CIPS Exam Report for Learner Community:

Qualification: Diploma in procurement and supply

Unit: D1 - Contexts of P&S
Exam series: July 2013

INFORMATION FOR CANDIDATES

The Principal Marker’s report is written in order to provide the learner community with feedback relating to
the examination. It is designed as a tool for candidates - both those who have sat the examination and those
who wish to use as part of their revision for future examinations.

Candidates are advised to refer to the Examination Techniques Guide on the CIPS website as well as this
Principal Marker’s report.

The Principal Marker’s report aims to provide the following information:

An indication of how to approach the examination question

An indication of the points the answer should include

An indication of candidate performance for the examination question

Each question has a syllabus reference which highlights the learning objectives of the syllabus unit content
that the question is testing. The unit content guides are available to download at the following link:
http://www.cips.org/studyqualify/cipsqualifications/syllabuses/

ADDITIONAL SOURCES OF INFORMATION

The Supply Management magazine is a useful source of information and candidates are advised to include it
in their reading during their study. Please see the following link to the Supply Management website:
http:/www.supplymanagement.com/

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Question 1 – Learning Outcome 1

(a) Define the term ‘stakeholder’ in relation to an organisation. (5 marks)

(b) Describe the interests of TWO internal stakeholders of the procurement function. (10 marks)

(c) Describe how the TWO internal stakeholders, identified in part (b), might contribute to
(10 marks)
procurement activities

LO1.4 Differentiate the stakeholders that a procurement function might have.

This question was focussed on defining the term stakeholder in general and testing the
understanding of internal stakeholders’ interaction (interests and contribution to) with procurement

Part (a) required a definition of the general term stakeholders and good answer content defined
individuals or group who both influence and are affected by the actions and outputs of an
organisation. Formal definitions could have been quoted and many combinations of wording was
acceptable but the basis is the relationship. Stronger answers also referred to the three types of
stakeholders (internal, external and connected). Answers providing relevant examples also gained
marks.

Answers that did not gain marks, if the definition was not clear and the depth of answer was not
evident.

A pass grade in parts (b) and (c) was achieved by identifying two relevant INTERNAL stakeholders of
the Procurement function and describing a number of interests that the stakeholder has regarding
procurement activity and then the contribution made by these stakeholders. TWO stakeholders
were required so that the 10 marks for part (b) were split into 5 for each stakeholder. The same
applied to part (c). Examples such as marketing, finance, operations and engineering
departments/managers were acceptable. Budget holders and end users were acceptable answers if
set in context of their connection to the procurement function. Directors/managers and employees
were also stakeholders again if set in context to the question. The public sector has a vast range of
internal stakeholders and assessor discretion was used if these were identified.

Answers stating procurement managers or buyers did not gain marks as these are not stakeholders
to Procurement but part of the function. Answers that described these stakeholders having
employee/Manager interests and contributions gained marks if appropriate. Shareholders are

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EXTERNAL stakeholders. Repetition of answer in part b and c was occasionally an issue
demonstrating a lack of understanding of the distinction of interests and contribution.

Good content covered interests such as a director’s responsibility for the survival growth and profit
of a company and contribution through decision making and planning. Sales and Marketing function
might have quality, promotion schedules and printing services amongst their interests and might
contribute to the procurement function by providing consumer feedback, forecasts and product
specifications

Poorer content lacked depth and breath in answers often describing the stakeholder’s role in general
rather than directly answering the question.

Question 2 – Learning Outcome 2

(a) Outline THREE pre contract award stages of the sourcing process. (9 marks)

(b) Explain FOUR advantages for an organisation of following a structured sourcing (16 marks)
process.

(a) LO 2.1 Explain the main aspects of the sourcing process with a focus on stages before the
contract is awarded.
(b) LO 2.4 Analyse the relationship between achieving compliance with processes and the
achievement of outcomes

Part (a) required an outline, a brief description, of THREE stages (3 marks each) and part (b) required
a more in-depth explanation of FOUR advantages (4 marks each). Command words are reflected in
the amount of marks awarded and answers should be tailored to reflect this.

Discretion was used to account for the many varied interpretations of the stages in a generic
sourcing process as examples were often drawn from the candidate experiences.

Good content included three stages before contract award such as identifying needs, specification,
developing contract terms, sourcing the market, appraising suppliers, tendering, analysing tender
responses and negotiation a included and brief description about the activities involved.

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Answers that did not gain marks if the stages were simply listed or lacked some depth in answer. A
common theme appeared to focus a lot of time on this question with lengthy answers for each stage.
It is important that candidates read all questions initially and plan the answers with appropriate
times. The command word and mark allocation are good guides. Spending more time on this 9 mark
question lost valuable time for later answers.

Part (b) generated a wide range of answers and higher marks were gained by focussing on the
benefits of the structured nature of a sourcing process such as all tasks are performed without gaps,
consistency in approach, it prevents conflict, supporting compliance allows devolution of some tasks.

Appropriate marks were awarded to answers of a more general procurement benefits nature but
without linking this to the process higher marks were not achieved.

Question 3 – Learning Outcome 3

(a) Explain FOUR advantages for an organisation of adopting a centralised procurement

structure. (16 marks)
(b) Explain the following IT systems used by the procurement or supply chain function:
(i) ‘Enterprise Resource Planning’
(ii) ‘Materials Requirement Planning’
(iii) ‘Purchase to Pay (P2P)’.
(9 marks)

LO 3.3 Compare the different structures of a procurement function with a focus on the centralised
structure.
LO 3.4 Explain the common IT systems that can be used by a procurement or supply chain function

Question 3 was in 2 parts. Part (a) asked for FOUR advantages which a total of 16 marks, up to 4
marks are allocated to each advantage (any answers above four advantages was not given any
marks) and part (b) split into a further 3 parts so that mark allocation is very clear. Both parts
required an explanation so that depth of answer was required.

Good content for Part (a) included a clear separation of four advantages of a centralise procurement
structure such as specialisation of knowledge and skills, consolidation of requirements, greater co
ordination of activities, standardisation of procedures and specifications, better control and

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avoidance of conflict. Higher scoring answers explained the nature of the centralised structure and
differentiated it from a decentralised structure.

Weaker answers lacked depth seen in both content and the short length of answers. Occasionally
more answers were given that were asked for. Candidates should note that depth of answer and
examples will gain higher marks but answers in excess of that required will not and will simply waste
valuable exam time. It is important not to simply write all that is known about a subject. Some
answers were poorly structured making it difficult to distinguish the four answers given. Higher
scoring answers showed some evidence of planning which helps the structure of an answer.

Good answers for part (b) demonstrated a clear understanding of the 3 systems. ERP is a single data
base to manage a wide range of functions and resources across a business. It offers real time
solutions. MRP is a set of records, decision rules and procedures to manage demand. P2P is a two
way flow of transactions taking a purchase requisition through to payment of invoice.

The vast majority attempted to answer this question and many answers gained high marks but some
did not gain marks by not demonstrating a clear understanding of the subject matter particularly ERP
and sometimes just rewording the question.

Question 4 – Learning Outcome 4

Compare FIVE characteristics of manufacturing sector organisations with those of retail

sector organisations.
(25 marks)

LO 4.1 Identify different industrial sectors with a focus on the characteristics of manufacturing and
retail.
This single part question, although different to the other questions, is clear in its mark allocation. The
questions asked for a comparison of FIVE characteristics therefore up to 5 marks are available for
each answer. The command word is comparison requesting a characteristic of one organisation to be
compared with the characteristics of the other organisation (similarities as well as differences).

Good content was clearly structured to identify the five characteristics and the comparison made
was in enough detail to warrant the marks. Different styles of answering emerged and marks were
awarded for content and relevance to the question. Answers which described one sector and then
afterwards another were marked appropriately but without linking /comparing gained minimal
marks. Answers given in a table form again were awarded marks for appropriate content but it

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should be noted that the expectation of a single 25 mark question is a well structured essay style
answer.
Characteristics compared included some of the following; materials purchased for transformation or
resale, stock holding, demand planning, product range, value and lifecycle, supplier relationships,
stakeholder relationships and lead-times.

Answers did not gain higher marks particularly in depth of answers but also where there was a lack
of structure or clarity as to which five characteristics were being compared. Some answers appeared
to have more than five characteristics mentioned but no further marks were gained for more than
five. Some answers were generic descriptions of characteristics in each sector but lacked the
‘comparison’ asked for in the question. Most answers highlighted differences between the two
sectors with relatively few answers explaining similarities. Again structure was an issue for this essay
style question making it sometimes difficult to distinguish the comparison.

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