CAPEX and OPEX are emphasized in CIPS Level 4 and are frequently asked in the exam. CAPEX and OPEX is one of purchasing categorization approaches based on the nature of the purchase. CAPEX stands for CApital EXpenditure and OPEX stands for Operational EXpenditure. Are there any differences when sourcing CAPEX and OPEX? To answer this question, we should begin to analyse the features of these purchases, as they determine the specific requirements in the sourcing process. CAPEX ( Capital Expenditure)…

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In the previous post, we discussed the types of stakeholders that can impact on procurement and supply activities. If we stop at stakeholders classifications, it won’t lead to any meaningful insights. According to CIPS study guides, it is recommended to manage stakeholders using Mendelow’s Stakeholder Materix. Each purchasing project may attract interest from different stakeholders and each of themholds different levels of power. Hence, it is very important to adopt appropriate management strategies tailored to each stakeholder. Mendelow uses 2…

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Stakeholder management is emphasized in the CIPS Level 4 study guides, as no company can operate effectively without managing stakeholders. In the CIPS exam, this concept appears in both OR and CR modules, highlighting the importance of a deep understanding of the topic. The exam questions typically focus on stakeholder classification, stakeholder management and its impact on procurement and supply activities. To successfully tackle these challenging questions, students should thoroughly understand the theory and refer it to their own workplace…

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A company may choose to source locally or internationally to leverage the market competition. When sourcing from another country, buyers need to understand legal requirements and other regulation to facilitate customs clearance. If they do not prepare sufficient importing documents, they may face risks such as delivery delay or spoiled goods due to being held at customs. In the CIPS exams, there are 1 or 2 questions asking about mandatory documents required when importing goods. In the post, I would…

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Cost analysis is one of the key elements in a business case. From the perspective of executive management, understanding the true costs of purchased products is essential to ensure that purchases deliver value for money. According to the CIPS study guides, buyers have various methods for analyzing the costs of purchased items, depending on the nature of the purchase and the type of supplier relationship. The nature of the purchase refers to how frequently items are bought, either as one-off…

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Most students are afraid of exam questions involving financial caculation as they struggle to remember the formulas. Many students cram for the exam, which does not allow them sufficient time to absord financial concepts coverd in the CIPS books. You can only keep this content in your head if you understand them deeply and practice regularly. There is variety of financial ratios which provide you with different insights. Selecting appropriate ones will depend on your purposes. In this post, I…

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Once the need is justified, buyers begin seeking the best means to satisfy it. They must assess whether their company can fulfill the requirement internally. Even if they are capable of doing so, it’s still essential to look outward to the market to compare the efficiency of available options. Conducting market analysis is not easy, it demands considerable time and effort. Skilled buyers with profound market knowledge and strong communication skills can obtain valuable insights, leading to informed decisions. If…

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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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CIPS has released the new syllabus content this year. Students can buy new study guides and e-book from CIPS website since late July 2023. This happens every five years. The change from 2013 syllabus to 2018 one was bigger than this time. You don’t have to worry about the changes. They are minor. You can take your time to finish your Level 4 exams. The only exception is L4M8, which has a lot of revision. We have read the new…

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