Level 4

Diploma in
Procurement
and Supply
Power up your career

4
CIPS LEVEL

Ref: 603/3924/X
2018 Syllabus | Version 2
CIPS LEVEL

4
Contents
How to read a CIPS syllabus 4

Your qualification 5

What will I study? 6

About our exams and your study comitments 7

Scope and Influence of Procurement and Supply (L4M1) 8

1.0 Understand and analyse the added value that can be achieved through procurement and supply
chain management 9
2.0 Understand and analyse the key steps when procuring goods or services 10
3.0 Understand and analyse aspects of organisational infrastructure that shape the scope of
procurement and supply chain functions 11
4.0 Understand and analyse the need for compliance with requirements when undertaking
procurement activities in different sectors 12

Defining Business Need (L4M2) 13

1.0 Understand how to develop a business case for requirements to be sourced from external suppliers 14
2.0 Understand market management in procurement and supply 14
3.0 Understand the use of specifications in procurement and supply 15

Commercial Contracting (L4M3) 16

1.0 Understand the legal issues that relate to the formation of contracts 17
2.0 Understand the fundamentals of specifications and key performance indicators that are included
in contractual arrangements made with suppliers 18
3.0 Understand the key clauses that are included in formal contracts 18

Ethical and Responsible Sourcing (L4M4) 19

1.0 Understand options for sourcing requirements from suppliers 20
2.0 Understand the key processes that can be applied to the analysis of potential external suppliers 21
3.0 Understand compliance issues when sourcing from suppliers 21

Commercial Negotiation (L4M5) 23

1.0 Understand key approaches in the negotiation of commercial agreements with external organisations 24
2.0 Know how to prepare for negotiations with external organisations 25
3.0 Understand how commercial negotiations should be undertaken 26

Supplier Relationships (L4M6) 27

1.0 Understand the dynamics of relationships in supply chains 28
2.0 Understand processes and procedures for working successfully with stakeholders 29
3.0 Understand the concept of partnering 30

Whole-Life Asset Management (L4M7) 31

1.0 Understand methods for the storage and movement of inventory 32
2.0 Understand the key elements of effective inventory control 32
3.0 Understand the concept of whole-life costing 33

Procurement and Supply in Practice (L4M8) 34

1.0 Demonstrate the application of the procurement cycle 35
2.0 Demonstrate the application of the stages of the procurement process 35
3.0 Demonstrate the application of whole life-asset management 36
4.0 Demonstrate the application of environmental, social and governance principles in a range of
sectors and industries 36

3
How to read a CIPS syllabus
Before getting started on any of our qualifications we encourage you to read the syllabus.
Our examiners will use the syllabus to set the exam questions to test your knowledge and
understanding of the content.
Each syllabus is split into topic modules. Each module is further broken down into learning
outcomes, assessment criteria and indicative content.

Learning Outcomes

This is the overarching theme of

the content for the module that
you are studying. It’s the first Learning outcomes, ass
essment criteria and
indicative content
part in the list of items that our
examiners will use to write their 1.0 Understand and analyse
the added value that
procurement and sup can be achieved through
questions to test your knowledge ply chain managemen
t
and understanding. 1.1 Compare the concepts
of 1.1.1
procurement and sup
ply chain management and
chain management supply chain networks
1.1.2 Compare the role and
function of supply chain
management with proc
urement
1.1.3
Assessment Criteria 1.1.4
chains

This will give you a breakdown of 1.1.5

1.1.6
the learning outcome or theme. recycling
Take notice of the command 1.2
1.2.1
words used at the start of each sources of added valu
procurement and sup
e in
1.2.2
ply
assessment criteria. The meaning management

of a command word can be found 1.2.3

suppliers
in our Guide to CIPS Exams.  Our 1.2.4 Other sources of added
value: innovation,
examiners consider these when sustainability and market
development
creating questions to test your 1.2.5
1.3 Describe the categori
knowledge and understanding. of spend that an
es 1.3.1 Typical breakdown of orga
nisational costs
organisation may represented by procurem
ent of goods, services
purchase and constructional wor
ks
1.3.2 Stock and non-stock proc
urement
1.3.3 Direct and indirect proc
urement
Indicative Content 1.3.4 Capital purchas
es and operational exp
enditures
1.3.5 Services procurem
ents
1.3.6 Utility procurem
The following content provides ent
1.3.7 Commodity procurement
examples of what you could be 1.4
asked questions about in an stakeholders of 1.4.1
procurement or supply
exam but remember this is not an chain functions
1.4.2 Examples of stakeholder
supply chain function
s of a procurement and

exhaustive list. You should aim to 1.4.3 Mapping stakeholders

for a procurement and
study and thoroughly understand supply chain function

each topic in this content list.

cips.org/qualifications
Your qualification
CIPS qualifications are regulated internationally to ensure we offer a recognised, professional
standard in procurement and supply. CIPS Level 4* Diploma in Procurement and Supply is a
vocationally related professional qualification. Formal recognition is included within the regulatory
frameworks of an increasing number of countries such as the UK (England, Wales and Northern
Ireland), UAE (including Dubai) and Africa (including Botswana and Ghana), Trinidad & Tobago.
Further information on this recognition and the details of corresponding qualifications levels
for other international qualifications frameworks are detailed on our website. Our regulated
qualifications are based on the content in CIPS Global Standard for Procurement and Supply**.
Our members can therefore have confidence that our qualifications reliably indicate the standard
of knowledge, skills and understanding required for the profession.

A step up from the Level 3 Advanced Certificate in In this way successful learners will possess
Procurement and Supply Operations, the Level 4 transferable workplace skills, developing their
Diploma in Procurement and Supply is a stepping operational and tactical abilities as they strive
stone to study on the CIPS Level 5 Advanced for managerial roles and responsibilities. It
Diploma in Procurement and Supply. The content is aimed at those in the profession who have
has been written using the CIPS Procurement and procurement and supply activity at the heart of
Supply Cycle as its focus, which presents a cyclical their role. Learners will be expected to provide
process of key steps faced by those procuring advice and guidance to key stakeholders on
goods or services. The Diploma offers the most the performance of organisational procedures
common entry route to the profession and should and processes associated with procurement
be used by learners to develop a professional and supply and will aspire to manage
‘tool box’ which learners can apply in the practical developments in and improvements to the related
environment and further develop at Levels 5 and 6. functions. Transferable skills are those such as
communication, teamwork, and planning and
completing tasks to high standards, all enable the
learner to add value to the organisation.

Entry level Entry level Highest entry level

Level 4 Level 6
Level 2 Level 3 Level 5
Certificate in Advanced Certificate Diploma in Advanced Diploma Professional Diploma
Procurement and in Procurement and Procurement in Procurement and in Procurement and
Supply Operations Supply Operations Supply Supply
and Supply

NEXT STEPS
This qualification provides progression to the CIPS Level 5 Level 5
Advanced Diploma in Procurment and Supply

*Referes to levels within the UK RQF. Other regulatory bodies may have different corresponding levels
** https://www.cips.org/intelligence-hub/global-standard-for-procurement-supply

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What will I study? 60
Credits required
for completion

Eight CORE modules make up 60 required credits

CORE Level 4
Scope and Influenece of Procurement and Supply (L4M1)
12
CREDITS

CORE Level 4 CORE Level 4

Defining Business Need 6
CREDITS
Commercial Contracting 6
CREDITS
(L4M2) (L4M3)

CORE Level 4 CORE Level 4

Ethical and Responsible Sourcing 6
CREDITS
Commercial Negotiation 6
CREDITS
(L4M4) (L4M5)

CORE Level 4 CORE Level 4

Supplier Relationships 6
CREDITS
Whole-Life Asset Management 6
CREDITS
(L4M6) (L4M7)

CORE Level 4
Procurement and Supply in Practice (L4M8)
12
CREDITS

Who is it for? On completion, you will be able to analyse,

interpret and evaluate relevant information and
This qualification is the essential toolkit for anyone ideas and have an informed awareness of differing
planning a career in procurement and supply. perspectives and approaches within the profession.
Developed and written using CIPS Procurement You will also be able to review the effectiveness and
and Supply Cycle as it’s focus, it is at the same appropriateness of methods, actions and results.
level as the first year of an undergraduate degree
course. It’s suitable for those in operational roles Entry requirements
or those managing or supervising the procurement
and supply function who want to develop their
This is the only entry point onto our Diploma
career and work towards MCIPS Chartered
qualifications. A minimum of at least two A-levels
Procurement and Supply Professional. (or international equivalent) or a CIPS Level 3
Advanced Certificate qualification is required.
What will I learn? Alternatively, you will need a minimum of
two years’ relevant experience in a business
You will learn about making procurement and environment.
supply happen within an organisation, and you will
be equipped with an essential range of knowledge Credit values
and tools that you can apply immediately in
your workplace. Learn how to apply practical, To gain a qualification you are required to
theoretical and technical knowledge, gain a clear complete a total number of credits. This is a way of
understanding of procurement and supply and quantifying the required number of study hours.
develop the ability to address complex, non-routine 1 credit is equivalent to 10 hours of study. Each
problems. module is given a credit value of 6 or 12 credits.

*https://www.cips.org/intelligence-hub/procurement/procurement-supply-cycle
cips.org/qualifications
About our exams and your
study commitments

Objective response exam format Guided learning hours (GLH)

(OR) It is expected that you will undertake
These questions allow you to select 250 GLH. The definition of guided
a response from a list of possible learning hours is: ‘A measure of the
answers. You will find these types of amount of input time required to
exams across all our qualifications achieve the qualification. This includes
levels and they are marked by lectures, tutorials and practicals,
computer and then moderated by as well as supervised study in, for
CIPS examiners. example, learning centres and

OR
workshops’.
250
GLH HOURS

Constructed response exam Self-study requriement (SSR)

format (CR) Additionally, we recommend that
These questions require you to you also commit to at least 335 SSR
create or ‘construct’ a response to hours. This includes wider reading
the question such as an essay or case of the subject areas and revision to
study. You will find this type of exam give yourself the best preparation for
in our diploma level qualifications and successfully achieving the qualification.
they will be marked by subject expert
examiners.

CR 335
SSR HOURS

Your total qualification time Total exam time

(TQT) The total exam time for this
The TQT indicates the overall number qualification is 15 hours. All of the
of guided learning hours, additional modules in CIPS qualifications are
self-study and assessment time that is assessed by examination.
required.

600
TQT HOURS
15
HOURS

7
Scope and Influence of
Procurement and Supply 12
CREDITS

(L4M1)

Module purpose

On completion of this module, learners will be able to identify the

key stakeholders through the application of the sourcing process, the
analysis of the procurement cycle and the evaluation of the influence
procurement and supply has as a source of added value for the
organisation.

Module aim(s)

In any organisation, a significant proportion of costs are accounted

for by the purchases of products and/or services, hence organisations
see procurement and supply as a key contributor to their value-added
strategies. Equally, any organisation will also be managing the supply of
products and/or services to their customers, be they internal or those
from other external organisations, consumers or the general public. This
module is designed using the CIPS Procurement Cycle as its basis. It will
provide those who are interested in developing an informed awareness
of different perspectives or approaches within the discipline with an
overview of the key stages and compliance requirements associated with
procurement and supply. It will serve as an introduction for those who
are expected to address complex well-defined procurement and supply
problems that are non-routine in nature.

C Core module
3 Hours exam duration

CR Constructed response exam 120 Hours module learning time

cips.org/qualifications
Scope and Influence of Procurement and Supply (L4M1)
Learning outcomes, assessment criteria and indicative content

1.0 Understand and analyse the added value that can be achieved through
procurement and supply chain management

1.1 Compare the concepts of 1.1.1 Definitions of procurement, supply chains, supply
procurement and supply chain management and supply chain networks
chain management
1.1.2 Compare the role and function of supply chain
management with procurement
1.1.3 Definition and function of supply chain tiering
1.1.4 Definition and issues related to complex supply
chains
1.1.5 Definitions of logistics and materials management
1.1.6 Definitions of waste management and closed-loop
recycling

1.2 Analyse the different 1.2.1 The five rights of procurement

sources of added value in
1.2.2 Defining total life cycle costs or whole-life asset
procurement and supply
management
1.2.3 Achieving five rights of procurement from external
suppliers
1.2.4 Other sources of added value: innovation,
sustainability and market development
1.2.5 Defining value for money

1.3 Describe the categories 1.3.1 Typical breakdown of organisational costs

of spend that an represented by procurement of goods, services
organisation may and constructional works
purchase
1.3.2 Stock and non-stock procurement
1.3.3 Direct and indirect procurement
1.3.4 Capital purchases and operational expenditures
1.3.5 Services procurements
1.3.6 Utility procurement
1.3.7 Commodity procurement

1.4 Differentiate the 1.4.1 Definition of stakeholders

stakeholders of
1.4.2 Examples of stakeholders of a procurement and
procurement or supply
supply chain function
chain functions
1.4.3 Mapping stakeholders for a procurement and
supply chain function

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Scope and Influence of Procurement and Supply (L4M1)
Learning outcomes, assessment criteria and indicative content

2.0 Understand and analyse the key steps when procuring goods or services

2.1 Explain each stage of the 2.1.1 CIPS Procurement Cycle: pre-contract award
CIPS Procurement Cycle stages (stages 1-8 of the CIPS Procurement Cycle)
for generic procurement and supply activities
2.1.2 CIPS Procurement Cycle: post-contract award
stages (stages 9-13 of the CIPS Procurement Cycle)
for generic procurement and supply activities

2.2 Analyse each stage of the 2.2.1 The purpose and added value created at each
CIPS Procurement Cycle in pre-contract award stage (stages 1-8) of the CIPS
relation to adding value Procurement Cycle
2.2.2 The purpose and added value created at each
post-contract award stage (stages 9-13) of the CIPS
Procurement Cycle

2.3 Explain how electronic 2.3.1 Definition and function of e-requisitions,

systems can be used at e-catalogues, e-auctions, e-tendering and online
different stages of the supplier evaluation systems
CIPS Procurement Cycle
2.3.2 The application of electronic systems at each
pre-contract award stage (stages 1-8) of the CIPS
Procurement Cycle
2.3.3 The application of electronic systems at each
post-contract award stage (stages 9-13) of the CIPS
Procurement Cycle

2.4 Analyse the relationship 2.4.1 Organisational and contextual drivers for
between policy and structured procurement and supply processes
process compliance and
2.4.2 Understanding and balancing the relationship
required outcomes
between policy and process compliance with
securing added value and customer service
outcomes in different contexts

cips.org/qualifications
Scope and Influence of Procurement and Supply (L4M1)
Learning outcomes, assessment criteria and indicative content

3.0 Understand and analyse aspects of organisational infrastructure that shape the
scope of procurement and supply chain functions

3.1 Explain aspects of 3.1.1 Conflicts of interest

corporate governance
3.1.2 The need for documented policies and procedures
impacting the
for procurement
procurement or supply
chain function 3.1.3 Organisational accountability and reporting for
procurement roles and functions
3.1.4 Code of ethics in procurement and supply: CIPS
Code of Ethics and ILO (International Labour
Organization) core conventions

3.1.5 The CIPS Code of Conduct

3.2 Analyse the impact of 3.2.1 Topics included in procedures for procurement
organisational policies and supply: responsibilities for procurement,
and procedures on regulations relating to competition, levels of
procurement and supply delegated authority, responsibilities for the stages
of the sourcing process, invoice clearance and
payment
3.2.2 The use of procurement policies, procurement
strategies and procurement manuals
3.2.3 The involvement of internal functions and
personnel in the procurement process

3.3 Examine the different 3.3.1 The role and status of procurement and supply
structures of a chain management within different organisations
procurement or supply
3.3.2 The use of centralised and decentralised
chain function
structures
3.3.3 The use of hybrid structures in procurement and
supply chain functions

3.4 Explain the common IT 3.4.1 P2P systems

systems that can be used
3.4.2 Systems for inventory management
by a procurement or
supply chain function 3.4.3 Enterprise resource planning (ERP)
3.4.4 Communications systems for internal and external
use
3.4.5 Systems used to support e-sourcing, e-tendering
and e-auctions

11
Scope and Influence of Procurement and Supply (L4M1)
Learning outcomes, assessment criteria and indicative content

4.0 Understand and analyse the need for compliance with requirements when
undertaking procurement activities in different sectors

4.1 Classify different 4.1.1 Economic classifications including public and

economic and industrial private sectors, charities, not-for-profit and third
sectors sector
4.1.2 Industrial classifications and sectors such as
manufacturing, retail, construction, financial,
agriculture and service

4.2 Analyse the impact of 4.2.1 Objectives of public sector organisations:

the public sector on improving services, supporting communities and
procurement and supply social value, and equality, diversity and inclusion
chain activities
4.2.2 Regulations that impact on procurement and
supply chain operations
4.2.3 Role of competition, public accountability and
value for money in public sector procurement and
supply activities

4.3 Examine the impact of 4.3.1 Objectives of private sector organisations: market
the private sector on share, shareholder value, environmental, social,
procurement or supply governance and economic viability
chain activities
4.3.2 Regulations that impact on procurement and
supply chain operations
4.3.3 The importance and role of an organisation’s
branding in procurement and supply activities

4.4 Examine the impact of 4.4.1 Objectives and principles of the not-for-profit or
the not-for-profit or third third sector
sector on procurement or
4.4.2 Regulations that impact on procurement and
supply chain activities
supply chain activities in charity and third sectors
4.4.3 Need for procurement and supply activities to
align with organisation context mission and
objectives

cips.org/qualifications
Defining Business Need
(L4M2) 6
CREDITS

Module purpose

On completion of this module, learners will be able to devise a business

case for requirements to be externally sourced and will understand the
role of market management and competitive forces as they specify goods
and services in procurement and supply.

Module aim(s)

The development of a business case and the ability to analyse markets

are key if an organisation is to successfully work with external suppliers.
Similarly, the clear definition of specifications for through-life contracts
is crucial to overall business achievement. This module is designed for
those who are expected to analyse, interpret and evaluate information
on the different types of markets utilised by procurement and supply.
It explores a variety of elements that underpin the development of
business cases and specifications, and considers the options that should
be explored when procurement and supply personnel are involved in
defining requirements.

C Core module
1.5 Hours exam duration

OR Objective response exam 60 Hours module learning time

13
Defining Business Need (L4M2)
Learning outcomes, assessment criteria and indicative content

1.0 Understand how to develop a business case for requirements to be sourced from
external suppliers

1.1.1 Type of purchase such as new purchase, modified

1.1 Analyse how business
rebuy, straight rebuy
needs influence
procurement and supply 1.1.2 Implications of the business needs on the types
decisions of purchase
1.1.3 Role of procurement in developing a business
case

1.2 Identify how costs and 1.2.1 Types of market data that can provide
prices can be estimated information on costs, prices and pricing strategies
for procurement activities
1.2.2 Identification of direct and indirect costs
1.2.3 Producing estimated costs and prices
1.2.4 Estimating the costs associated with whole-life
asset management

1.3 Analyse the criteria 1.3.1 Examples of criteria typically applied in the
that can be applied in development of a business case: costs, benefits,
the development of a options, competitor analysis, alignment with
business case organisational needs, stakeholder requirements
and timescales

1.4 Interpretation of financial 1.4.1 The definition and purpose of financial modelling
budgets and cost models
1.4.2 Cost models and profiling of cash flows
for the control of
purchases 1.4.3 Control of budgets: ways to measure budget
performance
1.4.4 Approaches to budget variances

2.0 Understand market management in procurement and supply

2.1 Analyse the consideration 2.1.1 Manufacturing sector

for procurement and
2.1.2 Construction sector
supply when working with
different markets 2.1.3 Retail sector
2.1.4 Financial sector
2.1.5 Agriculture sector
2.1.6 Service sector

cips.org/qualifications
Defining Business Need (L4M2)
Learning outcomes, assessment criteria and indicative content

2.2 Compare the competitive 2.2.1 Bargaining strength of suppliers and buyers
forces that influence
2.2.2 Availability of substitutes and threat of new
markets
entrants

2.3 Contrast direct costs and 2.3.1 Sources of information to estimate costs and
indirect costs. Consider prices breakdowns and to assess the direct and
the types of data that can indirect costs of purchased goods and services
provide information on
2.3.2 Use information to prepare budgets and assess
cost and price
the scope for price or cost variability

3.0 Understand the use of specifications in procurement and supply

3.1 Analyse the types of 3.1.1 Sources of information used to create

specifications used specifications: external standards, internal
in procurement and expertise and knowledge, other product
supply, and sources of specifications, sustainability considerations and
information that can be internet sources
used to create them
3.1.2 Conformance specifications: drawings, samples,
brand, technical standards
3.1.3 Performance specifications: output, outcome and
functional specifications

3.2 Identify sections used in 3.2.1 Scope

developing specifications
3.2.2 Definition
supporting procurement
and supply arrangements 3.2.3 Description of requirements
3.2.4 Testing and acceptance
3.2.5 Change control mechanisms and remedies
3.2.6 Environmental, social and governance criteria

3.3 Identify the risks that can 3.3.1 Under or over specified need
result from inadequate
3.3.2 Monitoring and review of specifications
specifications and
developed by internal stakeholders
mitigation approaches

3.4 Identify opportunities 3.4.1 Standardisation

to review and enhance
3.4.2 Value analysis
specifications in the short
and longer term 3.4.3 Value engineering
3.4.4 Provide guidance to internal stakeholders on
project or contract implementation

15
Commercial Contracting
(L4M3) 6
CREDITS

Module purpose

On completion of this module, learners will be able to describe the key

elements and legal aspects of formal commercial contracts, analyse
and interpret the fundamentals of specifications and key performance
indicators that are included in contractual arrangements made with
suppliers.

Module aim(s)

In any organisation, a significant element of the procurement and

supply function is based around the contracting process. If they are
to be successful, contracts must be clearly defined, aligned with legal
requirements and contain key clauses and terms. This module is
applicable for all procurement and supply professionals as it highlights
legal principles that professionals should consider when developing
contractual relations.

C Core module
1.5 Hours exam duration

OR Objective response exam 60 Hours module learning time

cips.org/qualifications
Commercial Contracting (L4M3)
Learning outcomes, assessment criteria and indicative content

1.0 Understand the legal issues that relate to the formation of contracts

1.1 Analyse the 1.1.1 Invitation to tender or request for quotation

documentation that can
1.1.2 Specifications
comprise a commercial
agreement for the supply 1.1.3 Key performance indicators (KPIs)
of goods or services
1.1.4 Contract documentation
1.1.5 Pricing and other schedules (such as for health
and safety records, details of supplier’s staff, use
of sub-contractors, non-disclosure/confidentiality
agreements)

1.2 Analyse the legal issues 1.2.1 Invitation to negotiate, also known as invitation to
that relate to the treat in English law
creation of commercial
1.2.2 Principles relating to offer and acceptance,
agreements with
consideration, intention to create legal relations
customers or suppliers
and capacity to contract
1.2.3 Principles relating to the battle of the forms and
precedence of contract terms
1.2.4 Risks presented by contracting on supplier’s
terms
1.2.5 Risks presented by contracting oral contracts
1.2.6 The Vienna Convention provisions for the
International Sale of Goods and the impact on
the formation of a contract
1.2.7 Misrepresentations made at pre-contract award
stages

1.3 Compare types of 1.3.1 One-off purchases

contractual agreements
1.3.2 Framework arrangements and agreements
made between customers
and suppliers 1.3.3 The use of mini-competitions
1.3.4 Call offs
1.3.5 Services contracts
1.3.6 Contracts for the hire and leasing of assets

17
Commercial Contracting (L4M3)
Learning outcomes, assessment criteria and indicative content

2.0 Understand the fundamentals of specifications and key performance indicators

that are included in contractual arrangements made with suppliers

2.1 Analyse the content 2.1.1 Benefits and risks of market dialogue with
of specifications for suppliers
procurement activities
2.1.2 Drafting of specifications to form a binding legal
document

2.2.1 Defining contractual performance measures or

2.2 Appraise examples of key
key performance indicators (KPIs)
performance indicators
(KPIs) in contractual 2.2.2 The use of service level agreements (SLAs)
agreements
2.2.3 Typical KPI measures to assess quality
performance, timeliness, cost management,
resource efficiency and delivery

3.0 Understand the key clauses that are included in formal contracts

3.1 Analyse sources and 3.1.1 Express and implied terms: understand the role
purpose of contractual or use of different types of contract terms
terms for contracts that
3.1.2 The use of standard terms of business by both
are created with external
purchasers and suppliers
organisations
3.1.3 The use of model form contracts

3.2 Recognise examples 3.2.1 Key terms in contracts for indemnities and
of contractual terms liabilities, sub-contracting, insurances, guarantees
typically incorporated and liquidated damages
into contracts that are
3.2.2 Terms that apply to labour standards and
created with external
environmental, social and governance issues
organisations

3.3 Recognise types of 3.3.1 The use of pricing schedules

pricing arrangements in
3.3.2 The use of fixed-pricing arrangements
commercial agreements
3.3.3 Cost-plus and cost-reimbursable pricing
arrangements
3.3.4 The use of indexation and price adjustment
formulae
3.3.5 The use of incentivised contracts
3.3.6 Payment terms

cips.org/qualifications
Ethical and Responsible
Sourcing 6
CREDITS

(L4M4)
Module purpose

On completion of this module, learners will be able to explain the options

and associated processes available for sourcing with external suppliers.
They will also examine the legal and ethical impact and the implications
of sustainability, encompassing economic, environmental, social and
governance factors on the final sourcing decision.

Module aim(s)

In any organisation, a significant element of procurement and supply

activity is based around decisions to internally conduct activity or to
source from an external supplier. The selection of the optimal external
suppliers is a vital contributor to overall organisational success. This
module enables professionals with roles in procurement and supply to
formulate sourcing strategies and selection criteria to ensure that the
organisation can make the best choice of external suppliers. This module
explains options for sourcing, and examines the key processes that
can be applied to the analysis of potential external suppliers to ensure
sourcing arrangements meet sustainable, environmental, social and
ethical goals.

C Core module
1.5 Hours exam duration

OR Objective response exam 60 Hours module learning time

19
Ethical and Responsible Sourcing (L4M4)
Learning outcomes, assessment criteria and indicative content

1.0 Understand options for sourcing requirements from suppliers

1.1 Identify the sourcing 1.1.1 Definitions of sourcing and outsourcing

(pre-contract stages 1-8
1.1.2 Make or buy decisions and the role of
in CIPS Procurement
intracompany trading
Cycle) process in
relation to procurement 1.1.3 Strategic and tactical sourcing
1.1.4 Costs and benefits of outsourcing
1.1.5 Options and impacts of outsourcing non-core and
core work or services

1.2 Differentiate 1.2.1 Single, dual and multiple sourcing arrangements

between approaches
1.2.2 Types and use of tendering
to the sourcing of
requirements from 1.2.3 Direct negotiations with suppliers
suppliers

1.3 Define the options 1.3.1 Typical criteria used to select external suppliers
and trade-offs when
1.3.2 Impacts of different selection criteria on supplier
sourcing requirements
selection
from external suppliers
1.3.3 Use and interpretation of indicators of profitability,
liquidity, gearing and cash from financial
statements to assess and make conclusions on the
viability of suppliers

1.4 Define the award 1.4.1 Award criteria: price, whole-life asset management
criteria that can be costs, technical merit, added-value solutions,
commonly applied environmental, social, governance and ethical
when sourcing
requirements from
external suppliers

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Ethical and Responsible Sourcing (L4M4)
Learning outcomes, assessment criteria and indicative content

2.0 Understand the key processes that can be applied to the analysis of potential
external suppliers

2.1 Analyse commonly 2.1.1 Compiling spend data relating to suppliers

used sources of
2.1.2 Indices that measure economic activity and
information on market
commodity pricing
data that can impact
on the sourcing of 2.1.3 Secondary data relating to markets and suppliers
requirements from
2.1.4 Limitations of using financial statements that
external suppliers
assess profits, assets & liabilities, and cash as
selection criteria
2.1.5 The role of credit rating agencies

2.2 Identify the key 2.2.1 Advertising requirements

processes used for
2.2.2 Requests for information or quotations
obtaining quotations
and tenders 2.2.3 The operation of tendering
2.2.4 Formalised arrangements for tendering

2.3.1 Assessment of suppliers’ proposals

2.3 Identify the processes
that can be typically
2.3.2 The use of weighted points systems for
used to assess
assessment
quotations or tenders
2.3.3 Assessment of environmental, social, governance
and ethical elements of suppliers’ proposals
2.3.4 Assessing added value
2.3.5 Making recommendations
2.3.6 Procedures for contract award

3.0 Understand compliance issues when sourcing from suppliers

3.1 Compare the key 3.1.1 Impact of international, national and local
legislative, regulatory regulatory frameworks on the sourcing process
and organisational
3.1.2 The importance and impact of environmental,
requirements when
social and governance considerations of bribery,
sourcing in the not
corruption, fraud, human rights and modern
for-profit, private and
slavery in sourcing activities
public sectors
3.1.3 Role of regulation and accountability for
procurement in public, private and third sector
organisations

21
Ethical and Responsible Sourcing (L4M4)
Learning outcomes, assessment criteria and indicative content

3.2 Compare the key 3.2.1 The regulatory challenges of importing including
legislative, regulatory documentation, duties and tariffs, customs control
and organisational requirements and exchange rate fluctuations
requirements
3.2.2 Implications of international sourcing:
when undertaking
documentation, duties and tariffs and Incoterms ®
international sourcing
in the not for-profit, 3.2.3 Payment mechanisms, credit account, bills of
private and public exchange and letters of credit
sectors
3.2.4 Customs control and clearance
3.2.5 Applicable law and jurisdiction

3.3 Identify and apply 3.3.1 Application of the CIPS Code of Conduct
environmental, social
3.3.2 Application of codes of practice supporting
and governance
environmental, social and governance goals
practices that support
responsible sourcing 3.3.3 Contractual provisions, supplier monitoring and
KPIs

3.4 Compare the use 3.4.1 The use of audits to evaluate ethical standards
of audits and other
3.4.2 Encourage dialogue with suppliers to secure
feedback mechanisms
improvements
to evaluate
environmental, social
and governance
standards

3.5 Contrast processes 3.5.1 The triple bottom line – profit, people and planet
and practices that
3.5.2 Standards applicable to environmental, social and
the organisation
governance goals
could adopt to meet
environmental, social 3.5.3 Reporting frameworks to include environmental,
and governance goals social and governance performance
3.5.4 Define organisational value for money to include
environmental and social outcomes

cips.org/qualifications
Commercial Negotiation
(L4M5) 6
CREDITS

Module purpose

On completion of this module learners will be able to identify approaches

to successfully achieving negotiated commercial agreements with
external organisations.

Module aim(s)

The creation of formalised agreements is a critical part of the success

of any organisation. Those involved in procurement and supply activity
will therefore be able to effectively negotiate with stakeholders and
understand the methods associated with preparing and carrying out
commercial negotiations. It enables the learner to analyse approaches
to the negotiation of agreements made with external parties, how to
prepare for them and what techniques are available to ensure successful
outcomes.

C Core module
1.5 Hours exam duration

OR Objective response exam 60 Hours module learning time

23
Commercial Negotiation (L4M5)
Learning outcomes, assessment criteria and indicative content

1.0 Understand key approaches in the negotiation of commercial agreements with

external organisations

1.1 Analyse the application of 1.1.1 Definitions of commercial negotiation

commercial negotiations
1.1.2 Negotiation stages of the CIPS Procurement Cycle
in the work of
procurement and supply 1.1.3 Sources and the management of conflict that can
arise in the work of procurement and supply
1.1.4 Managing the negotiation team and the influence
of stakeholders in negotiations

1.2 Differentiate between 1.2.1 Collaborative, win-win, integrative and principled

the types of approaches approaches to negotiations
that can be pursued in
1.2.2 Distributive win-lose, distributive approaches to
commercial negotiations
negotiation

1.3 Explain how the balance 1.3.1 The importance of power in commercial
of power in commercial negotiations
negotiations can affect
1.3.2 Sources of power of the purchaser and the
outcomes
supplier and the impact on negotiations
1.3.3 Organisational power: comparing the relative
power of purchasers and suppliers
1.3.4 Methods to improve leverage

1.4 Identify the different 1.4.1 The relationship spectrum: the impact of
types of relationships that negotiations on the relationship spectrum
impact on commercial 1.4.2 Building relationships based on reputation and
negotiations trust
1.4.3 Repairing a relationship

cips.org/qualifications
Commercial Negotiation (L4M5)
Learning outcomes, assessment criteria and indicative content

2.0 Know how to prepare for negotiations with external organisations

2.1 Describe the types 2.1.1 Types of costs: direct and indirect, variable and
of costs and prices in fixed
commercial negotiations
2.1.2 Break-even analysis: cost volume profit formulae
2.1.3 Costing methods: absorption, marginal or variable
and activity-based costing
2.1.4 Volumes, margins and mark-ups and their impact
on pricing
2.1.5 Types of prices and their influence in commercial
negotiations

2.2 Contrast the economic 2.2.1 Sources of information on micro and

factors that impact on macroeconomics
commercial negotiations
2.2.2 The impact of microeconomics and market types
on commercial negotiations
2.2.3 Macroeconomics and its influence on commercial
negotiations

2.3 Analyse criteria that can 2.3.1 Setting objectives and defining the variables for a
be used in a commercial commercial negotiation
negotiation
2.3.2 Setting targets and creating a best alternative to a
negotiated agreement (BATNA)
2.3.3 Identifying the Zone of Potential Agreement
2.3.4 The bargaining mix
2.3.5 Positions and interests

2.4 Identify the resources 2.4.1 Choice of location

required for a negotiation
2.4.2 Developing the negotiation team and involving
appropriate colleagues in negotiations
2.4.3 Alternative forums for face-to-face negotiations

25
Commercial Negotiation (L4M5)
Learning outcomes, assessment criteria and indicative content

3.0 Understand how commercial negotiations should be undertaken

3.1 Identify the stages of a 3.1.1 Defining the stages of a negotiation such as:
commercial negotiation preparation, opening, testing, proposing,
bargaining, agreement and closure
3.1.2 Protecting relationships after the negotiation
3.1.3 How behaviours change during the stages of a
negotiation

3.2 Assess negotiation 3.2.1 The use of persuasion methods

approaches that 3.2.2 The use of tactics to influence the other party
can influence the
achievement of desired
outcomes

3.3 Compare the key 3.3.1 Types of questions

communication skills
3.3.2 Effective listening
that help achieve desired
outcomes 3.3.3 Push and pull behaviours
3.3.4 Non-verbal communication
3.3.5 The influence of culture and local practices on
commercial negotiations
3.3.6 The use of emotional intelligence in commercial
negotiation

3.4 Analyse methods and 3.4.1 The importance and role of reflection to improve
assess outcomes of negotiation performance
negotiations to improve
3.4.2 Assessing opportunities for improvement
future practice
and development in commercial negotiation
performance

cips.org/qualifications
Supplier Relationships
(L4M6) 6
CREDITS

Module purpose

On completion of this module, learners will be able to analyse the

dynamics of supplier relationships, examine the processes and
procedures for working with stakeholders and explain the concept of
partnering.

Module aim(s)

In any organisation, a significant element of the procurement and

supply function is based around decisions to source activity from
external suppliers. Once agreements have been made, the relationship
established with the supplier is paramount to success. This module is
designed for those with responsibility for managing relationships with
suppliers and other stakeholders, and those with the responsibility for
establishing and developing formal partnership relationships.

C Core module
1.5 Hours exam duration

OR Objective response exam 60 Hours module learning time

27
Supplier Relationships (L4M6)
Learning outcomes, assessment criteria and indicative content

1.0 Understand the dynamics of relationships in supply chains

1.1 Differentiate between 1.1.1 Internal and external relationships

different types of
commercial relationships 1.1.2 The relationship spectrum across supply chains
in supply chains
1.1.3 The relationship life cycle

1.2 Portfolio analysis 1.2.1 Matrices to identify supply, supplier and

techniques to assess purchaser positioning
relationships in supply
1.2.2 Developing action plans to improve relationships
chains
across supply chains

1.3 Identify the competitive 1.3.1 Competitive forces: sources of competitive rivalry,
forces that impact on bargaining power of buyers and suppliers, threat
relationships in supply of new entrants and potential substitutes
chains
1.3.2 STEEPLED factors that impact on supply chains
(social, technological, economic, environmental,
political, legislative, ethical, demographic)

1.4 Compare the sources of 1.4.1 The link between relationships as a process and
added value that can be the achievement of added-value outcomes
achieved through supply
chain relationships 1.4.2 Sources of added value: pricing and cost
management, improving quality, timescales,
quantities, place, and environmental, social and
governance considerations from procurement
working with external suppliers

cips.org/qualifications
Supplier Relationships (L4M6)
Learning outcomes, assessment criteria and indicative content

2.0 Understand processes and procedures for working successfully with stakeholders

2.1 Analyse the purpose of 2.1.1 Securing value for money from suppliers
organisational procedures
2.1.2 Identification, assessment and selection of
and processes in sourcing
suppliers to secure successful relationships
goods and/or services
2.1.3 Selection and awarding criteria to drive successful
supplier relationships

2.2 Compare team 2.2.1 Positive relationships through positive

management techniques contributions
to ensure positive
2.2.2 Resolving stakeholder differences
stakeholder relationships
2.2.3 Identify sources of conflict and methods to
manage conflict successfully
2.2.4 Working with cross-organisational teams
2.2.5 Stages of team development – forming, storming,
norming, performing, adjourning

2.3 Compare the practical 2.3.1 Accurate cost-modelling

considerations of
2.3.2 Reducing impact of price fluctuations
stakeholder management
2.3.3 Early supplier involvement in product and/or
service development
2.3.4 Knowledge transfer and access to innovation
2.3.5 Common metrics to drive change for both
organisations
2.3.6 Improve risk management and continuity of
supply

2.4 Identify the processes for 2.4.1 Reasons for termination

terminating stakeholder
2.4.2 The process of terminating a relationship
relationships
2.4.3 The importance of timing when managing
supplier issues
2.4.4 Stakeholder impact of terminating a relationship:
amicable and hostile responses
2.4.5 Legal considerations – finances, confidentiality,
IPR, security, employee rights

2.4.6 Succession issues – continuity of supplies

29
Supplier Relationships (L4M6)
Learning outcomes, assessment criteria and indicative content

3.0 Understand the concept of partnering

3.1 Analyse the concept of 3.1.1 Types of partnering

partnering and when to
3.1.2 Compare partnering and ‘traditional’ contracting
use it
agreements
3.1.3 The drivers for partnering
3.1.4 Advantages of partnering for the purchaser and
supplier
3.1.5 Circumstances when partnering is a suitable
approach: high-risk, high-value, technically
complicated supplies; new goods/services; fast-
changing technology and restricted markets

3.2 Appraise the process 3.2.1 Identify activities and/or spend suitable for
of partnership partnering
implementation
3.2.2 ‘Selling’ the partnership philosophy to internal
stakeholders
3.2.3 Defining the performance standards for potential
partners
3.2.4 Establish joint commitment for the partnership
3.2.5 Partnership reviews and audit arrangements

3.3 Identify the reasons for

3.3.1 Communication
partnership failure
3.3.2 Senior management support and trust
3.3.3 Commitment of the parties
3.3.4 Planning
3.3.5 Value
3.3.6 Changes in markets
3.3.7 Cultural differences
3.3.8 Logistics and proximity of the partners

cips.org/qualifications
Whole-Life Asset
Management 6
CREDITS

(L4M7)
Module purpose

On completion of this module, learners will be able to explain methods of

inventory management, inventory analysis and the concept of whole-life
asset management cost, from idea through to disposal.

Module aim(s)

Whole-life asset management takes into account the total cost of a

product or service, from idea through to disposal including purchase,
hire or lease, maintenance, operation, utilities, training and disposal.
It is important for those involved in procurement and supply to take
these elements into consideration when assessing options of buying,
renting or leasing equipment. Although costly, there are a range of
factors organisations assess to determine the approach to inventory,
and the management and control of inventory is an important driver
for organisational success. This module is designed for those with
responsibility for the whole-life management of assets and enables
learners to analyse methods for inventory movement and control and to
consider the concept of whole-life asset cost.

C Core module
1.5 Hours exam duration

OR Objective response exam 60 Hours module learning time

31
Whole-Life Asset Management (L4M7)
Learning outcomes, assessment criteria and indicative content

1.0 Understand methods for the storage and movement of inventory

1.1 Identify the principles, 1.1.1 Location of stores and warehouses

purpose and impact of
1.1.2 Stores and warehouse design
stores and warehouse
design 1.1.3 Factors influencing stores and warehouse layout
1.1.4 Flow, space utilisation and flexibility

1.2 Explain the use of product 1.2.1 Systems for product coding
coding in inventory
1.2.2 Barcoding and quick response (QR) coding
operations
1.2.3 Order tracking technologies
1.2.4 The use of radio-frequency identification (RFID)
technologies

1.3 Contrast the impact 1.3.1 Materials handling equipment (MHE)

of the use of different
1.3.2 Pallets and palletisation
warehousing equipment
approaches 1.3.3 Containers and containerisation
1.3.4 The use of automation in warehousing

2.0 Understand the key elements of effective inventory control

2.1 Differentiate between the 2.1.1 Raw materials, opening stock, work in progress
different classifications of (WIP), safety stock and finished goods
inventory
2.1.2 Obsolescent and redundant stock
2.1.3 Direct and indirect supplies
2.1.4 ABC classifications of stock that may apply

2.2 Identify the direct and 2.2.1 Acquisition costs

indirect costs of holding
2.2.2 Holding costs
inventory
2.2.3 Cost of stockouts
2.2.4 Discuss options to reduce costs while mitigating
any negative impact on service levels

cips.org/qualifications
Whole-Life Asset Management (L4M7)
Learning outcomes, assessment criteria and indicative content

2.3 Identify techniques 2.3.1 Subjective and objective forecasting

associated with inventory
2.3.2 Reorder quantities and levels
control
2.3.3 MRP II (manufacturing resource planning) and
dependent demand and independent demand
items of stock
2.3.4 ERP (enterprise resource planning)
2.3.5 JIT (just-in-time)
2.3.6 Inventory optimisation
2.3.7 Inventory performance measures – lead times,
service levels, rate of stock turn, stock-outs in a
given period, stock cover

3.0 Understand the concept of whole-life costing

3.1 Analyse the contributing 3.1.1 Purchase price

factors when establishing
3.1.2 Hire or lease
whole-life costs
3.1.3 Acquisition costs
3.1.4 Usage costs: maintenance, operation costs, utility
costs and training costs
3.1.5 Disposal and end-of-life options and associated
costs

3.2 Compare the factors to 3.2.1 Purpose of whole-life asset management

consider when building a
3.2.2 Costs and risks of whole-life asset management
whole-life cost model
3.2.3 Stakeholder factors relating to whole-life asset
management

3.3 Identify the contributing 3.3.1 Triple bottom line – people, planet, profit
factors supporting whole-
3.3.2 Environmental factors
life asset management
3.3.3 Waste management
3.3.4 Packing and packaging
3.3.5 Decommissioning
3.3.6 Removal or disposal including closed-loop

33
Procurement and Supply
in Practice 12
CREDITS

(L4M8)
Module purpose

On completion of this module, learners will be able to demonstrate the

practical application of the procurement cycle in an integrated manner,
within a workplace context. This module is designed as a summary
module, drawing on the knowledge and skills developed in M1 to M7 and
applying these in a work context.

Module aim(s)

Procurement is the business function that ensures identification,

sourcing, access and management of external resources that an
organisation needs or may need to successfully fulfil its strategic
objectives. It exists to explore supply market opportunities and to
implement resourcing strategies that deliver the best possible supply
outcomes to the organisation, its stakeholders and customers. In today’s
volatile global trading environments, it is not enough for procurement
and supply professionals to simply know the theory behind their
profession; they must also be in a position to confidently and effectively
apply that knowledge to the benefit of the whole organisation, its
stakeholders and customers. This module is designed to test the practical
application of procurement and supply concepts and ideas within the
practical environments in which professionals are expected to perform.

C Core module
3 Hours exam duration

CR Constructed response exam 120 Hours module learning time

cips.org/qualifications
Procurement and Supply in Practice (L4M8)
Learning outcomes, assessment criteria and indicative content

1.0 Demonstrate the application of the procurement cycle

1.1 Apply the stages of the 1.1.1 The holistic application of the CIPS Procurement
procurement cycle to the Cycle
practical procurement
1.1.2 The benefits and limitations of structured
and supply contexts
procurement processes
1.1.3 The application of procurement processes in a
range of workplace contexts: public, private and
third sectors

2.0 Demonstrate the application of the stages of the procurement process

2.1 Apply the pre-contract 2.1.1 Apply the pre-contract stages (stages 1-8) of the
stages (stages 1-8) of the CIPS Procurement Cycle to practical procurement
CIPS Procurement Cycle to and supply contexts: public sector, private sector
the practical procurement and third sector
and supply environment

2.2.1 Apply the post-contract stages (stages 9-13) of the

2.2 Apply the post-contract
CIPS Procurement Cycle to practical procurement
stages (stages 9-13) of the
and supply contexts: public sector, private sector
CIPS Procurement Cycle to
and third sector
the practical procurement
and supply environment

2.3 Calculation and 2.3.1 Calculate performance indicators of profitability,

assessment of liquidity, gearing and cash from financial
performance indicators statements to assess and make conclusions on
the viability of suppliers
2.3.2 Assess the benefits and limitations of calculating
performance indicators from financial statements
2.3.3 Calculate and comment on fixed and variable
costs, mark-up, margin and breakeven
2.3.4 Assess the benefits and limitations of breakeven
analysis

35
Procurement and Supply in Practice (L4M8)
Learning outcomes, assessment criteria and indicative content

3.0 Demonstrate the application of whole life-asset management

3.1 Apply whole-life asset 3.1.1 Application of whole-life asset principles in a

management principles range of sectors: public, private and third sector
in a range of sectors and
3.1.2 Application of whole-life asset principles in a
industries
range of industries: primary, secondary and
tertiary industries
3.1.3 Application of whole-life asset principles in global
sourcing, considering the risks and benefits
associated with extended supply chain
3.1.4 The application of whole-life asset management
principles in the management of costs and risks
3.1.5 The application of whole-life asset management
principles in the management of stakeholders
3.1.6 The application of whole-life asset management
principles to product end-of-life and
decommissioning activities

4.0 Demonstrate the application of environmental, social and governance principles in

a range of sectors and industries

4.1 Apply environmental, 4.1.1 Application of environmental, social and

social and governance governance principles in a range of sectors:
principles public, private and third sector

4.1.2 Application of environmental, social and

governance principles in a range of industries:
primary, secondary and tertiary industries
4.1.3 Use and application of supplier monitoring and
KPIs to track and improve performance
4.1.4 To be able to apply practical steps to achieve
environmental, social and governance goals in a
range of contexts: public, private and third sectors

cips.org/qualifications
CIPS LEVEL

4
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whole or in part, without the prior written permission of CIPS.
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