정답:

See the solution in Explanation part below
Explanation:
How to approach this question:
- This is the type of question you either know or you don't. You can't really guess it. So do memorise it. There's not really a shortcut here.
- The CIPS Code of Conduct is an ethical standard and framework which is used profession-wise. The purpose is to standardise ethics across the profession.
- There are 5 aspects to the Code of Conduct: enhance and protect the standing of the profession, promote the eradication of unethical business practices, maintain integrity in all business relationships, enhance proficiency and stature of the profession and ensure full compliance with law and regulations.
Example Essay:
The Chartered Institute of Procurement & Supply (CIPS) Code of Conduct is a comprehensive set of principles and standards that guide the ethical conduct of procurement and supply professionals. Adhering to this code is crucial for maintaining integrity, transparency, and responsible behaviour within the procurement profession. Here's an overview of the CIPS Code of Conduct along with examples of how organizations can ensure compliance with these standards:
1 - Enhance and protect the standing of the profession.
This means don't bring the profession into disrepute by your actions, don't accept gifts or offers of hospitality and to be aware that behaviour outside work reflects one's reputation as a professional. An organisation can implement training programs to educate procurement professionals about the importance of maintaining high standards of professionalism and integrity in their interactions with suppliers and stakeholders.
2 - Promote the eradication of unethical business practices.
This means fostering awareness of human rights, fraud and corruption issues in business relationships, responsibly managing business relationships if unethical practices come to light, undertaking due diligence (in respect to forced labour, fraud, corruption) and continually develop one's own personal knowledge of ethical issues. Promoting the eradication of unethical business practices requires a comprehensive and proactive approach from organizations. This involves having a strong CSR policy, having whistleblowing protection and reporting mechanisms, and conducting due diligence on the supply chain.
3 - Maintain integrity in all business relationships.
An organisation can show compliance with this by; rejecting improper business practices, never using authority for personal gain, declaring conflicts of interest, giving accurate information, not breaching confidentiality, striving for genuine, fair and transparent competition and being truthful about skills and experience. An example of this is for an organisation to sever ties with unethical businesses. One notable example of a retailer terminating a relationship with a supplier due to ethical reasons is the case of H&M and its decision to cut ties with a Chinese yarn producer in Xinjiang province. H&M, a global fashion retailer, announced in early 2021 that it would no longer source cotton from Xinjiang due to concerns over forced labour and human rights abuses associated with cotton production in the region.
4 - Enhance proficiency and stature of the profession.
Activities which would demonstrate compliance with this includes: Continual development of knowledge and skills, fostering the highest standards of competence in staff members at the organisation and optimising the responsible use of resources. For procurement staff, this could involve becoming MCIPS qualified, and even once qualified, completing routine CPD (Continued Professional Development) to ensure their knowledge and skills remain updated and relevant. They should also strive to share their knowledge with the wider organisation.
5 - Ensure full compliance with law and regulations.
An organisation can demonstrate compliance with the standard by proving they: follow the law in all countries they do business in, fulfilling all contractual obligations and following the CIPS guidance on professional practice. Compliance can include aspects of fiduciary responsibility such as paying the correct level of tax and filing returns on time, as well as compliance to legislation such as the Health and Safety at Work Act 1974 and the Equalities Act 2000.
In conclusion, the CIPS Code of Conduct is a voluntary standard for organisations to follow but it sets a high standard for the industry. By following the CIPS Code of Conduct organisations can enhance their reputation and levels of trust among stakeholders, as well as being reassured that following these clear ethical guidelines contribute to a positive workplace culture, boosting employee morale and commitment by fostering a sense of shared values.
Tutor Notes:
- Under the previous syllabus CIPS asked this question a lot. If you memorise one thing from the study guide I'd recommend it be this. Even if it doesn't come up as a stand-alone question, you can work it into more general essays about ethics- so it is useful to know.
- For a top score, try to give deep examples. So where you have said 'responsibly managing business relationships' you could explain what this means in practice- by ensuring fair contract terms are put in place, holding suppliers to account when they do something wrong and not exploiting smaller suppliers. Where you have said 'complete Due Diligence' you could mention that this would be completed before awarding a contract to a supplier and would involve looking at a supplier's history and supply chain to ensure that they have not been involved in any crimes (fraud etc) or unethical behaviour (such as polluting the environment). The more in depth you go, the more you show the examiner your understanding, and the higher you'll score.
- p. 137 or here: Cips Code of Conduct | CIPS Note the study guide talks on p. 132 about the CIPS Code of Ethics, which is slightly different. The Code of Conduct is the main one to learn.

정답:

See the solution in Explanation part below
Explanation:
How to approach the question
- This is a very open question so your essay could discuss
o the functions of a brand; e.g. advertising, marketing, creating trust, identity o What is effective branding? Strong image, convincing people to purchase, shared values with customers, offering a solution to a problem.
o The impact for procurement and supply chain isn't explained in the study guide so tailor this however you like. The best thing to do would be to think about some companies where branding is important, such as luxury goods, cars, or the brand is synonymous with a particular aspect such as Apple being associated with innovative technology. From there you could argue the importance of selecting the right suppliers to work with in order to keep up the brand image. Another example could be an ethical company needing to ensure their supply chain is 'clean', so as not to damage their branding. Possibilities are endless with this one.
Example Essay
In the contemporary business landscape, the significance of branding extends far beyond marketing and consumer perception. In procurement and supply operations, an organization's brand plays a pivotal role in shaping relationships with suppliers, determining the quality of goods and services that are procured, and influencing overall supply chain efficiency. This essay delves into the importance of branding in procurement and supply, exploring how a strong brand image can drive competitive advantage, foster trust and collaboration, and impact an organization's bottom line.
Building Competitive Advantage Through Brand Reputation:
The reputation of an organization's brand is a key determinant in attracting and retaining high-quality suppliers. A strong brand often correlates with financial stability, market presence, and business ethics, making such organizations more appealing to work with. This advantage is critical in procurement as it can lead to preferential treatment, such as priority access to scarce resources, better payment terms, and opportunities to collaborate on innovative products. For example, a well-regarded technology company might receive early access to cutting-edge components from suppliers eager to be associated with a market leader.
Enhancing Supplier Relationships and Negotiations:
Branding extends into the realms of trust and reliability, essential components in building long-term relationships with suppliers. A well-respected brand often implies a history of fair dealings, prompt payments, and mutual respect, which can make suppliers more willing to negotiate favourable terms. This trust can be particularly vital in times of supply chain disruptions or market volatility. Suppliers are more likely to extend credit or expedite orders for trusted partners, which can be invaluable for maintaining uninterrupted operations.
Influencing Quality and Sustainability Standards:
An organization's brand also communicates its commitment to quality and sustainability, which are increasingly crucial in procurement decisions. Suppliers aligning with brands that emphasize high-quality standards are often more diligent in maintaining these standards in their products and services. Additionally, a strong brand committed to sustainability can drive supply chain practices that align with environmental and social governance (ESG) principles. This commitment can lead to long-term cost savings, risk mitigation, and enhanced brand loyalty among environmentally conscious consumers.
Brand Image and Consumer Perception:
The procurement function directly impacts the final product quality, which in turn affects consumer perception of the brand. An organization's ability to procure high-quality, ethically sourced materials can significantly enhance its brand image and appeal to a broader customer base. For instance, a fashion brand's commitment to ethical sourcing and procurement of sustainable materials can bolster its image as an environmentally responsible brand, appealing to a growing demographic of eco-conscious consumers. The reverse is also true, brands associated with child or forced labour where this is found to be in their supply chains can suffer from loss of customers, revenue and reputation as well as potentially even legal consequences.
Internal Branding and Employee Engagement in Procurement:
Internal branding, the way an organization's values and culture are perceived by its employees, plays a crucial role in procurement. Employees who are proud of their organization's brand are more likely to engage deeply with their work, leading to better performance in procurement roles. This engagement can result in more innovative procurement strategies, improved vendor management, and a greater focus on aligning procurement practices with the organization's overall strategic goals.
Conclusion:
The role of an organization's branding in procurement and supply operations is deeply impactful. A strong brand can create competitive advantages, foster better supplier relationships, influence quality and sustainability standards, enhance consumer perception, and drive employee engagement. In the modern business world, where supply chains are complex and consumer expectations are high, branding is not just a marketing tool but a strategic asset in procurement and supply operations. Organizations that recognize and leverage the power of their brand within these operations are poised to achieve greater efficiency, sustainability, and overall success.
Tutor Notes
- This is a really random section of the study guide and doesn't really relate to the rest of the content. Branding comes up on p.226 - 228. It therefore can come up as a question, but because it's such as small part of the syllabus, don't focus too much effort on this subject.
- If you remember one line from this topic it's this: "branding is not just a marketing tool but a strategic asset in procurement and supply operations"
- This type of question could come up as a scenario / case study. E.g. How does the branding of X Company impact upon their supply chain.

정답:

See the solution in Explanation part below
Explanation:
3 (a) Outline the main characteristics of an Enterprise Resource Planning (ERP) system.
(10 marks)
An Enterprise Resource Planning (ERP) system is an integrated software system used by organisations to manage and coordinate key business activities through one central system. Its main characteristics are as follows:
1. Integration of business functions
One of the main characteristics of an ERP system is that it links different departments such as procurement, finance, HR, production, warehousing, and sales.
This means information can be shared across the business rather than each department working in isolation.
2. Centralised database
ERP systems usually operate from a single shared database.
This ensures that all users are working from the same data, which improves accuracy and reduces duplication of records.
3. Real-time information
ERP systems provide up-to-date information in real time.
For example, if stock levels change or a purchase order is raised, the system updates immediately so other departments can see the latest information.
4. Standardised processes
ERP systems support the use of common procedures and workflows across the organisation.
This helps ensure activities are carried out consistently and in line with company policies.
5. Modular structure
Most ERP systems are made up of different modules, such as procurement, inventory, finance, manufacturing, and customer management.
A business can choose the modules it needs while still keeping all functions connected.
6. Automation of routine tasks
ERP systems can automate repetitive activities such as order processing, invoice matching, stock reordering, and reporting.
This reduces manual work and can improve efficiency.
7. Improved visibility and reporting
ERP systems provide managers with access to reports and dashboards that show performance across the organisation.
This supports better decision-making and control.
8. Security and access controls
ERP systems normally include user permissions and approval levels.
This means only authorised employees can access or approve certain transactions, which strengthens control and compliance.
9. Support for planning and forecasting
ERP systems help organisations plan resources more effectively by using data on demand, stock, production, and purchasing.
This helps businesses make better forecasts and allocate resources efficiently.
10. Scalability
An ERP system can often grow with the organisation.
As the business expands, new users, modules, or locations can be added to the system.
Conclusion
Overall, the main characteristics of an ERP system are integration, shared data, real-time information, standardisation, automation, and improved control. These features help organisations manage their operations more effectively.
3 (b) Explain how an Enterprise Resource Planning (ERP) system can be used in a procurement and supply chain context.
In a procurement and supply chain context, an ERP system can be used to improve the flow of information, increase efficiency, and support better decision-making across the supply chain.
1. Purchase requisition and purchase order processing
An ERP system can be used to create and manage purchase requisitions and purchase orders.
When a department identifies a need, the request can be entered into the system and routed for approval. Once approved, the ERP system can generate a purchase order and send it to the supplier.
This helps procurement by making the process faster, more accurate, and easier to control.
2. Supplier information management
ERP systems can store supplier records in one place, including:
supplier contact details
pricing agreements
contract terms
delivery performance
quality records
This means procurement staff can make informed decisions when selecting and managing suppliers.
3. Inventory and stock control
ERP systems allow organisations to monitor inventory levels in real time.
This helps procurement teams know when materials need to be reordered and prevents both stockouts and overstocking.
For example, if stock falls below a minimum level, the system may trigger a reorder alert or automatic replenishment process.
4. Demand planning and forecasting
ERP systems can analyse historical sales and usage data to help forecast future demand.
This allows procurement and supply chain teams to plan purchases more effectively and ensure materials are available when needed.
This is particularly useful in manufacturing, where raw materials must be available to support production schedules.
5. Production planning and materials management
In a manufacturing environment, ERP systems can link procurement with production planning.
If the production department schedules the manufacture of goods, the ERP system can calculate the raw materials and components required.
This supports materials requirements planning (MRP) and ensures procurement orders the right items in the right quantities.
6. Goods receipt and invoice matching
When goods are delivered, the ERP system can record the receipt and compare it against the original purchase order and supplier invoice.
This is often called three-way matching.
This improves accuracy, reduces fraud, and ensures suppliers are only paid for goods that were actually ordered and received.
7. Supplier performance monitoring
An ERP system can collect data on supplier performance, such as:
on-time delivery
quality of goods
lead times
price changes
Procurement can use this information to review supplier performance, manage contracts, and identify opportunities for improvement.
8. Spend analysis
ERP systems can provide visibility of organisational spend by supplier, category, or department.
This helps procurement identify patterns, negotiate better deals, and reduce unnecessary or off-contract spending.
9. Improved communication across the supply chain
Because the ERP system integrates departments such as procurement, warehousing, production, and finance, all parties can access the same data.
This improves coordination and reduces misunderstandings.
For example, finance can see what has been ordered, warehouse staff can prepare for deliveries, and production can check material availability.
10. Compliance and audit trail
ERP systems help ensure that procurement activities follow company policy through approval workflows and user permissions.
They also create an audit trail, showing who raised, approved, ordered, and received goods.
This improves governance and reduces compliance risks.
Conclusion
In a procurement and supply chain context, an ERP system supports purchasing, stock control, planning, supplier management, and reporting. It creates a more connected and efficient process, helping organisations reduce costs, improve control, and ensure the smooth flow of goods and information.

정답:

See the solution in Explanation part below
Explanation:
How to approach this question:
- Your response will need 5 definitions. For 25 points that means 5 points per section so think about the level of detail you'll need to include. It would be 5 points for electronic system (i.e. your introduction and conclusion), and then do a paragraph on each of the technologies. In the description you could talk about why it's used and the advantages, and give some examples if you know any.
- Definition of electronic system - a system which uses some form of technology and automates a procurement process than would otherwise have been completed manually.
- E-Requisitioning - a way of ordering goods or services. Includes the use of integrated ordering systems such as: ERP/ ERP II / MRP / MRP II
- E-Catalogue- an electronic display of what goods can be ordered. A simple example of this may be a supplier displaying the goods they offer on their website and the prices to purchase the goods.
- E-Sourcing - this involves the early stages of the tender process- using an electronic portal to find a supplier and / or conduct a tender exercise.
- E-Payment - the P2P part of the cycle (procure to pay) - may involve electronic POs and Invoices, BACS, CHAPS and SWIFT payment systems, and the use of Purchasing Cards Example essay:
Electronic systems, commonly refered to as E-procurement, is the business-to-business or business-to-consumer purchase of goods or services, typically using the Internet or other information/ networking systems such as ERP systems. It has developed in the past 20 years as technology has improved and replaces time-consuming manual processes and is now considered the 'norm'. Electronic systems and e-procurement can be used throughout the entire supply chain- not just between a single buyer and supplier. Examples of electronic systems including the following:
E-requisitioning
This is often used in manufacturing organisations to order raw materials. An electronic 'bill of materials' is created and stock levels are automatically updated. As materials get used and a pre-determined level is reached, this triggers a new order which is placed via an e-requisitioning system such as MRP. It is a technological version of the traditional kan-ban (2 bin) system. E-requisition tools are often cloud-based. It helps buyers simplify the buying process, track orders and provides higher levels of visibility on spend. The main disadvantage to this technology is that it requires technology interfacing between the buyer and suppler, which may be expensive.
E-catalogues
This is a digital or online version of a catalogue- a document that details what you can buy and at what price. There are two main types - buy side catalogues and sell side catalogues. A buy-side catalogue is an internal system used by a buyer which hosts a list of pre-approved suppliers from whom purchases can be made. It may include details of commonly bought items and the prices. The use of this reduces maverick spending and ensures consistency in purchases (e.g. whenever lightbulbs need to be ordered, the same lightbulbs are ordered so the office lighting is consistent). A sell-side catalogue is provided by a supplier and details what they offer- it often includes prices, any discounts for bulk buying and may also let buyers know of availability (e.g. the website may say only two items remaining). This may be as simple as a price list on their website, available for anyone to view.
E-sourcing
This is a tool that helps a buyer find the most suitable supplier. Examples include e-tendering websites where a buyer can host a competition to find a supplier. E-auctions are also a type of e-sourcing tool. The tool (often a website) hosts all of the tendering documents and allows for buyers and suppliers to communicate during the tender process (for example if there are any clarifications needed on the specification). Using this tool allows for transparency and equal treatment, but also saves time in completing the tender exercise. PQQs can be automated and some e-sourcing tools include the use of Artificial Intelligence which can 'read' tender submissions and automatically exclude suppliers who do not fulfil the required criteria.
E-payment technologies
These are methods to pay for goods and services that replace the need for cash and cheques. Examples include online bank transfers, electronic Purchase Orders and Invoices and the use of Pre-Payment cards. These act like credit cards for employees to use when they need to buy supplies. For example, if you have a maintenance team that frequently need to purchase low-value items like screws and paint, you could issue the team with a Pre-Payment card with a certain limit (e.g. £500/ month) so they can buy what they need. The company will then automatically be sent a monthly invoice for all of the purchases. This saves time from having to issue the maintenance team with petty cash for the purchases and allows for greater visibility over spend (e.g. how many screws are typically bought per year?). Another typical use is for staff travel.
In conclusion, procurement teams benefit significantly from leveraging electronic tools, including e-requisitioning, e-catalogues, e-sourcing, and e-payment technologies. The adoption of these electronic tools brings about various advantages that enhance efficiency, transparency, cost-effectiveness, and overall effectiveness in the procurement process. Moreover E-procurement tools has helped develop the procurement function into a professional and respected function and allows for a more pro-active rather than reactive approach to purchasing.
Tutor Notes:
- Fun Fact! In the public sector, it is mandated that electronic systems are used in procurement (Public Contract Regulations 2015) as this helps to achieve the objectives of transparency and equal treatment. Where manual systems are used, it is easy to manipulate the tender process. For example, a buyer could read some tender submissions before the deadline for submission and no one would know, but with an electronic system this is impossible as it locks evaluators out until the deadline has passed and all bidders have submitted their responses. (note PCR 2015 is being replaced in 2024- details are still TBC but the above fun fact will still remain in the new legislation- they're definitely still going to make it compulsory).
- You could also mention the names of systems if you know any. For example, e-sourcing tools include MyTenders.com and Delta E-Sourcing. PO / Invoice systems include Sage, Xero and QuickBooks.
- The question doesn't ask for advantages of using these technologies but you could mention this in your answer. Just be sure that this isn't the focus of your response- the question asks specifically for you to DESCRIBE the systems so detailed s and examples are where you will secure the most points.
- p.108

정답:

See the solution in Explanation part below
Explanation:
How to approach the question
Your answer should provide details on 3 of the following:
- Contract Award and Implementation
- Warehouse Logistics
- Contract performance and Improvement
- Supplier Relationship Management
- Asset Management
Because the question is only asking for 3 stages, you're going to have to go much more into detail for each stage, giving lots of information about why each stage is important and examples. You could consider thinking of an example procurement you have done recently and explaining the stages for that. Or you could take a hypothetical procurement too. Either will get you the same marks. Pick the three that you can write the most about.
Essay Plan
Introduction - explain that sourcing of goods and the role of Procurement doesn't end once a contract is signed. There is ongoing management and processes which must be carried out to ensure success.
Paragraph 1 - Contract Performance and Improvement
* This is about ensuring contract obligations are fulfilled. Contract administration includes P2P procedures, database management, budgeting / costs monitoring, reporting and dispute resolution
* Procurement's role may be in managing contract performance through the use of SLAs and / or KPIs. This can be done via reporting, using a Supplier Scorecard and meeting regularly to discuss.
* It's important KPIs are measured and that there are consequences for failing to meet them. An example of consequences could be using a Performance Improvement Plan.
* Contract Management also includes updating the contract where required - e.g. issuing variations to contract and updating the change control log
* Another important aspect of this is ensuring the costs remain within scope of the budget
* Contract performance can be compared if you have several suppliers delivering the same goods- could use a Factor Rating Method.
* Performance could be measured against several criteria such as on time deliveries, response time of supplier, number of complaints.
Paragraph 2 - Supplier Relationship Management
* There is a difference between managing the contract and managing the supplier relationship. It's possible to have excellent contract performance and a terrible relationship. However, the two are generally linked- where there is a good relationship, the contract often performs well.
* The supplier management approach depends on where the relationship falls on the relationship spectrum (e.g. transactional or collaborative)
* This involves; maintaining regular contact with the supplier, motivating the supplier, working collaboratively with them (e.g. on performance issues or resolving any disputes)
* Incentivising the supplier leads to collaboration and mutual support
* To assess or rank suppliers you could use a vendor rating method or supplier evaluation forms
* Supplier relationship management may involve investing in the supplier- e.g. through training or technology sharing Paragraph 3 - Asset Management
* Includes creating a post contract 'lessons-learned'
* Assessments should be carried out to determine if business requirements have changed, whether the agreement is still required and fit for purpose, what can be learnt from the process and how improvements can be incorporated next time.
* This is the final stage of the Procurement Cycle and takes us back to the start of cycle, which begins again when the item needs to be reprocured
* Whole life costing should be considered at this stage: this is the total cost of ownership over the life of an asset. The concept is also known as life-cycle cost (LCC) or lifetime cost, and is commonly referred to as "cradle to grave" or "womb to tomb" costs.
* Generally used on large purchases such as machinery and vehicles. Full Asset Management may not necessary for direct cost items such as raw materials incorporated into final goods.
* Considerations may include; costs of running the asset, how long it will perform, insurance, maintenance, opportunity costs, disposing of the asset.
* Also consider environmental and social impacts of the procurement.
Conclusion - it is important that procurement are involved at every stage of the cycle, not just in the pre-award stages. Procurement can add value at every stage.
Tutor Notes
- Depending on the examples you choose to use, you could talk about how the type of item procured could impact on the different stages. For example, high risk purchases may require more contract management than low risk purchases, and capital expenditure items such as new machinery may require more attention to the Asset Management stage.
- You could also think about how procurement adds value at each of the stages.
- Study guide p. 79