CIPS L4M6 Supplier Relationships Online Training
CIPS L4M6 Online Training
The questions for L4M6 were last updated at Nov 22,2024.
- Exam Code: L4M6
- Exam Name: Supplier Relationships
- Certification Provider: CIPS
- Latest update: Nov 22,2024
A competitive advantage can be gained by doing what?
- A . Increasing your prices
- B . Engaging in market research
- C . Building better relationships with primary stakeholders
- D . Completing formal tenders for all buying requirements
C
Explanation:
The correct answer is ‘Building better relationships with primary stakeholders’. This is a direct quote from the start of chapter 2.2: ‘building better relationships with primary stakeholders such as employees, customers, suppliers and communities could lead to increased shareholder wealth by developing a competitive advantage’. The other three options wouldn’t give you a competitive advantage; increasing prices would do the opposite, engaging in market research won’t give you a competitive advantage unless you do something with that research such as implement a change to your business, and completing formal tenders for everything would be a waste of time and resources- there’s no need to tender for low value, low risk items. See p.80
Which of the following are considered ‘wastes’ which can be removed from a business? Select THREE.
- A . Over-processing
- B . Stockout
- C . Equity
- D . Transportation
- E . Inventory
A,D,E
Explanation:
The seven wastes (as defined by Taiichi Ohno) can be remembered as Tim Wood; transportation, inventory, motion, waiting, over-processing, over-production, defects. Some
people add an S onto the end of Tim Wood to make Tim Woods (the s is for skills). In some modules of CIPS, they refer to 8 wastes and include skills, but in M6 they’ve only put the 7 on p.70.
Agile Cars Ltd is creating a ‘lean’ business model which involves receiving deliveries of components only when they are required .
Which of the following ‘wastes’ is being removed from the business?
- A . Transportation
- B . Defects
- C . Over-production
- D . Inventory
D
Explanation:
This would reduce inventory (holding stock). Inventory is considered a business waste because it costs money to store stuff (e.g. paying the rent on a warehouse, electricity to light it up etc). If you can reduce the need to store materials and components on site- you reduce costs. You also save time because you get deliveries when you need them- you don’t need to allow for staff unpacking things, storing them away, then going back to them later when they need them. For more information on the 7 Business Wastes see p.70. This comes up in a couple of modules, so it’s worth remembering.
Gabriel is a procurement manager who wishes to explore a new avenue to procure products for his company. His manager has told him that he should invite internal stakeholders to a meeting to get their feedback. Who should Gabriel invite? Select THREE.
- A . end-users
- B . legal department
- C . customers
- D . suppliers
- E . employees
A,B,E
Explanation:
Internal stakeholders are those who work within the business so include the legal department, employees and end-users. End-users mean those people and departments who will be using the product or service. For example if Gabriel is procuring new software-an end-user would be anyone who would be using that software (whether they’re employees, volunteers or agencies). CIPS outlines types of stakeholders on p.64
The Queen Victoria is a traditional British pub which serves a range of alcoholic beverages. It has a partnership relationship with a local brewery which supplies several types of beer and cider. Logistics is a key concern for the Queen Victoria as deliveries must be made when there is room in the cellar to store the barrels of beer and cider. In what ways could the logistics risk be reduced?
- A . Using several suppliers instead of one
- B . Batch ordering
- C . Sharing up-to-date information
- D . Issuing POs electronically.
C
Explanation:
The logistics risk can be reduced by ‘Sharing up-to-date information’. If the Pub tells the supplier when it’s running low, they can then time the deliveries more accurately. P. 136. A lot of the questions on the ‘Partnerships’ chapters of the book are common-sense questions like this. It involves reading the question and using logic, rather than relying on your knowledge of procurement. If you found this question easy C that’s a good sign for the exam.
One of the fist stages of designing a Partnership is to come up with joint KPIs. These
should be:
- A . Measurable, achievable and time-bound
- B . Relatable, specific and measurable
- C . Time bound, difficult and relevant
- D . Significant, measurable and achievable
A
Explanation:
The correct answer is Measurable, achievable and time-bound. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.
Which of the following are not stages of team development? Select TWO.
- A . Forming
- B . Mourning
- C . Achieving
- D . Adjourning
- E . Accepting
C,E
Explanation:
This question is very, very similar to a real exam QUESTION NO: and is a really mean one. The CIPS study guide describes stages of team development as forming, storming, norming and performing. Of those listed in the book only forming is listed above .
What the textbook fails to tell you is that some people add on two additional stages to this model which are mourning and adjourning. I strongly recommend doing some further reading on this (it’s called the Tuckman Group Development Model) as it comes up a lot in the exam and the study guide doesn’t really go into enough detail.
Varying levels of commitment is one reason why many partnerships fail .
Why is this?
- A . It can lead to a lack of trust
- B . One party doesn’t fulfil their KPIs
- C . Sufficient time and resources are put in
- D . Less profit is made.
A
Explanation:
The correct answer is ‘It can lead to a lack of trust’ C this is a quote from p.162. The other answers are all incorrect; in a partnership KPIs are joint between the partiesC so there wouldn’t be a situation where one party doesn’t fulfil their KPIs. Commitment doesn’t necessarily have a direct correlation with profit so that answer is incorrect. ‘Sufficient time and resources are put in’ is a positive thing, so can’t be a reason who a partnership fails.
The CEO of a business has asked his procurement manager to source new machinery for the factory. This machinery will help create a new line of products which will give the company a competitive edge. The CEO is heavily invested in this procurement activity as profits have been lower than expected this year and this new line of products could help increase profitability .
How should the procurement manager include the CEO in the procurement activity?
- A . It is important to keep the CEO informed of all decisions that are made
- B . It is important to keep the CEO satisfied as he runs the business
- C . The CEO is a key player- so it is important he is involved early in the process
- D . The CEO is a key player- so should be given regular updates on progress
C
Explanation:
The correct answer is ‘The CEO is a key player- so it is important he is involved early in the process’. The CEO has high power and high interest which puts him in the top right-hand corner of Mendelow’s Stakeholder Matrix (p.81). CIPS says Key Players should be involved early in the procurement process (p.82).
In the public sector, there are many sources of information that a buyer can use to identify a suitable supplier .
Which of the following could be used? Select THREE
- A . Intranet
- B . Tradeshows
- C . OJEU
- D . Internal stakeholders’ knowledge
- E . Procurement Platforms
B,D,E
Explanation:
The correct answers are; tradeshows, internal stakeholders’ knowledge and e-procurement platforms. Intranet is incorrect as this is an internal system so you wouldn’t find information on external suppliers on here the careful not to confuse intranet with internet). OJEU is also incorrect; this is the platform on which tender opportunities in the public sector are published- its not a list of suppliers.
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