Supplier appraisal is a crucial step in achieving value for money in every purchase. Acting as a buyer, you need to assess various aspects of suppliers to choose the best one who is capable of fulfilling the business’ needs. One key consideration is the supplier’s financial health, which holds strategic importance for the buying organization. The question is: how can buyers properly assess a supplier’s financial capabilities? According to the CIPS study guide, buyers are encouraged to review the supplier’s…

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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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In the L4M1 exams, many students frequently encounter questions related to procurement policies, procedures, and processes. Some struggle to elaborate on their answers regarding policies because they don’t fully understand what policies are or where they originate from. In this post, I will outline a classic hierarchy (Figure 1) that shows how broad strategies are refined into actionable steps. Stage 1: Coporate strategies An organization is established with a specific mission. Its leaders begin with a broad goal and strategic…

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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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CIPS suggests that the buying organization has many opportunities to generate savings in the first stage of the procurement cycle. As a buyer, what should you do to add value during this phase? Define Business Needs Typically, procurement needs are triggered by an effort to solve a problem or seize an opportunity. However, not every business need is aligned with adding value to the organization. When receiving requisitions, it’s important to ask tough questions to challenge and clarify the actual…

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Hello everyone, We’re excited to announce the upcoming launch of a class for the CR module! Due to scheduling constraints, we’ll be offering classes for CR modules including L4M1, L4M8, L5M1 and L5M4. In each module, the course includes 18 revision sessions, and the fee is $70 per module. The time will be arranged according to both parties’ schedules. If you’re interested in joining, we’d love to hear which course you’re most excited to take, feel free to reach out…

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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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