L4M4 is the longest, and perhaps the hardest module of whole Level 4 Diploma. Across result statistics, it always has the lowest pass rate. But this module is not a kind of big deal if you know where to focus on. Our tips: Divide the module into three major sections and study carefully.
Section #1: Sourcing process
This is the longest section in the module. It comprises of Chapter 1 and Chapter 2 in the book. You should study the following areas:
- Tactical and strategic sourcing
- Types of sourcing: Single sourcing, dual sourcing and multiple sourcing, especially their advantages and disadvantages
- Kraljic matrix
- Different processes to select supplier, including request for quotation, open tendering, restricted tendering and negotiated tendering. You should know when they are used.
- The use of pre-qualification questionnaire
- Assessing supplier’s financial position, including credit rating and financial ratio analysis. This is very important part of the module. You’ll need to know:
- The sources of financial data
- Major financial statements and its contents
- Some ratios such as current ratio, quick ratio, gearing, etc
Section #2: Purchasing from international suppliers
Many questions in the exams come from this section. To be successful in the exam, you’ll need to know:
- Why a country imposes tariff or quota on imported goods.
- Documentations in import and export, most notably bill of entry, bill of lading, certificate of origin, insurance certificate…
- Incoterms, including its author, basic categorization of Incoterms, some common terms such as EXW, DDP, etc.
- Payments in international trade, risks of supplier and buyer in each payment method.
- How to hedge against currency fluctuation in international trade.
Section #3: Ethical and responsible sourcing
CIPS promote ethical and responsible practice in procurement profession. They also spend a notable part of the module discussing ethical and responsible issues. This part is often easier than the former two sections, but you still need to study thoroughly. The following areas can be found in the exam:
- Definitions of some ethical issues in procurement: bribery, corruption, modern slavery, environment
- Supplier audit
- Triple bottom line.
If the above areas are not enough for your studying, you can purchase our practice tests, each of them has almost 200 questions to practice. Purchase now with just $9.99 per module by applying the coupon code HAPPY2022.