CIPS L4M6 - Supplier Relationships

Economic factors such as unemployment rates affect labor availability, wages, and consumer purchasing power, directly impacting business operations and supply chains.

Comprehensive and Detailed Explanation:

In strategic partnerships, including a continuous improvement clause is vital. This clause commits both parties to ongoing efforts to enhance processes, reduce costs, and improve quality over time. Such a commitment ensures that the partnership remains dynamic and responsive to changes, fostering long-term collaboration and mutual benefit.

Explanation

The portable CD player has been replaced with a substitute product. This threat wasn't considered by the company and this resulted in poor sales. There are many questions in the exam on Porter's 5 Forces - see p. 39

If the market has few suppliers, an open tender is not appropriate, as it adds unnecessary time and cost. Instead, a restricted or negotiated procedure is more effective. Open tendering is best used in highly competitive markets.

Partnerships are built on trust and transparency, with shared benefits such as cost reductions and improved processes. Adversarial relationships, in contrast, focus on price and contractual obligations.

An adversarial relationship is highly competitive, often win:lose, focusing on cost and negotiation power rather than collaboration. It contrasts with partnerships or strategic alliances.

Explanation

The correct answers are; no tender process, early supplier involvement and no defined end-period. A partnership wouldn’t automatically mean lower costs, and in a partnership the KPIs are usually a joint performance measurement rather than set to the supplier. For more information on the difference between partnerships and contractual relationships see p.124-5

Cost modeling helps in understanding supplier pricing strategies, identifying cost drivers, and opportunities for negotiation or cost reduction, which supports profitability improvements.

Explanation

Barriers to entry are economies of scale (in the air travel industry you can't just start off small and grow), access to capital (you need to already have a lot of money to buy airplanes) and licences and permits (you need to ensure you have the correct licences to fly planes). These are listed on p.41. Other barriers include; strong brand identity already dominant in the market, high switching costs for buyers, access to distribution networks and government policy.

Comprehensive and Detailed Explanation:

Bruce Tuckman's model of team development outlines five stages:

Forming– Team members get acquainted and establish ground rules.

Storming– Members begin to communicate their feelings but still view themselves as individuals rather than part of the team.

Norming– People feel part of the team and realize that they can achieve work if they accept other viewpoints.

Performing– The team works in an open and trusting atmosphere where flexibility is the key and hierarchy is of little importance.

Adjourning– The team conducts an assessment of the year and implements a plan for transitioning roles and recognizing members' contributions.