team capability and corresponding development needs, therefore enabling organisations to: Contribute to significant savings by putting in place a procurement team development plan. Put in place cost-effective, targeted training and development to plug gaps and meet organisational needs. Build a cadre of well-trained and motivated staff, reducing turnover and making associated cost savings. Provide objective and measurable evidence of effective management in the procurement function to senior managers, the board and shareholders. Influence and improve ethical practices in the supply chain through implementing ethical procurement policies and practices across an organisation. Enhancing personal performance The Standard can help to identify current competency levels and the knowledge and capabilities needed to move onto the next career stage; this may be particularly useful during a performance review as it enables individuals to: Develop and agree a personal development plan to address the gaps identified in knowledge and capabilities. Implement the plan, including training, job shadowing and mentoring opportunities. Continue to monitor progress against the plan by referring back to the Standard to assess improvement. www.cips.org Creating procurement job descriptions, advertising and performance reviews Within each of the five levels of competency described in the Standard – Tactical, Operational, Managerial, Professional and Advanced Professional – we have provided detailed sample job designs online, including which capabilities an individual should have at each competency level, providing invaluable guidance in preparing job advertisements, writing job descriptions and carrying out performance reviews. This guide will help organisations and individuals to understand: How an organisation can use the How an SME can use the Standard standard to improve procurement to support their procurement performance. function and related activities. How an individual can use How to write job descriptions and the standard to improve their advertisements. performance in the workplace. 05 How the Standard is structured The Standard has been developed using five competency levels which have been identified from Tactical through to Advanced Professional. These levels represent the core skills and tasks that individuals should be capable of at each advancing stage of the profession. The knowledge and capabilities can then be identified within the four pillars and eleven themes for procurement and supply. 1. The five levels of competence Advanced Professional Professional Managerial Operational Tactical Applies key tasks Provides advice and Develops, Formulates direction Leads procurement associated with the guidance to key improves and fulfils and advice, manages teams within an work of procurement stakeholders on organisational and change, and leads organisation and and supply. the performance functional objectives and influences both influences the board of organisational in procurement and internal and external to adopt leading-edge procedures and supply. stakeholders in procurement strategies processes connected procurement and and establish best with procurement and supply. practice. Influences supply. supply markets with innovative sourcing solutions. Administrative Buyer, Procurement Senior Buyer, Chief Strategic Procurement Procurement Director, Assistant, Purchasing Executive, Buyer, Category Manager, Senior Supply Chain Director, Assistant, Contracts Procurement Specialist, Manager, Contract Category Manager, Commercial Director, Administrator, Stock Contracting Officer, Manager, Contract Supply Chain Manager, Head of Sourcing, Chief Controller, Inventory Supply Chain Analyst. Officer, Logistics Head of Logistics and Procurement Officer. Planner, Assistant Manager and Supply Operations Manager. Buyer and Assistant Chain Executive. Contracts Officer. Use the Standard online globalstandard.cips.org www.cips.org 2. The four pillars and eleven themes for effective procurement and supply are further divided into individual segments of key knowledge and capability. People Infrastructure Process Performance development 1 4 7 9 Position and Influence Spend Management Delivering Outcomes Developing Individuals and Teams 2 5 8 10 External Environment Contracting Metrics and Measurement Developing Self and Personal Skills 3 6 11 Technology Sourcing Ethics in Procurement and Supply This granularity of information is key to identifying not only the professional knowledge and capabilities required at the Knowledge different competency levels, but also how they will be applied to the practical workplace. Capabilities Use the Standard online www.cips.org/careers 07  Using the Standard The Standard can be used to identify the performance level of any individual, anywhere in the world, who has a responsibility for procurement full time or as part of their job role including those with: Day-to-day responsibility for managing the procurement and supply function within an organisation Strategic responsibility for ensuring the procurement and supply function complements and enhances the overall goals of the organisation No dedicated procurement function or a job role that e ­ ncompasses other responsibilities and professional disciplines, such as administration, project support or finance. www.cips.org By identifying individual competency levels, the Standard enables organisations to assess how efficiently, effectively and ethically procurement is being carried out.­­­­­ For private sector organisations...measuring procurement teams against the Standard can help to improve organisational performance, in terms of cost-effectiveness, compliance with ethical best practice and legislation, and the reputation of procurement in itself with internal senior managers, board members, suppliers, customers and competitors. For public sector organisations...the Standard supports the cost-effective and efficient use of funds that is so important for public servants, government ministers and members of the general public, who are anxious to see ethical and good use of public money. For individuals...measuring their own knowledge and capabilities against the competency levels in the Standard helps to identify development needs, prepare for performance management or reviews and plan a career development programme. Go online www.cips.org/careers 09 The Standard online Developing and planning a professional development journey couldn’t be easier. So far, over 75,000 professionals have used the Standard online to help with career development planning. Global Standard for Procurement and Supply Step1: Choose a Level Choose a Level Global Standard for Procurement and Supply Tactical Step1: Choose a Level Operational Choose a Level Managerial Tactical Professional Global Standard for Procurement and Supply Operational Global Standard for Procurement and Supply Managerial Advanced professional Step1: Choose a Level Step1: Choose a Level Choose a Level Professional Tactical Choose a Level Advanced professional Operational Tactical Managerial Operational Professional Managerial Advanced professional Professional Advanced professional Go to globalstandard.cips.org and follow the simple steps as illustrated below. Step 1 Step 2 Step 3 Step 4 Choose your level of Choose a Choose a segment Review your chosen competency theme from the theme segment and follow the related links to CIPS Knowledge, tools and resources to help fill your knowledge and skills gap. www.cips.org CIPS self-assessment online Individuals can align themselves against the Standard and plan their next career move. ­­ Using hundreds of live job roles advertised throughout the world, we’ve created over 40 job profiles and mapped each role against the Standard Our online self-assessment is themes and levels. By assessing their own skills and knowledge it helps a free member resource that individuals to truly demonstrate their relevance and increase their value provides in-depth procurement to employers. knowledge and capability analysis that identifies levels of Firstly, individuals explore the knowledge and capabilities identified competency to inform future in the Standard then self-assess their own skills against the Standard, development opportunities. create their own profile and measure it against the other procurement To self-assess your level of job profiles. At the end of the assessment a personalised report will help competency we recommend to create a learning and development plan. that you read through each theme then select your level based on your understanding. You can then review your job profile to see if it matches your actual competency level. Go online www.cips.org/careers 11  Pillar: Infrastructure Standards Theme 1: Position and Influence of Procurement and Supply This theme helps individuals to recognise the contribution that effective procurement and supply can make in organisations and in supply chains. The sphere of influence of procurement and supply chain personnel and functions should be promoted to all stakeholders, as the theme identifies good practices to achieve greater recognition by individuals and teams at an organisational level. TACTICAL COMPETENCY LEVEL Segment 1.1 Understanding the Role of Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The different terms that relate to procurement, supply Explain the roles of procurement, supply chain chain management and logistics management management and logistics management to colleagues across the organisation The roles of procurement and value of procurement and Explain the roles and value of procurement and supply to supply to organisations colleagues across the organisation The impact of procurement activity on costs, efficiency Demonstrate the contribution of effective procurement and profitability across the organisation in improving profitability, savings and efficiencies for the organisation The typical proportion of costs accounted for by the Demonstrate and create the typical proportion of costs procurement of goods and services and budgets accounted for by the procurement of goods and services to colleagues and across the organisation The 5 rights that relate to procurement and supply Explain how the 5 rights apply to commercial transactions Price/cost or agreements Quality Time Quantity Place Internal and external customers and their priorities for Identify the different internal and external customers and procurement and supply recognise the priorities for procurement and supply of different customer groups The main internal and external stakeholders in Identify the stakeholders that can influence the work of procurement and supply and how they influence procurement and supply procurement and supply activities The different objectives of a procurement and supply Promote commitment amongst colleagues and function stakeholders to achieve the objectives sought by a procurement and supply function Policies and procedures for procurement and supply Promote the organisation's procurement and supply activities policies and procedures to stakeholders The tiers of a supply chain Identify and assess the different organisations that Different types of procurement, such as: are involved in the organisation's supply chain. Capital and revenue purchases procurement Advise internal stakeholders on the different types of Products, services and construction works procurement typically contracted for by the organisation Direct and indirect Outsourcing and insourcing www.cips.org  TACTICAL COMPETENCY LEVEL Segment 1.2 Apply Procedures that Regulate Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The documentation typically used in procurement Advise colleagues across the organisation about the and supply documentation used in procurement and supply. Requisitions Maintain documents relating to procurement and supply Orders across the organisation Delivery notes Invoices Other documents The use of documented policies and procedures for the Take appropriate action to ensure internal customers and work of procurement and supply, including: stakeholders comply with procedures The responsibilities for procurement Regulations relating to competition Levels of delegated authority Responsibilities for the stages of the sourcing process Invoice clearance and payment The need for authorisation in the administration of Work to ensure that internal stakeholders obtain requisitions, orders and invoices authorisation for the commitments to requisitions, orders and invoices The need for effective communication with suppliers and Use clear and effective verbal and written communication customers, verbally and in writing, to clarify and confirm methods when dealing with suppliers and customers understanding of requirements The use of technology to effectively and efficiently Use technology to communicate effectively and efficiently communicate with internal and external stakeholders with internal and external stakeholders How to ensure requisitions, orders and invoices are Work to ensure that requisitions, orders and invoices and a clear and accurate record of requirements, to help other documentation relating to procurement and supply communication with stakeholders are clear and accurate The use and importance of ethical codes in procurement Encourage the behaviour and actions of colleagues and and supply other stakeholders to be in keeping with ethical codes for procurement and supply The principles of corporate governance that apply to Explain the main principles of corporate governance procurement and supply that apply to the organisation’s procurement and supply function For more details on Value see Theme 4 Spend Management in Procurement and Supply 13  OPERATIONAL COMPETENCY LEVEL Segment 1.3 Advising Stakeholders on the Role of Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The contribution internal and external stakeholders make Research, assess and prioritise stakeholders' to procurement and supply activity requirements to ensure value outcomes and risk-assured solutions The potential conflicts of interest that may exist in the Manage any conflict of interest that may arise with work of procurement and supply, and processes to stakeholders to ensure the objectives of procurement manage potential conflicts of interest and supply are prioritised The use of documented policies and procedures for the Advise stakeholders on the interpretation of procedures work of procurement and supply, including: for procurement and supply Responsibilities for procurement and supply Regulations relating to competition Levels of delegated authority Responsibilities for the stages of the sourcing process Invoice clearance and payment Procedures for the separation and segregation of duties Advise internal stakeholders of the procedures that apply to the separation and segregation of duties in performing roles in procurement to prevent fraud and error The use of codes of ethics in procurement and supply Monitor the work of internal stakeholders to ensure that the codes of ethics in procurement and supply are upheld Comparisons of centralised, devolved and hybrid Explain to colleagues and other internal stakeholders organisation structures for carrying out procurement and the organisation structures that can be adopted for supply activities procurement and supply activities, while recognising the strengths and weaknesses of each structure The use and purposes of financial budgets that impact on Advise internal stakeholders on procurement and supply procurement and supply issues that impact on the creation and management of financial budgets The impact of procurement and supply operations on the Advise appropriate stakeholders on the implications of organisation's and suppliers' cash and working capital the organisation's and suppliers' cash and working capital through procurement and supply activities For more details on Building Relationships with Stakeholders, see Theme 9 Developing Individuals and Teams www.cips.org  OPERATIONAL COMPETENCY LEVEL Segment 1.4 Improving the Role of Procurement and Supply within the Organisation Knowledge: Will know and understand: Capabilities: Will be able to: The design of typical organisation structures and Promote the position and potential influence of procure- the position of procurement and supply within the ment and supply within the organisation organisation The main influences that shape an organisation's Identify the influences that shape the organisation by behaviour considering the behaviours adopted by individuals, groups and stakeholders The behavioural characteristics of individuals that impact Recognise the different behavioural characteristics on their management style with the procurement and of individuals and how these differences can shape supply chain function management style appropriate to different situations The importance of motivation for individuals involved in Motivate and support colleagues and other internal the procurement and supply function stakeholders to achieve their commitment to the work undertaken in procurement and supply The importance of the use of documented policies and Contribute to the development and use of documented procedures for the work of procurement and supply, policies and procedures for the procurement and supply including: function and ensure their application by colleagues and The responsibilities for procurement stakeholders Regulations relating to competition Levels of delegated authority Responsibilities for the stages of the sourcing process Invoice clearance and payment The role of centralised, devolved and lead buying Explain to colleagues across the organisation the advan- structures for procurement and supply functions tages and disadvantages of centralised, devolved and lead buying structures for procurement and supply For more details on Improving Performance, see Theme 7 Delivering Outcomes 15  MANAGERIAL COMPETENCY LEVEL Segment 1.5 Developing Supply Chain Management Knowledge: Will know and understand: Capabilities: Will be able to: Sources of competitive advantage, such as low cost, and Ensure the procurement and supply function aligns sources of differential advantage, such as innovation, with the achievement of the organisation's sources of product/service range, brand image and customer care competitive advantage Methods of value creation that can be achieved from Create and implement plans with stakeholders to effective supply chain management through: increase value from supply chain management Reducing prices and total costs Improving quality Reducing time to market and achieving deliveries to required timescales Creating innovation Reducing risk and supply chain vulnerability Promoting sustainable procurement The methods to develop integrated supply chains, supply Liaise with stakeholders to develop supply chains, supply networks and supply chain management networks and supply chain management The benefits and risks of using collaborative and Work with stakeholder to develop and implement competitive strategies for improving supply chain appropriate strategies and plans for improving supply management chain management and promote their use The main risks that can impact on supply chains and how Work with stakeholders to mitigate or manage risks that they can be mitigated can impact on supply chains The importance and application of the standards and Work with stakeholders to eliminate bribery, corruption legislation that apply to bribery, corruption and fraud in and fraud in supply chains organisations The effective use of communication technologies to Guide stakeholders to use technologies that help effective achieve business outcomes communication to support the achievement of supply chain business outcomes For more details on Systems and Technology, see Theme 3 Technology www.cips.org  PROFESSIONAL COMPETENCY LEVEL Segment 1.6 Leading the Procurement and Supply Function Knowledge: Will know and understand: Capabilities: Will be able to: The use of vision statements to improve procurement Create and implement an appropriate vision for the and supply chain management organisation that promotes procurement and supply chain management both internally and with external stakeholders The roles of a leader and the activities of leadership in the Demonstrate effective leadership skills with stakeholders procurement and supply function by developing, communicating and promoting the purpose, values and vision of improved procurement and supply chain management across the organisation and with suppliers The importance and assessment of the sources of power Steer the procurement and supply chain function through among internal and external stakeholders difficulties and challenge, recognising the sources of power among internal and external stakeholders and managing the impact on the organisation and its supply chains Leadership behaviours and styles Demonstrate leadership behaviours and styles to promote procurement and supply chain management with internal and external stakeholders The distinction between transformational and Steer the procurement and supply chain function by inspirational leadership skills adopting appropriate leadership skills to promote procurement and supply chain management with internal and external stakeholders Difficulties and challenges to the function from Promote the benefits of the procurement and supply stakeholders chain function to stakeholders dealing with difficulties and challenges Techniques for stakeholder mapping including primary, Evaluate stakeholders and execute plans to achieve secondary and key stakeholder classifications effective procurement and supply chain management The use of communication plans to enhance Create communication plans to achieve buy-in to procurement and supply chain management the procurement plan from internal and external stakeholders The importance of an expenditure approval process Develop a policy and procedure for procurement and supply expenditure approvals The impact of policy, legislative and regulatory Communicate to stakeholders an understanding of requirements on procurement and the supply chain policy, legislative and regulatory requirements affecting procurement and the supply chain The application of procedures and governance affecting Develop and implement relevant procedures and procurement and supply chain activities governance for effective procurement and supply chain activities with stakeholders For more details on Leadership, see Segment 9.7 in Theme 9 Developing Individuals and Teams, and Segment 10.5 in Theme 10 Developing Self and Personal Skills 17  PROFESSIONAL COMPETENCY LEVEL Segment 1.7 Developing the Strategy for Procurement and Supply within the Organisation Knowledge: Will know and understand: Capabilities: Will be able to: The main characteristics of strategic decisions in Use and apply strategic decision-making techniques to organisations formulate improvements to procurement and supply chain management The alignment of corporate, business and Contribute to the development and implementation of functional levels of strategy in organisations functional, business unit and corporate strategies A range of approaches to the development of strategy in Evaluate the different approaches to strategy organisations including: development and ensure that relevant issues, aligned Rational planning to the needs of the organisation, contribute to the Emergent and logical incrementalism development and implementation of strategy within the procurement and supply chain function The impact of globalisation on the development of Design and implement strategies for the procurement strategy for effective Procurement and Supply and supply chain function that take account of the impact of globalisation The contributions the procurement and/or supply Promote the contributions that the procurement or chain functions make to the achievement of corporate supply chain functions can make to achieving corporate objectives objectives across the organisation, with stakeholders and with the supply chain Corporate governance for Procurement and Supply Work with internal stakeholders to establish an appropriate and effective process and framework to support corporate governance The main methods for achieving cultural acceptance of Develop and implement plans and actions with strategies in organisations stakeholders to achieve the cultural acceptance of strategies that reflect effective procurement and supply chain management The importance of measuring the return on investment Evaluate how change management processes can of procurement and supply chain activities address resistance to change and develop a change management strategy that deals with resistance to change For more details on Change Management, see Theme 10 Developing Self and Personal Skills www.cips.org  ADVANCED PROFESSIONAL COMPETENCY LEVEL Segment 1.8 Building Strategic Relationships with Stakeholders Knowledge: Will know and understand: Capabilities: Will be able to: The impact of policy, legislative and regulatory Uphold and explain policy, legislative and regulatory requirements on the supply chain requirements affecting the supply chain to suppliers and stakeholders Procurement and supply as a consulting process with Assess and manage stakeholder expectations through a internal stakeholders controlled and value adding process The differences between consulting and counselling, Develop and implement approaches to convince and the importance of consulting skills as a means to colleagues and other stakeholders to agree to plans or influence organisational change take advice, and to achieve early engagement in strategic issues affecting procurement or the supply chain Approaches to managing relationships with external Promote effective relationships with suppliers and suppliers and internal stakeholders internal stakeholders to secure their commitment to processes, systems, practices and strategy objectives The range of influencing styles that can be used with Adopt appropriate influencing styles so that stakeholders stakeholders accept change, strategies or advice Negotiation strategies and styles Apply effective negotiation styles and strategies to further the aims of the procurement/supply chain function with stakeholders and suppliers The use of emotional intelligence in building effective Apply different aspects of emotional intelligence to relationships improve relationships with stakeholders Approaches to developing a competitive advantage Attract and retain the best suppliers to build competitive through developing supplier relationships products, services and supply chain advantage The strategic importance for stakeholders of measuring Evaluate return on investment assessments for changes return on investment in procurement and supply that impact procurement and supply activities For more details on Teams, see Segment 9.2 in Theme 9 Developing Individuals and Teams 19  Pillar: Infrastructure Standards Theme 2: External Environment in Procurement and Supply This theme enables individuals to recognise how the external environment influences procurement and supply. Personnel working in procurement and supply roles need to understand how markets can be influenced by changes in the external environment to enable appropriate actions to be taken to ensure that the organisation can develop opportunities, ensure compliance to regulatory standards and minimise disruption with its suppliers and supply chains. TACTICAL COMPETENCY LEVEL Segment 2.1 Recognise the Different Sectors of Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The roles of private, public and third sector organisations Explain the roles of private, public and third sector organisations, recognising the sector that the organisation, its suppliers and customers operate within Recognise the objectives of private sector organisations, Recognise the objectives of private sector organisations, their suppliers and their customers their suppliers or their customers The different types of private sector organisations Identify the types of private sector organisation that the such as: organisation deals with, either as a supplier or customer, Sole traders recognising the strengths and weaknesses of each type of Partnerships organisation Registered companies Incorporated and unincorporated companies Small and medium sized enterprises (SMEs) Multinational corporations The objectives of public sector organisations to improve Recognise the impact the public sector may have on services to the public such as: organisations, its suppliers and its customers Providing access to services Regulating organisations and individuals The primary, secondary and tertiary sectors Identify the characteristics and sector that the organisation, its suppliers and customers operate within www.cips.org  TACTICAL COMPETENCY LEVEL Segment 2.2 Recognise the Importance of the External Environment on Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: How markets can be defined in terms of size, scope and Identify the types of markets served by the organisation, stages of development its suppliers and customers The types of industry competition, such as perfect Recognise the type of competition that influences and competition, imperfect competition, oligopoly, duopoly impacts the organisation, and its suppliers and customers and monopoly How demand and supply factors impact on organisations Recognise the potential impact of changing demand and supply factors resulting from disruptive supply chains and global events on the organisation, its suppliers and customers The impact of market change on organisations Identify how local, national and global market change can impact on the pricing and availability of products and services Analytical tools to explain the impact of the external Describe how the application of STEEPLED (social, environment on organisations’ supply chains such as: technological, economic, environmental, political, STEEPLED legislative, ethical and demographic) criteria and the five The five forces model forces model impact on an organisation, and its suppliers and customers Organisational impact of macro-economic factors such Identify the impact of interest rates, inflation, exchange as: rates and the level of economic activity (GDP/GNP) on Interest rates pricing and availability of products and services Inflation Exchange rates Level of economic activity (GDP/GNP) Legislation that impacts on organisations such as: Explain the impact of legislation on an organisation, its Quality environmental standards suppliers and customers Health and safety Employment law The implications of corporate social responsibility on Explain the key aspects of corporate social responsibility organisations that influences an organisation, its suppliers and customers For more details on Global Supply Chains, see Theme 7 Delivering Outcomes 21  OPERATIONAL COMPETENCY LEVEL Segment 2.3 Understanding Market Management in Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The different types of markets including economic and Distinguish how an organisation, its suppliers and industrial sectors such as: customers are served by different types of markets Manufacturing Construction Retail Financial Agriculture Services The competitive forces that influence markets, including Analyse the competitive forces and trends that influence the bargaining power of suppliers and buyers, the markets that the organisation, and its suppliers and availability of substitutes and the threat of new entrants customers operate within How to identify supply chain disruptors that impact on Liaise with stakeholders to mitigate the impact of supply markets and supply chains chain disruptors on the organisation, and its customers and suppliers The breakdown between direct and indirect costs Collate sources of information to estimate the breakdown of direct and indirect costs for goods and services and use the information to prepare budgets or to negotiate prices Types of published data that can provide information on Research market data and use it to estimate and nego- costs and prices tiate current and future prices and costs for goods and services Published reports and indices on markets Use published sources of information to agree variations in pricing for goods and services National and international legislation that impacts on Advise internal stakeholders on the impact of legislation organisations such as: when dealing with suppliers to an organisation Quality standards Health and safety Environmental standards Employment law The implications of corporate social responsibility on Advise stakeholders on key aspects of corporate social organisations responsibility of the organisation when dealing with suppliers, customers and other stakeholders For more details on Corporate Social Responsibility, see Theme 11 Ethics www.cips.org  MANAGERIAL COMPETENCY LEVEL Segment 2.4 The Impact of Globalisation on Supply Chains Knowledge: Will know and understand: Capabilities: Will be able to: The main drivers of globalisation in supply chains Identify and explore opportunities for globalisation in the procurement of goods and services Potential conflict between the needs of stakeholders Contribute to the management of the procurement and operating with globalised supply chains and certain supply chain function taking steps to mitigate challenges methods of management and difficulties to resolve conflict within the organisation and with its supply chains The main implications of ethical and sustainable Advise colleagues and other stakeholders on how to procurement in supply chains promote ethical and sustainable procurement in the organisation and its supply chain The main cultural and social issues in supply chains, such Advise colleagues and other stakeholders on cultural and as: social issues that can affect supply chains Language and cultural barriers Labour standards and workers rights Inequalities between workers Health and safety and environmental standards Minimum/fair wages Modern slavery Labour codes that impact on the globalisation of supply Develop and implement plans that address the implica- chains such as standards set by the United Nations tions of labour standards that impact on the globalisation (UN), the International Labour Organisation (ILO), the of supply chains Ethical Trading Initiative (ETI) and Social Accountability International standard SA8000 The impact of customs unions, trade areas and trade Evaluate the impact of customs unions, trade areas and blocs such as: trade blocs have on any restrictions or opportunities for European Union (EU) global sourcing European Free Trade Association (EFTA) East African Community (EAC) African Union (AU) United States-Mexico-Canada Agreement (USMCA) For more details on Global Supply Chains, see Theme 7 Delivering Outcomes 23  PROFESSIONAL COMPETENCY LEVEL Segment 2.5 Contexts of Supply Chain Management Knowledge: Will know and understand: Capabilities: Will be able to: The impact of social, technical, economic, environmental, Identify the potential impact of STEEPLED criteria on the political, legislative, ethical and demographic (STEEPLED) organisation and its supply chain and draw up plans to criteria on organisations and their supply chains maximise the benefits and mitigate difficulties The impact of market change, supply chain shocks and Advise colleagues and other stakeholders on the impact disruption on supply chains of market change on the supply chain The main regulations that impact on the employment of Evaluate the impact of the main regulations on the people in supply chains such as: employment of people in supply chains and develop Discrimination, equality and diversity plans to mitigate potential difficulties caused by Employee redundancy and dismissal regulations Working time and staff payment International labour codes Health and safety at the workplace Minimum/fair wages Modern slavery Other country specific employment issues The impact of mergers and acquisitions on supply chains Evaluate the potential effect of mergers and acquisitions on the organisation’s supply chains and develop plans to maximise benefits and minimise disruption The effect of competition law on supply chains Analyse the effect of competition law on the organisation and its supply chains to ensure compliance with competition law Regulatory requirements such as price and service Evaluate the implications of regulatory requirements controls exercised by industry regulators and such as price and service controls exercised by industry international bodies regulators and international bodies The role of suppliers as key resources for the supply of Establish effective performance objectives by assessing products and services and for new product development internal and external resources and associated dependencies to create procurement plans for work with suppliers For more details of Competition Law and other Legal Aspects, see Theme 5 Contracting www.cips.org  PROFESSIONAL COMPETENCY LEVEL Segment 2.6 Managing the Challenges of Global Supply Chains Knowledge: Will know and understand: Capabilities: Will be able to: The application of STEEPLED analysis in globalised supply Evaluate the impact of STEEPLED factors on globalised chains supply chains and formulate recommendations to ensure the organisation's strategy develops opportunities and mitigates risks that result from changes to STEEPLED factors Standards that apply to ethical/sustainable sourcing and Monitor compliance with ethical practices and standards human rights, including labour codes that impact on the that apply to global supply chains, taking appropriate globalisation of supply chains such as: actions if any breaches by colleagues or other United Nations (UN) Trafficking Protocol stakeholders are detected International Labour Organisation (ILO) Ethical Trading Initiative (ETI) Social Accountability International Standard SA8000 ISO 20400 Sustainable Procurement ISO 26000 Social Responsibility Licensing and documentation for imports and exports Monitor and ensure compliance with the licensing and documentation for imports and exports that affect the organisation Controls through tariffs and duties on imports and Provide advice to colleagues and other stakeholders on exports the impact of tariffs and duties on imports and exports arranging appropriate actions when necessary The methods for managing the volatility of Evaluate and implement the use of appropriate commodities and currencies in supply chains such as: instruments to manage the volatility of commodities and Hedging currencies in supply chains Spot Forward Derivative Other instruments The main regulations that impact on the employment of Evaluate the impact of the main regulations on the people in global supply chains such as: employment of people in global supply chains Discrimination, equality and diversity Employee redundancy and dismissal Working time and staff payment International labour codes Health and safety at the workplace Minimum/fair wages Modern slavery Other country specific employment issues For more details on Global Supply Chains, see Theme 7 Delivering Outcomes, and on Ethical Procurement, Theme 11 Ethics 25  ADVANCED PROFESSIONAL COMPETENCY LEVEL Segment 2.7 Strategy in the Organisation and its Supply Chain Knowledge: Will know and understand: Capabilities: Will be able to: The levels of strategy in organisations – corporate, Contribute to the development and implementation of business unit and functional business and corporate strategies through added value procurement and supply chain management The layers of the business environment and the impact ­ dvise colleagues and other stakeholders on the impact A on the development of procurement strategy of the business environment on the organisation and its supply chains The challenges that impact different industries and Evaluate the challenges faced by the organisation and sectors and the trends in the macro-environment its supply chains taking actions to mitigate risks and to develop opportunities The impact of changing markets, market volatility and Develop approaches to mitigate the impact of changing supply chain disruptors on supply chains markets on supply chains and take actions to exploit market opportunities Cycles of competition and competitive strategies Critically assess pricing and competitive behaviour undertaken by organisations in the supply chain and take actions to improve or protect the organisation’s interests The segmentation of markets Develop and implement the alignment of market segmentation undertaken by the organisation with its customers and suppliers Modelling for the creation of strategic directions Critically assess the divergence of strategies undertaken by organisations in a supply chain and advise senior managers on strategies that can be adopted by the organisation Approaches to strategy evaluation Recommend strategic choices to improve the organisation’s short and long term performance Drivers of globalisation and international strategies Evaluate opportunities to deploy favourable global strategies The innovation - entrepreneurship framework and the Evaluate the value added activities of the organisation’s contributions of supply chain supply chains and take actions to increase value Methods of pursuing strategies such as: Critically assess the developments in strategies adopted Organic development by suppliers and advise senior managers on strategy Strategic alliances options Mergers and acquisitions Offshoring/onshoring Outsourcing/in-sourcing Make vs Buy analysis The protection of intellectual property in the supply chain Advise colleagues, suppliers and other stakeholders on issues affecting the supply chain relating to the development and retention of intellectual property rights The impact of mergers and acquisitions on supply chains Evaluate the effect of mergers and acquisitions on the organisation and its supply chains and develop plans to maximise benefits and minimise disruption The use of business continuity planning to assess Assess suppliers' business continuity plans to mitigate the financial impact and other risks to mitigate supply chain financial impact and other risks that might be caused by interruption disruption to the organisation's supply chains www.cips.org ADVANCED PROFESSIONAL COMPETENCY LEVEL Segment 2.8 Finance in the Organisation and its Supply Chain Knowledge: Will know and understand: Capabilities: Will be able to: Sources of short term and long term finance Critically assess the financing options used by the organisation and its supply chain and suggest actions to mitigate financial risks The analysis and interpretation of financial statements Monitor the impact of the supply chain on the financial stability of the organisation and mitigate financial risks The management of working capital Critically assess the impact of the supply chain on the organisation’s working capital and liaise with senior managers to work to ensure financial liquidity to mitigate financial risks The use of spot, forward and derivative instruments in Evaluate and implement the use of appropriate foreign exchange for managing the volatility of currencies instruments to manage the volatility of commodities and commodities in supply chains and currencies in supply chains The sources of finance and the cost of capital and capital Monitor the impact of the sources of finance and the cost structure of an organisation of capital on the supply chain, taking decisions that will support the organisation's cash flow objectives Dividend policies and shareholder value Assess the impact of dividends and shareholder value on the financial performance of key suppliers or customers Mergers, takeovers and the valuation of shares Advise senior managers on the impact of mergers or takeovers on the supply chain and on the organisation The implications of company location on corporate Advise senior managers on the impact of company taxation location on corporate taxation and how this affects the organisation or its supply chains Analysis of funding options such as equity, joint ventures, Develop or contribute to business cases and advise senior seed funding and outright acquisition management on supply chain investment decisions to secure supplier innovation/intellectual property/delivery capacity The use of open book costing and adjustments Create policies and processes to understand cost through the use of open book costing, making adjustments for relevant categories of supply The impact of procurement and supply operations on the Advise appropriate stakeholders on the implications organisation's cash position and working capital of the organisation's cash position and working capital through procurement and supply operations 27  Pillar: Infrastructure Standards Theme 3: Technology in Procurement and Supply This theme enables personnel working in procurement and supply to develop their capabilities in the use of systems, to identify opportunities for the development of systems technology to improve procurement and supply chain management. The impact of internet based technologies and the use of data base information technology systems is key to the ability of the organisation to manage its expenditures on goods and services. TACTICAL COMPETENCY LEVEL Segment 3.1 Understanding Systems for Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: How to use systems technology and databases for Input data into systems to perform key tasks linked to ordering and how this contributes to procurement and placing orders and other transactions in procurement supply and supply The importance of capturing data on expenditure and Identify, input and update into systems for controlling keeping systems up to date the procurement of goods and services, and inform colleagues and/or internal stakeholders when more data is required How to provide accurate data and why demand Ensure systems are updated with accurate data to meet management is important in procurement and supply organisational information needs, while following organi- sational processes and procedures The use of the internet, intranets and extranets in Promote the use of the internet, intranet or extranet effective procurement and supply management systems for performing tasks that relate to effective procurement and supply management How to use the internet to locate details about suppliers Use the internet to investigate information about suppli- and customers and how this helps processes in ers, customers or other stakeholders procurement and supply eSourcing and eTendering systems used in procurement Promote the use of E-sourcing or E-tendering systems and supply to: to internal stakeholders to perform key tasks in Promote contract opportunities procurement and supply Pre-qualify suppliers Receive and evaluate quotations and tenders The use of Purchase to Pay (P2P) systems including Use and explain to internal stakeholders Purchase to Pay eRequisitioning, eCatalogues, eOrdering and (P2P) systems to perform key processes in procurement eInvoicing, and their contribution to processes in and supply procurement and supply The use of mobile technologies, video conferencing and Use, promote and advise on the use of mobile technol- collaboration tools to communicate with stakeholders ogies, video conferencing and collaboration tools for communication with stakeholders www.cips.org OPERATIONAL COMPETENCY LEVEL Segment 3.2 Using Systems for Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The use of systems, video conferencing and collaboration Work to ensure systems, video conferencing tools that enhance internal and external communications and collaboration tools for internal and external with stakeholders for procurement and supply communications in procurement and supply are used and promoted The use of Purchase to Pay (P2P) systems in procurement Operate and promote the use of P2P systems for key and supply such as: processes in procurement and supply eRequisitioning eCatalogues eOrdering eInvoicing The use and development of eMarket places Make use of and promote to stakeholders the benefits for the organisation of relevant eMarket places and Trading Exchanges eSourcing and eTendering portals in Provide guidance to stakeholders and promote the use of procurement and supply use of eSourcing or eTendering software in procurement and supply The use of eAuctions in sourcing processes Identify opportunities for the use of eAuctions and organise eAuctions for relevant procurement activity The use of systems for the control of inventory Operate and promote the use of systems for inventory control The use of enterprise resource management (ERP) or Guide colleagues and other stakeholders and promote other systems for procurement and supply activities the use of ERP or other systems for procurement and supply activities 29  MANAGERIAL COMPETENCY LEVEL Segment 3.3 Developing Systems for Procurement and Supply Knowledge: Will know and understand: Capabilities: Will be able to: The use of ERP and other procurement systems and data Evaluate the capabilities of ERP and other procurement bases for procurement and supply activities systems and databases for procurement and supply activities, and make recommendations to senior managers on the development and implementation of systems Development of P2P systems used in procurement and Investigate the use of P2P systems used in procurement supply including: and supply and make recommendations to senior eRequisitioning managers on their development and implementation eOrdering eInvoicing The development of eCatalogues in procurement and Investigate and make recommendations to senior supply and how these can enhance key procurement and managers on the development of eCatalogues that can supply processes be applied to procurement and supply The development of eMarket places in the supply chain Explore opportunities for the use of eMarketplaces to improve access to supplies and to improve outcomes for the organisation The use of data analytics in relation to supply chains to Work with key stakeholders, suppliers and customers assist with planning, forecasting, decision making and to create data and reporting that improves spend control transparency and supports informed decision making. Be able to resolve issues where the data gathered is not sufficient The application of data integrity for effective procurement Examine the standards of data integrity in the use of and supply decisions procurement and supply database systems and make recommendations for improvements to colleagues and other stakeholders The use of integration tools in systems technology in Explore improvements that can be made to integrate procurement and supply both internal systems and systems across supply chains through data integration technology and make recommendations to colleagues and other stakeholders Developments such as: Assess developments in technology and make recom- Cloud computing mendations to colleagues and other stakeholders for Open-source software technologies that will improve procurement and supply Mobile telecommunications Remote working Video conferencing and collaboration tools Blockchain technology Convergence of technology platforms The use of business continuity planning to mitigate supply Assess suppliers’ business continuity plans to mitigate chain interruption disruption to the organisation’s supply chains www.cips.org PROFESSIONAL COMPETENCY LEVEL Segment 3.4 Develop the Use of Technology for Effective Procurement and Supply Chain Management Knowledge: Will know and understand: Capabilities: Will be able to: The use of systems to enable the organisation to better Identify opportunities for the development of systems control of expenditure with suppliers to enable the organisation to better control expenditure with suppliers How to develop and implement projects to improve Create and implement projects to systems that enhance systems capabilities for the organisation capabilities in procurement and supply Ways of improving data analytics and data capture to Investigate opportunities to improve data analytics achieve effective procurement and supply and data capture to clearly define and add value in procurement and supply, making appropriate recommendations to senior managers and other stakeholders How to improve systems integration within the Identify opportunities for systems integration within the organisation or a merged/acquired organisation organisation to improve procurement and supply, making appropriate recommendations to senior managers and other stakeholders How to improve systems integration with the Investigate opportunities to improve data analytics organisation's supply chains and data capture to clearly define and add value in procurement and supply, making appropriate recommendations to senior managers and other stakeholders 31  ADVANCED PROFESSIONAL COMPETENCY LEVEL Segment 3.5 Improving Systems Capabilities for Supply Chain Management Knowledge: Will know and understand: Capabilities: Will be able to: The use of bespoke systems and commercial off-the-shelf Critically evaluate opportunities for the development systems (COTS) and workflows to enable organisations to of systems or procurement of commercial off-the-shelf improve control of expenditure with suppliers systems (COTS) to enable organisations to improve control of expenditure with suppliers The use of database systems, data centres and data Investigate opportunities for the development of warehousing for procurement and supply chain database systems, data centres and data warehousing management used in procurement and supply chain management and make recommendations to colleagues and stakeholders The development of big data analytics to assist decision Assess opportunities to develop and make use of big data making analytics to improve supply chain planning, forecasting and control Contemporary enterprise resource planning (ERP) and Critically evaluate the capabilities and application other procurement systems and business transformation of enterprise resource planning (ERP) and other projects, and their impact on procurement and supply procurement systems, databases and business chain management and the wider organisation transformation projects for procurement and supply chain activities, and make recommendations to senior managers on their selection, development and implementation The impact of P2P (Purchase to Pay) systems used in Maximise the use of P2P (Purchase to Pay) systems and procurement and supply chain management make recommendations to senior managers on the development and use of touchless transactions Developments in systems technologies such as: Critically assess improvements that can be made to Intranets and extranets integrate both internal technologies and systems across Data centre management supply chains through data integration and make Cloud computing recommendations to colleagues and other stakeholders Open source software Convergence of technology platforms Mobile communications Remote working Video conferencing and collaboration tools Artificial intelligence (AI) The use of integration tools and blockchain technology to Critically assess improvements that can be made to improve supply chain management integrate both internal systems and systems across supply chains through data integration or blockchain technology and make recommendations to colleagues and other stakeholders The development of business continuity plans to mitigate Work with key stakeholders to assess the business interruptions in the supply chain continuity plans created by key suppliers and provide advice on potential improvements that can be made www.cips.org ADVANCED PROFESSIONAL COMPETENCY LEVEL Segment 3.6 Improving Data Integrity in Supply Chains Knowledge: Will know and understand: Capabilities: Will be able to: Data integrity in procurement and supply chain Evaluate improvements that can be made to data management integrity for procurement and supply chain activities and make recommendations to colleagues and other stakeholders The standards and storage of data and sources of Advise colleagues, suppliers and associated stakeholders intellectual property on the standards, storage and passing of data affecting the supply chain The use of information assurance and information risk Advise colleagues, suppliers and other affected management policies to protect the privacy of data for stakeholders on issues relating to the confidentiality individuals, the organisation and the supply chain of data Legal aspects relating to the protection of data such as: Advise colleagues, suppliers and associated stakeholders Data protection on legal aspects relating to the protection of sensitive Responsible data handling data affecting the supply chain Cyber security Data disruption, the use of data resilience strategies and Assess and evaluate implications of data disruption on disruption tolerant networks the organisation and the supply chain and develop plans and processes to mitigate data disruption The use of cyber security to protect the confidentiality, Work with key stakeholders to ensure robust cyber integrity and availability of data with external security plans and processes are created and followed organisations and individuals 33  Pillar: Process Standards Theme 4: Spend Management in Procurement and Supply The spend management theme helps personnel with roles in procurement and supply to develop their capabilities in achieving value outcomes with the supply chain. All personnel associated with procurement and supply can make positive contributions to the success of the organisation through effective purchasing, effective inventory control, controlling expenditure and the use of strategic procurement and supply techniques, including category management and strategic sourcing. TACTICAL COMPETENCY LEVEL Segment 4.1 Effective Purchasing Practice Knowledge: Will know and understand: Capabilities: Will be able to: The typical proportions of organisational costs accounted Explain the importance of procurements of goods and for by procurements of goods and services services to the organisation Different types of procurements such as: Explain the mix of direct and indirect supplies that Capital and revenue purchases are procured by the organisation. Advise internal Products, services and constructional works stakeholders about different types of procurement that Direct and indirect the organisation will typically contract Outsourcing and insourcing The five rights of purchasing and definitions of value: Apply the five rights of procurement and value criteria to Price/total cost any purchase of goods or services Quality Time Quantity Place Whole-life asset management criteria, including purchase Explain how the procurement of goods or services can be price, servicing, repairs, consumables, disposal and other evaluated on the basis of whole-life asset management end-of-life costs The roles of procurement and supply professionals in Explain the importance of spending the organisation's securing value with suppliers money with suppliers to achieve best value outcomes The roles of staff with devolved responsibilities for the Identify staff with devolved responsibilities for the procurement of goods and services procurement of goods and services and explain how they can create orders and agreements with external suppliers The main pricing methods used for the procurement of Explain the advantages and disadvantages of a range of goods or services, including: pricing methods and apply these in the procurement of F