CIPS L4M6 - Supplier Relationships

Explanation

The definition of value mapping is given on p.69 this is; ‘a process in which value is created through the elimination of waste and operational inefficiencies’. It ties into JIT / Lean.

Comprehensive and Detailed Explanation:

Cultural compatibility is crucial in partnership relationships. Differences in corporate culture can lead to misunderstandings, misaligned objectives, and conflicts, ultimately jeopardizing the partnership's success. Therefore, assessing cultural compatibility at the outset is essential.

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.

Partnership sourcing is suitable for products that contribute to the buying organization's unique selling point (USP) and for critical products on which key customers depend. This approach ensures strategic alignment and mutual benefits for both parties, focusing on collaboration rather than cost alone.

Explanation

This is based on a real exam question- it's looking to see if you can remember Carter's 10 Cs. These are; cash, cost, consistency, culture, clean, communication, competency, capacity, commitment and control. (p.12 in the text book)

Forward buying involves purchasing in advance to lock in current prices and avoid future increases. This strategy is effective in volatile markets where price hikes are anticipated.

Explanation

ABC / Pareto is a "Portfolio Analysis Technique to assess the relationships in a supply chain". This, along with the Kraljic Matrix are two examples of "Supplier Positioning Models". See chapter 2.1 p.17 for more details on this

Explanation

Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn’t necessarily mean physical waste (as in stuff you don’t want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier’s, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn’t necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there’s a short list of ways in which good supplier relationships can bring value for money to a business.

In the Supplier Preferencing Model:

Core: A buyer with high spend and high attractiveness is viewed as critical by the supplier, encouraging strategic collaboration.

Exploitable: Where buyer spend is high but power is lower, suppliers may exploit the situation by raising prices or setting unfavorable terms.

These are the two scenarios associated with high spend buyers.

Explanation

Stationary is a routine item; it is ordered often (as Barry uses different suppliers), it is a low category spend, and low risk to the business' operations (a late delivery of pens isn't going to stop the company making its biscuits). There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix (see p.20)