CIPS Exam Report for Learner Community:

Transcription

1 CIPS Exam Report for Learner Community: Qualification: Diploma in Procurement and Supply Unit: D1 Contexts of Procurement and Supply Exam series: July 2017 Each element of a question carries equal weighting unless otherwise stated. Question 1 Learning Outcome 1 Explain, with examples, FIVE benefits of a supply chain management approach to procurement. (25 marks) Learning outcome addressed LO1.3 Explain: Give reasons or account for something, so that it is clear or easy to understand. Examples of good content/good approaches in answers: A good answer would have explained five benefits of a supply chain management approach to procurement. These might have included: Reduced costs by eliminating waste and implementing cost reduction programmes throughout the supply chain. For example, this may involve eliminating activities that don't add value Improved responsiveness to customers' requirements by emphasising the continuous flow of value towards the end customer Access to complementary resources and capabilities, such as joint investment in research and development and the sharing of technology and ideas Enhanced product and service quality through collaborative quality management, continuous improvement programmes and enhanced supplier motivation Improved communication through increased information sharing and the integration of systems; this should help to improve planning and coordination Sharing demand forecasting and planning information enables suppliers to produce only what is required, when it is required; this would reduce inventory and the associated costs Faster lead times for product development and delivery means that new and modified products can be offered in response to changing customer demand (agile supply) Stronger answers, which were rewarded by marks of a merit or distinction standard, would have provided appropriate examples, as specified in the question. Such examples might have been from the candidate's work place or from previous experience. They would also have provided a more detailed explanation of the JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 1/7

2 five benefits. Some answers were very short, with each benefit being explained in one or two sentences. They lacked depth of detail and no examples were provided. A significant number of candidates attempted to answer the question in terms of the five 'rights' of purchasing. In such cases, marks could only be awarded for valid points made. A few candidates were able to explain three or four benefits, rather than the five specified in the question. Concluding comment: Answers to this question were of a mixed standard. There were some very good answers, with candidates explaining five benefits in detail and providing good examples of each. On the other hand, a significant number of candidates provided very brief explanations, with no examples. Question 2 Learning Outcome 2 Describe FIVE sequential stages of a typical tendering process. (25 marks) Learning outcome addressed: LO2.1 Describe: Give a full account of or a detailed representation of something. Examples of good content/good approaches in answers: A good answer would have described five sequential stages of a typical tendering process. These might have included: An evaluation of the suitability of tendering as a procurement methodology, as compared to other methods; different forms of tendering, such as selective or open, might have been considered Identification of the need, which might be through a bill of materials or requisition The preparation of detailed specifications, to form part of the tender documents; different types of specification, such as performance or conformance, might have been considered Determining a realistic timetable for the tender process, allowing a reasonable time for responses at each stage The issue of the invitation to tender, accompanied by specifications; in the case of selective tendering, this would be by means of an invitation to bid, while in the case of open tendering, it would be by means of a public advertisement The submission of completed tenders or bids by potential suppliers, within the specified deadlines Opening of tenders on the appointed date, while tenders received after this date should be returned unopened; the tenders received should be logged, with the main details listed on an analysis sheet Analysis of each tender, against the stated criteria, with a view to selecting the best offer; this will JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 2/7

3 usually be on the basis of the lowest price or the most economically advantageous tender (MEAT) Award of the contract to the successful bidder and advertisement or notification of the award De-briefing unsuccessful tenderers, to enable them to improve their competitiveness in future bids Stronger answers, which were rewarded by a mark of a merit or distinction pass standard, would have described each of the five stages in more detail. Also, answers would have been illustrated by examples, often from the candidate's work place, or from previous experience. The stages described must have been in sequence A significant number of candidates confused the tendering process with the sourcing or procurement cycle. As a result, they introduced stages of the sourcing cycle, which are not relevant to the tendering process. Examples included supplier appraisal and contract management. No marks could be awarded for these and as a consequence, such candidates' maximum mark for this question was reduced. Also, some candidates did not respond to a key word in the question, 'sequential' and even though they might have described five stages, because they were not sequential, a high mark could not be awarded. Concluding comment: There were some very good answers to this question, with candidates describing five sequential stages in detail and providing appropriate examples to illustrate. Such answers were rewarded by a high mark, of a merit, or distinction pass standard. But, in general terms, answers were poor, with many candidates describing stages of the sourcing cycle, which were not part of the tendering process. Also, some candidates described five stages of the tendering process, but out of sequence. Question 3 Learning Outcome 3 (a) Define the term 'Corporate Governance'. (b) Explain FOUR reasons why it is important to maintain effective governance standards within the procurement function. (5 marks) (20 marks) Learning outcome addressed (a) LO3.1 (b) LO3.1 (a) Define: Explain the exact meaning of a word or phrase. (b) Explain: Give reasons, or account for something, so that it is clear and easy to understand. JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 3/7

4 Examples of good content/good approaches in answers: Answers to part (a) should have provided a definition of the term 'Corporate Governance'. This might have been the rules, policies, processes and organisational structures by which organisations are operated, controlled and regulated, to ensure that they adhere to accepted ethical standards, good practice, laws and regulations. Answers to part (b) should have explained four reasons why it is important to maintain effective governance standards within the procurement function. These might have included: Procurement professionals potentially control large sums of money and they are in a position of trust within the organisation; they have a duty of care, which may be jeopardised by unethical conduct Procurement professionals are faced by the opportunity to commit financial fraud or to misuse systems or information for personal gain The decisions of procurement professionals typically benefit some suppliers over others. This creates an incentive for suppliers to try to influence decisions, through bribery Procurement professionals are in a 'stewardship' role, responsible for finance and assets, which are owned by other people. Unethical conduct may be represented by the theft, loss or damage of assets, belonging to the owners of the organisation The reputation of the profession and the employing organisation may be damaged by fraud or unethical conduct and enhanced by ethical conduct. Ethical standards are therefore an important element in managing reputational risk Supply chain relationships may be damaged by unethical conduct. Ethical practices are therefore an important element in procurement professionals maintaining a good status with suppliers Stronger answers to part (a) would have gone on to say that the principles of Corporate Governance, may be defined internally by the constitution, or Articles of Association, of the organisation, or that they may be defined by external forces. Examples of this include government policy, law and regulations, professional bodies, such as CIPS, which develop ethical codes and best practice frameworks, or international bodies, such as the Ethical Trade Initiative and the International Labour Organisation. The Cadbury Report may have been referred to. Answers to part (b) would have explained each of the four reasons provided in more depth of detail and given illustrative examples, from the candidate's own work place or from their previous experience. Such examples might have included details of either ethical or unethical conduct, which the candidate had experienced. Some answers to part (a) were very short and lacked depth of detail. They consisted of one or two short sentences. A small minority of candidates did not understand the term Corporate Governance. Some candidates were unable to provide the four reasons specified in the question, with only two or three explained. In other cases, explanations were very brief, with only one or two short sentences being provided. For a 20 mark question, more depth of detail was required. JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 4/7

5 Concluding comment: In general terms, answers to part (a) were good, with a significant number of candidates achieving a mark of a merit or distinction pass standard. Answers to part (b) were of a mixed standard. There were some very good answers, with candidates being able to explain four reasons why it is important to maintain effective governance standards within the procurement function and provide examples to illustrate. Such answers were rewarded by a mark of a merit or distinction pass standard. On the other hand, there were a significant number of answers that lacked the necessary depth or breadth of detail, which did not receive a mark of a pass standard. Question 4 Learning Outcome 4 (a) Explain the impact of THREE objectives of a public sector organisation on its procurement activities. (b) Explain how a purchaser in the public sector complies with the regulatory requirement for: (i) Competitive supply (ii) Accountability. (15 marks) (10 marks) Learning outcome addressed (a) LO4.2 (b) LO4.2 (a) and (b) Explain: Give reasons, or account for something, so that it is clear and easy to understand. Examples of good content/good approaches in answers: Answers to part (a) would have explained the impact of three objectives of a public sector organisation on its procurement activities. These might have included: To deliver essential public services, such as education, healthcare and housing, which the private sector might not provide. A typical impact of this would be that procurement must ensure an adequate level of service in providing the goods and services needed in the education, healthcare and housing sectors. This might be achieved by comprehensive specifications, including KPI's and supplier performance monitoring To encourage national and community development; examples might include developing education and skills, stimulating economic development and developing infrastructure, such as road networks and communications. The impact of this on procurement activities would be careful supplier selection and awarding contracts only to those suppliers with the capability to contribute to the appropriate types of development JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 5/7

6 To pursue socio-economic goals, such as support for small and minority-owned businesses, the pursuit of sustainable development and environmental protection. Again, this would impact on the type of supplier chosen; these must be suppliers who can contribute to the above requirements and who's values are the same as the public sector organisation Ensuring value for money and the efficient use of public funds, which mainly come from taxpayers. The impact of this would be rigorous supplier selection and awarding contracts only to suppliers who can provide the required level of service at the lowest possible prices Answers to part (b), section i should have explained how a purchaser in the public sector complies with the regulatory requirement for competitive supply. This might have been in terms of the public sector purchaser ensuring that competitive source selection procedures, such as competitive tendering, are used. For smaller spends, quotations should be obtained from a number of potential supplier (typically a minimum of three). For higher value spends, competitive tendering should be used. Answers to section ii, requiring an explanation of how a purchaser in the public sector complies with the regulatory requirements for accountability, should have referred to the rules laid down by government bodies. In the United Kingdom, these are the National Audit Office, the Audit Commission and the Public Accounts Committee. Candidates from outside the UK could have referred to similar bodies in their own country. These bodies monitor the achievement of value for money and public sector organisations must have detailed procedures and audit trails that can be monitored. The strongest answers to part (a) would have identified three public sector objectives in detail, gone on to explain their impact on procurement activities and provided illustrative examples from the candidate's own country. For part (b), section (i), stronger answers would have explained the process. For example, open tendering ensures a large number of potential suppliers taking part, enhancing competitiveness. Selective tendering involves fewer suppliers, using only those with the capability, but it still allows a number of suppliers to be involved. In the case of part (b) section (ii), higher marks could be gained by explaining that the process is visible. This is important because public funds come mainly from taxpayers, to whom purchasers are ultimately accountable. A significant number of candidates were unable to identify three public sector objectives in part (a). Instead, they suggested items such as ensuring that all laws and regulations are complied with and ensuring that taxes are paid. Some candidates, while correctly identifying three objectives, did not go on to answer the second part of the question and explain their impact on procurement activities. For part (b), section (i), some candidates answered the question without mentioning the word 'tendering' which is a key part of the answer. In the case of section (ii), some answers did not mention the government bodies, which have a clear role in ensuring accountability. JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 6/7

7 Concluding comment: In general terms, neither part of this question was answered particularly well. Many candidates did not achieve a mark of a pass standard, because of the approaches outlined above. There were, however, a few answers of a high standard, with good responses to both parts and these were rewarded by a mark of a merit, or distinction pass standard. JULY 17_D1_EXAM REPORT _LEARNER_COMMUNITY_FV 7/7