CIPS Exam Report for Learner Community:

Transcription

1 CIPS Exam Report for Learner Community: Qualification: Advanced diploma in procurement and supply Unit: AD2 - Managing risks in supply chains Exam series: March, 2016 Question 1 - Learning Outcome 1.4 (both parts) Question 1a) Explain how poor performance by the installation and commissioning contractor in the new local market might present risks for AET s reputation for corporate social responsibility. 13 Marks Question 1b) Outline the main features of THREE standards or codes of practice related to sustainable procurement that AET might apply in order to reduce the risk to its reputation 12 Marks This was a two-part question which firstly sought to test candidate knowledge and understanding of how poor performance of a contractor might present risks for a company s reputation for corporate social responsibility. Additionally, it sought to test candidate ability to outline the main features of THREE standards or codes of practice related to sustainable procurement in order to reduce the risk to a company s reputation. Syllabus reference: Learning Outcome 1.4 refers for both parts. Content should have recognised that AET requires to have a good reputation for corporate social responsibility (CSR) and also recognised that that its activities have a wider impact on the society in which it operates; and that developments in society in turn impact on its ability to pursue business successfully. Poor performance by the selected installation contractor might present CSR risks for AET if the contractor does not attach similar importance to ethically and socially correct behaviour in areas such as: Recruitment and staffing, Working terms and conditions, Health and safety and regulations and Environmental issues. Stronger answers may have recognised that risks such as those above, if not managed and mitigated effectively will have an adverse effect on AET s CSR reputation and could lead to loss of support from staff MARCH_16_AD2_EXAM REPORT _LEARNER_COMMUNITY_FV 1/6

2 and stakeholders; increased regulatory, media and pressure group scrutiny; loss of business/customer goodwill and financial/legal penalties. Content should have recognised that whilst there is legislation and standards relevant to CSR and sustainability in areas such as human rights, employment law, corporate finance and environmental law; there is also a range of voluntary standards and codes of practice that AET might consider to support sustainable procurement and contribute to reducing reputational risk. Ideally, answers were expected to outline the main features of three standards or codes of practice such as: UN Global Compact, Earth Charter, ISO Environmental Management System Standard, International Labour Organisation (ILO) standards, Ethical Trading Initiative (ETI), ISO Social Responsibility and any other relevant standards and codes of practice. Exam Question summary There were two aspects to this question, CSR and poor performance. Most candidates chose to discuss only one of these aspects in detail. While those that discussed poor performance with little or no reference to the fundamentals of CSR were able to give appropriate examples, they were not specifically linked to CSR and as such were very general in nature. Those that discussed CSR were able to demonstrate good understanding of CSR, but their examples of poor performance were weaker. Needless to say better answers were able to define the characteristics of CSR and link these robustly to examples of poor performance. Most candidates were able to identify the three standards/codes asked for. Some candidates referred to generic standards like Health and Safety or company procurement practices while others gave specific examples, sometimes using three examples of the same type of standard such as ISO. It was noticeable for this question that candidates used lengthy preambles that made general points but were not specific to a particular standard. Also candidates used lists (bullet point style) here which attract fewer marks than a discussion about the same point. This may be related to the use of the word outline in the question. MARCH_16_AD2_EXAM REPORT _LEARNER_COMMUNITY_FV 2/6

3 Question 2 - Learning Outcome 2.3 (both parts) Question 2a) Discuss how AET might use effective project planning when managing risks in its supply chains. 15 Marks Question 2b) Produce a Gantt chart based on the key project activity dates in the case study. 10 Marks This was a two-part question which firstly sought to test candidate knowledge and understanding of how effective project planning can be used to manage risks in an organisation s supply chains. Additionally, it further sought to test candidate ability produce a Gantt chart based on the key project activity dates in the case study. Syllabus reference: Learning Outcome 2.3 refers for both parts. What was required for answers to this question was a discussion around how effective project planning might be used by AET to manage supply chain and project risks in ways such as helping to: consider a range of potential risks and vulnerabilities and how they can be mitigated; to clearly identify deliverables, likely duration and cost of the project and will support decisions on risks; determine required resources and supports proactive resource planning; allow time to challenge business needs and specifications; identify tasks, sequence and timing helping to better understand dependencies and vulnerabilities; encourage setting of milestones and gateways allowing for regular review and reassessment of risks; generate visual plans, charts and output documents to support effective risk management. What was required in answer to this question was the production of a Gantt chart based on the information provided in the case study. Exam Question summary Again, this was another question with two aspects, project planning and supply chain risks. Most MARCH_16_AD2_EXAM REPORT _LEARNER_COMMUNITY_FV 3/6

4 candidates chose to discuss project planning using a particular model. Poorer answers here were simply descriptive of the model with few references to the issues in the case. Better answers were able to provide examples linked to the case. Some candidates chose to highlight the risks identified in the case and then apply aspects of project planning to them to demonstrate how they could be managed. There were many different examples of a Gantt chart drawn, with varying degrees of draughtsmanship. While many got the basics right, there were still fundamental errors made such as distorting time lines, fussy identification of the activities, including detail not asked for, no labels, no title, no key/explanation to what the marks were, no boxing to separate activities/month, and portraying the end/start dates as one month rather than as a day. The main point being a Gantt chart is a visual representation of connecting activities over time to show their interdependence with each other. This was not easily accessible in the way many candidates presented their Gantt charts. Those that did not fall into these pitfalls gained maximum marks. Question 3 - Learning Outcome 3.2 Question 3) Examine THREE risk management services that the local consultancy in the new market might provide to AET. 25 Marks This was a single 25 Mark question which sought to test candidate ability to examine THREE risk management services that a consultancy could provide. Syllabus reference: Learning Outcome 3.2 refers for this question This question required an examination of three risk management services which might be provided by the local third party consultant in the new market - such as: Supplier credit ratings, Supplier quality assurance, Supplier security management services, Local supply market services, Risk auditing services, Disaster recovery services etc. Exam Question Summary This question required three services to be identified. Most candidates were able to do this, but here were MARCH_16_AD2_EXAM REPORT _LEARNER_COMMUNITY_FV 4/6

5 examples of lengthy preambles where valid points were made but could not be attributable to a particular service. In some cases, it was difficult for the examiner to identify what 3 services were being proposed because candidate s comments in the preamble were then superseded by specific proposals later in the answer. For example - it was possible to see more than three examples in answers because of this. The services proposed also varied. Some were limited to 3 aspects of risk management. For example - identify risk, evaluate risk, determine risk strategy. Others included acting as a fire brigade or offering police services which is not a traditional risk management service. Generally, candidates were able to identify relevant services such as logistics advice, credit management, auditing. Question 4 - Learning Outcome 4.3 Question 4 Explain a typical risk management process, using examples of potential risks for AET to support your answer. 25 Marks This was a single 25 Mark question which sought to test candidate ability to explain a typical risk management process, using examples of potential risks from the case study to support the answer. Syllabus reference: Learning Objective 4.3 refers for this question. The content required in answer to this question was an explanation that a risk management process typically involves three key elements; risk identification, risk analysis and risk mitigation/management. Answers were expected to explain these key elements and include supporting examples from AET. One way of doing this is by means of a diagram of the risk management cycle to show where the key elements fit in the process. In terms of the identification of potential problems or areas of uncertainty, risks identified may be external or internal to the business and might include strategic, operational, financial and compliance risks as well as market, technological, supply and reputational risks. In terms of Risk Analysis, AET will need to assess the probability and impact of the potential risks identified in order to understand how likely they are to occur and the potential severity. Tools such as probability/impact matrices and risk registers might be used to document and assess potential risks. In terms of Risk mitigation/management, candidates may suggest risk management strategies that AET might use within the supply chain. These can be classified under the four generic headings: Tolerate, Transfer, Terminate, Treat MARCH_16_AD2_EXAM REPORT _LEARNER_COMMUNITY_FV 5/6

6 Exam Question Summary This question was mainly answered by explaining a risk assessment model using examples from the case to a greater or lesser degree. As such it was reasonably well answered. A few candidates chose to answer from the perspective of the supply chain relating aspects of risk management to supply chain examples. Both approaches were valid. Poorer answers were simply descriptive of a risk management process with little reference to the case. Better answers were able to illustrate points made with examples relating to the case. Weaker answers also relied on a bullet point style with little development of points made. General observations Again, consistent with previous examination series for this Unit, there were general areas where many candidates could have achieved more marks - for example if they had: written in response to the specifics of the question, instead choosing to write about what they generally knew about the topic. not included lengthy preambles before getting into the answering the specifics of the question. Not only does this not attract marks, it also wastes valuable time in answering the overall paper. included more content relevant to the unit being tested. Some answers were light in content on managing risks. This core AD2 unit requires demonstration of knowledge and understanding in the areas of managing risks in supply chains. Consequently, answers that were more generic achieved fewer marks. MARCH_16_AD2_EXAM REPORT _LEARNER_COMMUNITY_FV 6/6