L2M4 Tutor Slides

CIPS Level 2 Certificate in Procurement and Supply Operations
Teaching Resources
Module title : Systems Technology [L2M4]
Leading global excellence in procurement and supply

Systems Technology [L2M4]
Learning Outcome (LO)1: Understand the

use of systems technology and databases and
how they contribute to procurement and
supply
All rights reserved. These slides are provided exclusively to CIPS Approved Study Centres for the sole purpose of teaching CIPS Professional Qualifications, they are not to be
used for any other purpose and may not be altered, copied, sold or lent to other parties. Copyright ©2018 CIPS
Slide 1
Learning Outcome 1: Understand the use of systems
technology and databases and how they contribute to
procurement and supply
1.1 Explain how to use systems technology and databases to contribute to effective procurement and
supply
• Data input into systems to perform key tasks for purchase ordering and other transactions
• Capturing data on expenditures and updating systems
• Providing data to smooth demand and the importance of demand management
• Data use in the forecasting process, and achieving functional targets
• How to compare forecasts with actual outcomes to control expenditures
• How to measure achieved savings of goods and services to recognise efficiencies
• How to measure internal and external lead times of supplies of goods and services

1.2 Recognise how the use of the Internet, intranets and extranets leads to effective procurement and
supply
• The use of Internet search engines to locate details about suppliers and customers
• The types of information presented by suppliers and customers on their websites
• The e-market place
• The use of social media to obtain feedback on supplier performance
1.3 Explain the role of e-sourcing and e-tendering systems in procurement and supply
• Defining e-sourcing, e- invoicing e-requisitioning, e-catalogues and e-ordering
• Pre-qualify suppliers
• Receive and evaluate quotations and tenders
Slide 21
All rights reserved. These slides are provided exclusively to CIPS Approved Study Centres for the sole purpose of teaching CIPS Professional
Qualifications, they are not to be used for any other purpose and may not be altered, copied, sold or lent to other parties. Copyright ©2018 CIPS
(1.1) The use of data in procurement
Stage of Examples of data input
procurement
Analysing Budgets and expenditure
Sourcing Supplier details
Contracting Supplier and contract details, e.g., value and

duration of contract, entered in contract register
Requisitioning Details of the need
Purchasing Purchase order, date raised, value of order,

details of supplier, etc.
Paying Invoice details, value of invoice, date received,
authorised and paid.
Slide 31
(1.1) Demand management
Figure 1.5 Production before demand management Figure 1.6 Production after demand management
Slide 41
(1.1) Targets and variance
Table 1.7 Cable expenditure, years 1–3
Slide 51
(1.2) Internet, extranet, intranet
Figure 1.18 The Internet, extranet and intranet
Slide 61
(1.2) Supplier websites and social media
Figure 1.20 Supplier website information
Slide 71
(1.3) e-sourcing terms
• E-sourcing
• E-requisition
• E-catalogues
• E-ordering
• E-invoicing
Slide 81
(1.3) Stages in the e-tendering process
Figure 1.27 Pre-qualifying suppliers
Figure 1.28 Stages in e-tendering
Slide 91
Recommended reading
Level 2 CIPS Systems Technology Study Guide
Procurement and Supply Chain Management

Lysons/Farrington
Slide 10
Learning exercise: Lewei’s data analysis
Work in pairs to discuss the scenario and answer the following
questions:
1. What type of e-system has Lewei found this data on?
2. What documents will this data have been captured from?
3. Draw a graph to show the spend on lightbulbs over the past 6
months.
4. Calculate the total spend on lightbulbs in the past 6 months.
5. Lewei decides to investigate the price that other suppliers offer
for regular orders, as well as the bulk discounts they offer.
Suggest at least two methods that he could use to find this out.
Slide
Slide 9111
Systems Technology [L2M4]
Learning Outcome (LO)2: Know types of

systems for supplier selection, ordering and
payment
All rights reserved. These slides are provided exclusively to CIPS Approved Study Centres for the sole purpose of teaching CIPS Professional Qualifications, they are not to be Slide 12
used for any other purpose and may not be altered, copied, sold or lent to other parties. Copyright ©2018 CIPS
Learning Outcome 2: Know types of systems for supplier
selection, ordering and payment
2.1 Describe the use of electronic sourcing systems for supplier selection and
profiling
• Attracting quotations or tenders through an e-tendering or e-sourcing system
• The publication of e-notices
• The use of e-auctions

2.2 Identify systems used in procurement and supply
• Systems for purchase ordering
• Capturing data on expenditures
• The use of portal sites to locate suppliers or customers
• Examples of supplier database systems
2.3 Identify the use of P2P (purchase to pay) systems for ordering from
suppliers and payment to suppliers
• The P2P process from the creation of requisitions, to raising requests for quotations or
tenders, receipt of quotations or tenders, delivery documentation, invoicing and payment
• Examples of P2P systems
Slide 131
(2.1) e-tendering and e-sourcing
Figure 2.1 The e-sourcing process
Figure 2.8 Example of an RFQ response Figure 2.9 Example of an e-sourcing

RFQ report Slide 141
(2.1) e-notices
Figure 2.4 Example of a future contract

opportunity for cables
Figure 2.2 E-notices from an e-sourcing system

Slide 151
(2.1) e-auctions
Figure 2.10 The result of an e-auction process

Slide 161
(2.2) Purchase orders and expenditure
Figure 2.18 Capturing data on expenditure

Slide 171
(2.2) Portal sites and supplier databases
Figure 1.23 Ways of using a supplier extranet

Slide 181
(2.3) The use of P2P systems
Figure 2.17 Systems technology in procurement and supply

Slide 191
(2.3) More P2P systems
Figure 2.23 The stages of e-sourcing and e-procurement systems
Slide 201
Recommended reading

Lysons/Farrington
Slide 21
Learning exercise: Sakura’s systems
1. Explain the steps that Sakura should go through in order to

obtain responses to her ITT, and include details of the systems
she can use at each stage.
2. What system should Sakura look at in order to find out

information about how much money has been spent with a
supplier to date?
3. What system should Sakura look at in order to find appropriate

suppliers to invite to respond to the ITT?
4. If Sakura was just looking for the cheapest price for a product or
service, what system could she use?
Slide 22
21
Level 2 Systems Technology
Learning Outcome (LO)3: Know why

quality management is important in
procurement and supply
Slide 23
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Learning Outcome 3: Know why quality management
is important in procurement and supply
3.1 Identify components of quality management in procurement and supply
• Definitions of quality, quality control, quality assurance and total quality management
• Quality as a philosophy
• Getting things right first time

3.2 Identify the costs of quality
• Prevention and appraisal costs
• The internal and external costs of quality
• Organisational reputation

3.3 Identify techniques associated with quality assurance and quality management
• How to assess the quality of supplies of goods and services to ensure that quality standards
are achieved and maintained
• From quality inspection to quality assurance
• Quality circles
• The use of control charts
• Kaizen, continuous improvement, lean philosophy and associated techniques.
Slide 24
21
(3.1) The quality management cycle (1)
• PLAN: Quality planning
• DO: Quality assurance
• CHECK: Quality control
• ACT: Quality improvement
Figure 3.1 Components of the quality management cycle

Slide 25
21
(3.1) The quality management cycle (2)
• PLAN: Quality planning
• DO: Quality assurance
• CHECK: Quality control
• ACT: Quality improvement
Figure 3.1 Components of the quality management cycle

Slide 26
21
(3.2) Costs of quality
Figure 3.11 The cost of quality

Slide 27
21
(3.2) Balancing the costs of quality
Figure 3.14 The cost quality graph

Slide 28
21
(3.3) Contract scorecard
Figure 3.21 A contract scorecard
Slide 29
21
(3.3) Quality measures
Figure 3.9 Quality controls in a production process
Slide 30
21
(3.3) Kaizen, lean, six sigma
Table 3.14 Comparison of quality improvement models

Slide 31
21
Recommended reading

Lysons/Farrington
Slide 32
Learning exercise: Cereal Inc’s quality
issues
1. What roles or departments within Cereal Inc should Mia talk to, in
order to find out more? What sort of questions could she ask?
2. List some of the failure costs that Cereal Inc will incur as a result of this
issue.
3. Draw a graph to identify how much Cereal Inc should spend on quality,
if the cost of prevention is $9,000 for every 10% reduction in defects
and the cost of failure is $15,000 for every 10% of defects.
4. What prevention measures could they implement to prevent these
issues from happening again?
5. Which quality management approach would you suggest the
implement, and why?
Slide 33
21

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CIPS Level 2 Certificate in Procurement and Supply Operations

Leading global excellence in procurement and supply

Learning Outcome (LO)1: Understand the

Analysing Budgets and expenditure

Sourcing Supplier details

Contracting Supplier and contract details, e.g., value and

Purchasing Purchase order, date raised, value of order,

Table 1.7 Cable expenditure, years 1–3

Figure 1.18 The Internet, extranet and intranet

Figure 1.20 Supplier website information

Figure 1.27 Pre-qualifying suppliers

Figure 1.28 Stages in e-tendering

Level 2 CIPS Systems Technology Study Guide

Procurement and Supply Chain Management

Learning Outcome (LO)2: Know types of

Figure 2.1 The e-sourcing process

Figure 2.8 Example of an RFQ response Figure 2.9 Example of an e-sourcing

Figure 2.4 Example of a future contract

Figure 2.2 E-notices from an e-sourcing system

Figure 2.10 The result of an e-auction process

Figure 2.18 Capturing data on expenditure

Figure 1.23 Ways of using a supplier extranet

Figure 2.17 Systems technology in procurement and supply

Figure 2.23 The stages of e-sourcing and e-procurement systems

Level 2 CIPS Systems Technology Study Guide

Procurement and Supply Chain Management

1. Explain the steps that Sakura should go through in order to

2. What system should Sakura look at in order to find out

3. What system should Sakura look at in order to find appropriate

Learning Outcome (LO)3: Know why

• PLAN: Quality planning

• DO: Quality assurance

• CHECK: Quality control

• ACT: Quality improvement

Figure 3.1 Components of the quality management cycle

• PLAN: Quality planning

• DO: Quality assurance

• CHECK: Quality control

• ACT: Quality improvement

Figure 3.1 Components of the quality management cycle

Figure 3.11 The cost of quality

Figure 3.14 The cost quality graph

Figure 3.21 A contract scorecard

Figure 3.9 Quality controls in a production process

Table 3.14 Comparison of quality improvement models

Level 2 CIPS Systems Technology Study Guide

Procurement and Supply Chain Management

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