CIPS L4M6 - Supplier Relationships

Strategic suppliers are those that are critical to business continuity and risk management. CIPS states that such suppliers require:

Long-term commitment

High levels of trust

Joint planning and collaboration

Given the impact on patient safety and service continuity, a partnership sourcing relationship is appropriate, enabling shared responsibility, performance management, and continuous improvement.

Transactional or competitive sourcing would not provide the stability required.

L4M6 Reference:

Learning Outcome 3: Understand supplier relationship strategies

Topic: Strategic suppliers and partnerships

CIPS L4M6 Study Guide – Supplier segmentation and SRM

In the context of the IT equipment industry,Technologicalfactors are paramount. The rapid pace of technological advancement influences product development, supply chain processes, and market competitiveness. Utilizing the STEEPLED framework, technological considerations would significantly impact the company's supply chain strategy.

As per the CIPS Intelligence Hub:

"STEEPLED analysis is a strategic planning methodology that can be used across all business functions to discover, evaluate, organise, and track external risk."

— CIPS Intelligence Hub: Using STEEPLED analysis to develop your supply chain

Within the STEEPLED analysis framework, socio-cultural (social) factors relate to demographics, workforce behaviour, societal attitudes, and population trends.

Labour mobility directly relates to how easily workers move between regions, industries, or employers, affecting:

Availability of skilled labour

Recruitment and retention

Supplier workforce stability

The other options belong to different STEEPLED categories:

Employment law → Legal

Environmental regulations → Environmental

Consumer confidence → Economic

L4M6 Reference:

Learning Outcome 1: Understand external influences on procurement and supply

Topic: STEEPLED and PESTLE analysis

CIPS L4M6 Study Guide – Macro-environmental analysis

Explanation

The correct answer is TUPE: Transfer of Undertakings (Protection of Employment). Details on TUPE can be found on p.115

Explanation

Using an external supplier always comes with increased risk, as you become dependant upon them, and have less control over their performance (compared to an in-house team). In this example Harry will have the increased risk that the contract cleaners turn up late to their shifts, or don't do a good job. However, there is no reason to believe that the supplier will not perform as well as an internal team- we don't have enough information from the QUESTION NO: for this to be true. What is true is the RISK isgreater. The other answers are incorrect; the QUESTION NO: doesn't indicate whether outsourcing the cleaning will be more or less expensive for Harry. Allowing staff to focus on other areas is an advantage not a disadvantage. See p.4 for more information on 'External Suppliers'

Pareto Analysis is based on the 80/20 principle, which CIPS uses to help procurement professionals:

Identify the small number of items accounting for the majority of spend or value

Focus effort where it adds the most value

Key activities include:

Prioritising procurement time and resources (Statement 1 ✔)

Separating spend into critical few and trivial many (Statement 3 ✔)

Statement 2 relates to Kraljic portfolio analysis, and Statement 4 relates to supplier preferencing, not Pareto.

L4M6 Reference:

Learning Outcome 1: Understand procurement analysis and segmentation tools

Topic: Pareto (80/20) analysis

CIPS L4M6 Study Guide – Spend analysis and prioritisation

Explanation

You would expect a supplier to submit full pricing information, risk assessments and method statements. However, depending on what you’re procuring, you might not need to see risk assessments or method statements. Liquidity and Gearing may be looked at during the Pre-Qualification stage, but wouldn’t form part of a RFP. See p.76

In stakeholder management,Negative leadersandPromoterspossess high influence over others:

Negative leaders: Individuals who oppose the project and can sway others against it due to their influence.

Promoters: Advocates who support the project and can positively influence others.

Understanding these dynamics is crucial for effectively managing stakeholder resistance.

As highlighted in the CIPS study materials:

"Overcoming resistance- Promoters - They have a high influence on other stakeholders and support the project. They support and empower."

An amicable approach is critical when alternative suppliers are limited or when ongoing collaboration is required during the termination period. Maintaining positive relations ensures smooth operations and protects reputations in the marketplace.

Explanation

The correct answer is ‘Yes- the Public Sector is regulated by EU procurement regulations which prohibits this’. This is stated on p.122. Please note that this study guide and exam were written before Brexit. Once Brexit happens, nobody knows what will happen with this.