Continuous improvement is necessary to stay competitive in the market. If companies become complacent with the results, they face the risk of being overtaken by their opponents. One effective method for driving ongoing improvement is benchmarking. It is the process of comparison between your own company with other companies (such as a industry leaderor a strong competitor) to identify weaknesses and opportunities for enhancement…In fact, benchmarking is truly applied in your everyday life by observing and learning from the sucess…

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Based on my experience and insights shared by other CIPS candidates, Porter’s Five Forces are frequently featured in CIPS Level 4 exams. The questions typically focus on the characteristics of the five forces: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitutes, and competitive rivalry. To effectively tackle exam questions on Porter’s Five Forces, you need a deep understanding of the model. As mentioned in previous posts, using exploratory questions like “What?”, “Why?”, and…

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You are a buyer responsible for purchasing office equipment. How can your company assess your performance? They may mismanage your performance if they focus solely on cost savings. CIPS recommends a concept known as “Value for Money”, which your company can use to evaluate your performance more comprehensively. This concept is frequently covered in the exam, so you should spend time researching what it means and how to apply it to your daily work. In the CIPS study guide, several…

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Total Cost of Ownership (TCO) is one of the key concepts in CIPS knowledge. CIPS often includes multiple-choice questions and essay prompts on TCO in its exams, highlighting its importance for procurement professionals. In fact, many purchasers rush to sign on a contract with a supplier who offers lowest price. However, this impulsive decision can lead to additional costs for the buying organization. The supplier offering the lowest purchased price often turns out not to be the best one. Clearly,…

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Before entering a partnership, it’s important to understand your partners. Otherwise, the relationship may quickly fall apart. This concept also applies to personal life, many couples break up due to conflicting mindsets. Therefore, understanding your partner’s culture is crucial. This is especially true during negotiations: when you’re aware of a supplier’s cultural background, you can anticipate their negotiation style and the authority of their representatives in the negotiation. According to Charles Handy, there are four main types of organizational culture:…

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Through our statistics, CIPS typically includes 5–6 exam questions on types of inventory costs. Many students confuse these two types of costs, and they may lose marks on such questions because they cannot accurately identify the elements of acquisition costs and holding costs. Acquisition costs refer to the total expenses incurred when purchasing goods or services. These costs cover all activities from identifying the need to making the payment to the supplier. This means that acquisition costs include more than…

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As I said in previous posts, vocabulary is very important to pass the CIPS exam. Clearly, you need a combination of various skills such as question analysis ability, time management skill and so on to achieve high exam performance. However, in this post, I just organize the new vocabulary for L4M2 that you can use for your revision. We provide CIPS practice questions with answers and detailed explanation, besides they are updated regularly to reflect the actual exam. If you…

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Power is the ability to influence others. Therefore, the bargaining power of the buyer refers to a buying organization’s ability to influence its supplier. Most people aim to maximize their power in various ways to achieve favorable outcomes in commercial negotiations. The level of bargaining power can vary depending on the specific market and the size of the companies involved. For example, consider sourcing utilities for a manufacturing company. Due to high production levels, utility costs represent a significant portion…

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You can see barcodes printed on many products around us. But have you ever wondered about the benefits of these barcodes? They are created to streamline inventory management and improve business productivity. In manufacturing, barcodes are often printed on all types of inventory, including raw materials, components, work-in-progress, and finished products. Each barcode is assigned to similar products. For example, if a company purchases a consignment of 10,000 screwdrivers, it’s not necessary to print 10,000 different barcodes. Instead, the same…

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You may be familiar with supplier performance management, where various KPIs are used to measure suppliers’ performance. Based on these metrics, performance is recorded, tracked, and continuously improved. The same approach applies to inventory management activities. You should not underestimate the role of inventory management in business development. Inventory represents company assets that need to be managed carefully and optimally. There are several KPIs you can use to monitor inventory management effectively. Delivery performance This metric measures the percentage of…

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