How to pass CIPS L4M1 questions on procurement and supply chain management

The first thing you need to know about passing CIPS L4M1 exams is that this is a constructed response exam (CR), meaning you have to construct your answers unlike other modules where you have multiple choice questions

In short you need to know how to answer CIPS CR exams

Many students preparing for the CIPS L4M1 exam make the mistake of revising topics in isolation. They learn a definition of procurement or memorise a definition of logistics and then move on to the next topic.

The main issue with this approach is that the CR exams rarely asks candidates to simply define terms.

What happens often is, the examiner presents a business scenario and asks candidates to compare concepts, evaluate their importance or analyse their impact on organisational performance.

Which is why you need to practice answering questions, something that this CIPS L4M1 questions and answers PDF gives you

In short…

To pass CIPS L4M1 exams, you have to understand how all the concepts you have studied connect together within a real supply chain environment.

Key concepts to remember in CIPS L4M1 assessment criteria 1

What is procurement and why is it important in CIPS L4M1?

Procurement can be defined as the process of acquiring goods, services or works from external suppliers.

But remember procurement is not just about purchasing, it is a whole process from need identification all the way to asset disposal, in fact procurement professional tend to be responsible for;

• Identifying suitable suppliers
• Negotiating contracts
• Managing supplier performance
• Reducing costs
• Managing supply risks
• Supporting innovation
• Delivering sustainability objectives

Take a manufacturing company as an example, if the company needs raw materials for production, the procurement team will evaluate suppliers, negotiate pricing agreements and ensure that materials are available when required.

In other words, procurement will play a strategic function that focuses on obtaining value from external supply markets and not just an administrative activity of purchasing

What is a supply chain and how does it differ from procurement?

One of the most commonly asked assessment criteria 1 CIPS L4M1 exam questions is how procurement compares with supply chain management.

For starters a supply chain can be defined as the sequence of organizations, activities, resources and technologies involved in producing and delivering goods or services to the final customer. This is what makes it a chain, from one production level or organization to another.

A typical supply chain may include parties like:

• Raw material suppliers
• Manufacturers
• Warehouses
• Distributors
• Retailers
• Customers

Procurement on the other hand is part of supply chain that focuses primarily on acquiring resources from suppliers or whoever has them, so at to get them to the person who needs them.

In short…

While procurement is mostly concerned with obtaining inputs, supply chain management ensures those inputs are transformed into outputs and delivered efficiently to customers or the end user.

Understanding CIPS L4M1 supply chain networks and supply chain tiering

The thing you must remember here is that organisations rarely operate with a single supplier.

What often happens is that they have a complex networks of suppliers operating at different levels.

This is known as a supply chain network, and within these networks, suppliers are often classified into tiers.

What is supply chain tiering?

Supply chain tiering refers to how we categories suppliers based on their distance from the buying organisation.

Example of supply chain tiering;

• Tier 1 suppliers

These are suppliers who provide products or services directly to the buying organisation.

For instance, a car manufacturer may purchase tyres directly from a tyre producer.

• Tier 2 suppliers

In this case you have suppliers who provide goods or services to tier 1 suppliers.

And from the car manufacturing example, a tyre producer may purchase rubber from another supplier and then supply the tyre to the buying organization, meaning the tyre manufacturer is tier 1 supplier to the buying organization and the rubber supplier is tier 2

• Tier 3 Suppliers

These suppliers provide goods or services to Tier 2 suppliers.

Logistics and Materials management difference according to CIPS L4M1

CIPS L4M1 procurement and supply chain management questions and answers pdf download also contains questions that test your knowledge on logistics and material management

What is logistics?

Logistics, from your CIPS L4M1 studies, focuses on the movement and storage of goods throughout the supply chain.

And typical logistics activities you should know include:

• Transportation
• Warehousing
• Inventory movement
• Distribution planning

Remember that the primary objective of logistics is to ensure products reach the right place at the right time.

What about material management?

Materials management focuses on ensuring that materials are available to support operations.

In this case you have activities such as;

• Inventory planning
• Stock control
• Material scheduling
• Storage management

Where logistics focuses on movement, materials management focuses on availability.