CIPS L4M6 - Supplier Relationships

In CIPS L4M6, supply risk is analysed alongside financial risk. Expensive and technically complex items are frequently bespoke or highly specialised, meaning that:

There are few alternative suppliers

Switching suppliers is difficult, costly, or impossible

This significantly increases supply risk, not reduces it. While financial risk is high due to value and complexity, supply risk is also high due to dependency and limited market availability.

The incorrect options misunderstand supply risk:

Single sourcing increases supply risk

Easy switching is rarely possible for complex supplies

High-value complex items never carry low combined risk

L4M6 Reference:

Learning Outcome 2: Understand supply chain risk and resilience

Topic: Financial risk vs supply risk

CIPS L4M6 Study Guide – Risk positioning and Kraljic portfolio thinking

In the Norming stage of Tuckman’s model of team development, teams begin to resolve their differences, appreciate each other's strengths, and respect authority. Agreement on design and role assignment indicates the team has moved past conflict (Storming) and is now functioning collaboratively, although not yet fully productive (Performing).

Comprehensive and Detailed Explanation:

The supplier relationship lifecycle comprises several stages that outline the progression of the buyer-supplier relationship. One of these stages isMeasuring, which involves assessing the supplier's performance against agreed-upon metrics and key performance indicators (KPIs). This stage is crucial for ensuring that the supplier meets the organization's expectations and for identifying areas for improvement.

Comprehensive and Detailed Explanation:

In scenarios requiring specialized expertise and collaborative input, apartnering relationshipis most appropriate. This type of relationship fosters close cooperation, shared goals, and mutual trust, enabling both parties to contribute effectively to the project's success.

Comprehensive and Detailed Explanation:

In the context of portfolio analysis, particularly using the Kraljic Matrix, procurement items are categorized based on their profit impact and supply risk.Strategic criticalitems are those with high profit impact and high supply risk. These items are vital to the organization's operations and often have limited suppliers, making them critical to secure.

For such items, developing apartnership relationshipis appropriate. This involves close collaboration, mutual trust, and long-term commitment between the buyer and supplier to ensure reliability, innovation, and continuous improvement.

CIPS refers to Tuckman’s team development model, which identifies the following stages:

Forming – team comes together

Storming – conflict and challenge

Norming – cooperation and cohesion

Performing – effective performance

Adjourning – team disbands

From the options provided:

Norming ✔

Forming ✔

Adjourning ✔

Achieving, Presenting, and Grieving are not recognised stages in Tuckman’s model.

L4M6 Reference:

Learning Outcome 3: Understand teamworking and collaboration

Topic: Team development and behaviour

CIPS L4M6 Study Guide – Tuckman’s team development theory

Explanation

Internal stakeholders are those who work within the business so include the legal department, employees and end-users. End-users mean those people and departments who will be using the product or service. For example if Gabriel is procuring new software- an end-user would be anyone who would be using that software (whether they're employees, volunteers or agencies). CIPS outlines types of stakeholders on p.64

Comprehensive and Detailed Explanation:

Leverage products are characterized by:

High profit impact:They significantly affect the company's bottom line.

Low supply risk:They are available from multiple suppliers, making it easy to switch if necessary.

These products often have standardized quality, and the competitive supply market allows buyers to negotiate favorable terms.

Explanation

The correct answer is 'arms length'. This is a tactical purchase (as it is low value) and keeping the supplier at arms-length means that Red Manufacturing could possibly exploit them to reduce their prices (think back to the Kraljic matrix and where Blue Business would likely fall). A Partnership or Single- Source relationship requires investment into the relationship, and as the products are low value and Red Manufacturing have a lot of other suppliers, they should not be investing time in developing that relationship with Blue Business. An adversarial relationship wouldn't be advantageous as it may lower the performance of the supplier. See the relationship spectrum on p.5 - this is a hot topic for the exam

Comprehensive and Detailed Explanation:

The described relationship includes:

Joint Product Development:Collaborative involvement in strategic projects indicates a deep partnership.

Integrated Systems:JIT delivery systems require synchronized operations, reflecting significant integration.

These elements are hallmarks of a significant integration partnership.