L4M6 Chapter 2

Question 1

CW Ltd is looking for a new supplier for its facilities management contract. The procurement department opens a tendering process and send the ITTs to several suppliers. Three suppliers submit their bids with detailed quotations and their quality accreditations. The procurement department realises that there are slight differences in the prices that these suppliers offer. Which of the following should be considered by CW procurement team to ensure that the best supplier is selected?

Answer 1

Value of Money.
Achieving value for money is one of the objectives of procurement function. It is not about buying the cheapest but is the balance between the lifetime cost of the purchase and the quality or performance of that product or service. Competition is a key component in demonstrating that a purchase represents value for money.

In the scenario, the bids from three suppliers are slightly different. In order to choose the best supplier, the procurement team must consider other factors such as whole-life cost, service quality, etc. The balance of these factors is value for money.

Question 2

Which of the following can be identified as secondary stakeholders?

Answer 2

Pressure Groups.
A stakeholder refers to an individual, a group of persons, an economic entity or an institution that can affect a business organization by its actions or can be affected by the actions of that business organization. Every stakeholder is important for a business entity but some stakeholders exert more influence and are therefore considered more important than others. On the basis of importance, stakeholders of a business are usually categorized as primary stakeholders and secondary stakeholders.

Primary stakeholders:

Stakeholders that hold a direct interest in a business or organization and its dealings are known as primary stakeholders. These stakeholders usually invest their financial capital directly into the business. Examples of primary stakeholders include shareholders, employees, customers, suppliers, vendors and business partners.

Secondary stakeholders:

Stakeholders that do not hold direct interests in a business but can have a reasonable influence over a business’s dealings are known as secondary stakeholders. An organization does not directly depend upon these stakeholders for survival of its immediate interests. Business competitors, trade unions, media groups, pressure groups and state or local government organizations are some examples of secondary stakeholders.

Question 3

BeautyWare (BW) is a manufacturer of high quality, own-branded hair care and beauty products. BW’s purchasing department has relationships with more than 1,000 suppliers, who supply raw materials, finished products and services like advertising. However, the company is increasingly concerned about declining margins. Conflicts often arise between finance and purchasing departments since the finance team heavily focuses on savings, budgets and unit cost reduction; which drives procurement into behaviour that does not align with user departments and stakeholders around the organisation. Which of the following will introduce purchasing department suitable conflict management styles to cope with the conflicts with finance department?

Answer 3

The Thomas-Kilmann model introduces different conflict management styles to cope with identified or emerging conflict. The model looks at an individual’s behaviours along the the following two dimensions:

• Vertical axis (Concern for self): This is the extent to which a person will try to satisfy their own needs first. This may also be referred to as assertiveness
• Horizontal axis (Concern for others): This is the extent to which a person tries to satisfy other’s concerns. This may also be referred to as co-Porter’s Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry’s weaknesses and strengths. Five Forces analysis is frequently used to identify an industry’s structure to determine corporate strategy

In inventory management, ABC analysis is an inventory categorization method used as a crude prioritization mechanism to concentrate efforts and resources on the items that matter the most for the company. This method is grounded in the empirical observation that a small fraction of the items or SKUs typically account for a large portion of the business.

The Kraljic matrix is an influential strategic tool “to guide managers so that they can recognise the weakness of their organisation and formulate strategies for guarding against supplies disruption” (Lysons and Farrington, 2006: 63). The matrix developed by Peter Kraljic can be used to implement differentiated purchasing strategies (Gelderman and van Weele, 2002)..

Question 4

Which of the following contribute towards the success of an ESI project?

Answer 4

Non-discloser agreement
Mutual collaboration
Effective cross-functional team

Early supplier involvement (ESI) is a process that involves a company’s preferred supplier in the development of new products and services. In order to ensure the success of ESI, buyer needs to:

1) There has to be a formal plan and structure in place for ESI implementation. Programs that lack specificity and a formal approach are usually inadequate and ineffective. It is also advisable to have a responsible party or full time ESI team leader in charge of the overall ESI program.
2) Only suppliers with long-term relationships and partnerships with the sourcing should be expected to participate in the ESI programs. This necessitates that the suppliers be certified and prepared to commit themselves on a long-range basis.
3) The ESI process requires an effective cross-functional team. This team is essential in building a consensus and facilitating dialogue and communication among various stakeholders and departments. The team members should be drawn from design, procurement, suppliers, and manufacturing groups. This appears to be a prerequisite for implementing an effective ESI program.
4) Effective ESI programs require the support and involvement of top management. Without this support and involvement, major decisions regarding product design and strategic material development will not be happened.
5) Most of the tasks presented in the building blocks of an ESI conceptual framework should be considered as interdependent with one another. Whenever appropriate, the tasks must be considered and performed simultaneously. For this to occur, the culture in the company must be conducive to effective interdepartmental communication and cooperation. Only then can an effective ESI program be implemented.
6) Before an ESI begins, to mitigate any risk the buyer should ensure that the relationship is covered by a contract in order to set out the ground rules. This should start with a non-disclosure agreement (NDA) between the supplier and buyer to protect any confidential and commercially sensitive information and stop it getting to any of the buyer’s competitors.

Question 5

Katton Ltd is installing a new computer system. Most of the existing computers are over five years old and the IT buyer has been asked to buy new computers for all staff. This is one of the largest purchases of Katton this year. The detailed specification is agreed among internal stakeholders and procurement department has already identified at least three potential suppliers. Should Katton Ltd run a competitive bidding process?

Answer 5

Yes, because the competition among suppliers will help Katton achieve value for money”

To answer this question, students should know when to use competitive bidding. Dobler and Burt (1996) suggested some conditions in which competitive bidding should be employed:
When to use competitive bidding - when the item or service is of sufficient value, when there is clear specification, when competition exists between a number of good quality suppliers, when there is enough time for the process to be completed properly.

When not to use competitive bidding - when it’s not possible to obtain firm prices, when the specification is likely to change, when price is not the main driver, when set-up cost and time is prohibitive.

Question 6

Company A is seeking to improve its product quality by applying new technology called HPP. This technology is registered by Company B as patent. In order to use this technology, Company A will need to obtain which of the following?

Answer 6

A License.
To use a patented technology, Company A needs to obtain the license from Company B. By a technology licensing agreement Company B (the licensor) authorises Company A (licensee) to use the technology under certain agreed terms and conditions.

A patent term is a regulatory clause which states about the fees, conditions and duration of patent.

Exclusion clauses are clauses that exempt a party from legal liabilities if some specific circumstances arise

The Copyright Clause describes an enumerated power listed in the United States Constitution.

Question 7

Buyer should use cost modelling for which segment of items?

Answer 7

Strategic
Cost modelling will generally be undertaken based on spend located in the strategic quadrant of the Kraljic model as it is these suppliers that would be targeted for developing a partnership relationship. It should be noted that not all procurement activities require cost modelling, especially those that can achieve value for money via competitive tendering and strong procurement processes.

Question 8

The Community Housing Agency has a number of housing projects under its management. The members of the project team had been asked to assemble in the conference room to prepare for the next important project: the Bradbury Housing. In the meeting, the housing manager speaks out his opinion: “I am a key sponsor of this project and I had to find this money from my own budget. I would like to take part in selecting the main building contractor from very first stage.” Since the conceptual design phase of the project, most of housing manager’s opinions and ideas have been strongly endorsed by project manager and project engineers. Which of the following is the right approach for managing stakeholder like housing manager according to Mendelow’s theory?

Answer 8

Engage and make the greatest efforts with this stakeholder.

Mendelow developed a very helpful tool which can be used to map stakeholders and provide an insight into how these stakeholders should be managed.

The horizontal axis looks at the stakeholders level of interest. Interest is the likelihood that stakeholders will use their power, basically the strength of their motivation to do so, so based on the strength of their interest in a given issue or decision.

The vertical axis looks at the power of a stakeholder has to influence. Power is the ability to influence, the ability of individuals or groups to persuade, induce or coerce others into following certain course of action. In case of your stakeholders this means their ability to influence the organization or, looking at it from a purchasing and supplies point of view, their ability to influence procurement activities.

In the scenario, the housing manager is the key sponsor and is very interested in the project. He also has high level of influence to project manager and project engineers because his ideas are strongly endorsed by them. Therefore, he falls into key player quadrant in Mendelow’s theory. To this group of stakeholders, procurement should manage them closely.

Question 9

According to Thomas-Kilmann model, competing style is the best conflict management style in every situation. Is this statement true?

Answer 9

The Thomas-Kilmann model introduces different conflict management styles to cope with identified or emerging conflict. The model looks at an individual’s behaviours along the the following two dimensions:

• Vertical axis (Concern for self): This is the extent to which a person will try to satisfy their own needs first. This may also be referred to as assertiveness
• Horizontal axis (Concern for others): This is the extent to which a person tries to satisfy other’s concerns. This may also be referred to as co-operativeness.
  There is no single best style for coping with conflict, the method used will depend on the situation. For example, competing style will be best used:
• When quick, decisive action is vital—for example, in an emergency
• On important issues when unpopular courses of action need implementing—for example, cost cutting, enforcing unpopular rules, discipline
• On issues vital to company welfare when you know you’re right
• When you need to protect yourself from people who take advantage of noncompetitive behavior.

Question 10

Which of the following can be used by a buying organisation to make a short-list of bidders who meet the buyer’s requirements?

Answer 10

Pre-qualification questionnaire
Request for information
Both requests for information (RFIs) and pre-qualification questionnaires (PQQs) can be used for the selection stage of a tender process to ensure that short-listed bidders meet the requirements of the buying organisation.

The RFI is a solicitation document used to obtain general information about products, services, or suppliers. It is an information request, not binding on either the supplier or the purchaser, and is often used prior to specific requisitions for items.

A pre-qualification questionnaire (PQQ, sometimes referred to as a supplier assessment questionnaire) sets out a series of questions for potential tenderers to answer regarding their level of experience, capacity and financial standing. The answers to these questions enable the client to produce a short list of suppliers that are likely to be most appropriate for their project. Short-listed suppliers may then be invited to tender for the contract.

Question 11

Procurement procedures and processes can support an organisation to achieve value for money by…?

Answer 11

Fostering competition among potential suppliers.
Procurement will have a number of procedures and processes in place in order to achieve value for money. These processes should foster competition among suppliers in order to get the best price. The procurement process should not be manipulated to give preference to any particular firm(s) or individual(s).

Question 12

Which Act ensures the continuity of employment that procurement should pay attention to when making a business case for in-sourcing?

Answer 12

TUPE.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 known colloquially as TUPE are the United Kingdom’s implementation of the European Union Transfer of Undertakings Directive. It is an important part of UK labour law, protecting employees whose business is being transferred to another business. One of the main elements of TUPE is deciding when it applies. ACAS (The Advisory, Conciliasion and Arbitration Service) states that TUPE applies in the following situations: when the identities of the employer changes.

• Outsourcing
• Re-tendering
• In-sourcing

It will be more complex and time-consuming if there is a TUPE transfer of staff involves, so when making a business case for in-sourcing, procurement should consider whether or not TUPE applicable in this situation.

The General Data Protection Regulation 2016/679 (GDPR) is a regulation in EU law on data protection and privacy in the European Union and the European Economic Area. It also addresses the transfer of personal data outside the EU and EEA areas.

Non-disclosure agreement (NDA) means that if a party to the agreement disclose confidential information there will be a penalty for doing so. The penalty is usually financial.

Service Level Agreement (SLA) is an agreement between the provider of a service and its users which quantifies the minimum quality of service which meets business needs.

Question 13

Before engaging in an important negotiation with the key supplier, BAH Ltd decides to develop cost models. The company knows that producing accurate cost model is very hard. What should BAH Ltd do to increase the accuracy of cost modelling?

Answer 13

Form cross-organisational team
Use multiple data points on supplier’s costs

The five key principles to be considered to create more accurate and robust cost models for purchased goods and services:

➢ Capture cost drivers, not just cost elements.

➢ Build commodity-specific models to highlight key drivers.

➢ Consider the impact of total cost of ownership.

➢ Start simple and add complexity only as needed

➢ Triangulate around data to improve accuracy and confidence.

Develop a cross-organisational team of internal stakeholders to take the cost modelling project forward.
Cost models can also be developed in collaboration with a supplier as part of partnership relationship.

Question 14

Which of the following is a key to build high performance teams?

Answer 14

Create a shared sense of purpose.

Building a high-performing team doesn’t happen overnight. It takes commitment and an investment in continuous growth and development. Use the following tips to get started:

Create a shared sense of purpose.

In order for employees to feel connected to a team, they need a unified purpose. This is where clear goals and team alignment come into play.

Managers of high-performing teams are always evaluating priorities and team goals to ensure they are effective and aligned. Keep organizational goals top-of-mind by regularly communicating and connecting those goals to the team’s work.

Take advantage of one-on-ones to check in with team members on their progress, identify key priorities, and ensure their work aligns with the overall team goals. This helps create a shared sense of purpose and ensures the team is pulling together in the same direction to drive performance.

Streamline communication.

High-performing teams have to be nimble and focused—so clear, streamlined communication is essential. Keep everyone on the same page by establishing clear processes and expectations for communication.

For example, teams might use Slack channels for water cooler chats and team updates but rely on project management tools like Asana to house project data, define responsibilities, and track progress and assignments.

Having set communication processes helps prevent conflict and ensures key information is shared with the right people, assignments and responsibilities are clear, and nothing falls through the cracks.

Invest in employee development.

If you want consistent outstanding results, build a culture of continual learning and improvement. High-performing teams are curious. They ask questions, explore possibilities, and adapt based on what they learn. When teams are continually building on their knowledge and learning from past mistakes, they are more effective, efficient, and innovative.

Drive team performance by investing in your employees’ growth and development. Identify relevant development opportunities that focus on team needs and priorities, as well as individual goals. Employee development opportunities help employees feel motivated, empowered, and better equipped to do their job.

Building a high-performing team is a marathon, not a sprint. But when you bring together the right mix of skills and experience and nurture these fundamental characteristics of a high-performing team, the payoff will be worth it.

Question 15

In order to derive additional value from current relationship, Company A and Company B intend to establish some relationship-based KPIs instead of using traditional KPIs only. Relationship-based key performance indicators are typified by which of the following?

Answer 15

More qualitative measures
Affecting the performance outcomes

As well as looking at common metrics relating to traditional KPIs such as cost and delivery, a buyer and supplier can also measure the performance of their relationships with the aim of creating positive changes. A relationship-based KPI is different from traditional KPI. Relationship-based KPIs are qualitative measures whereas traditional KPIs tend to be quantitative measures. These KPIs are not direct measures of outcome, but they all affect the outcome on one way or another.
Due to the investment of time and resources required, this type of approach would only be used with a key and strategic supplier. In order for this approach to be successful both parties would need to have a joint goal that they want to achieve together, such as increasing profitability or reducing waste in the supply chain.

Question 16

Mendelow’s theory requires procurement professionals to understand which aspects of stakeholders?

Answer 16

The ability to influence
The level of interest

Identifying all relevant stakeholders involved in procurement and supply process is very important. Stakeholder Mapping is a process that shows who the stakeholders are for the organisation.

Mendelow’s stakeholder matrix is a tool that is used to categorise stakeholders. This will consider two factors:

• The level of interest that a stakeholder has in a project
• The power that a stakeholder may influence in a project
  Power

Power is the ability to influence, the ability of individuals or groups to persuade, induce or coerce others into following certain course of action. In case of your stakeholders this means their ability to influence the organization or, looking at it from a purchasing and supplies point of view, their ability to influence procurement activities.

Interest

Interest is the likelihood that stakeholders will use their power, basically the strength of their motivation to do so, so based on the strength of their interest in a given issue or decision.

Mendelow’s matrix consists of 4 boxes representing stakeholders with:

High Interest and High Power: these will be considered as key players so that the business will need to actively engage this group.

High Interest and Low Power: this group have an interest in a project, however they are unlikely to have the power to influence on the project. This group should be kept informed.

Low Interest and High Power: this group of stakeholders have the potential to move into the ‘High Interest and High Power’ group so it is essential that they are kept satisfied. By keeping them satisfied they are less likely to gain interest and exercise their power to influence

Low Interest and Low Power: these stakeholders are the least important ones but they are still important to the organisations. Without engaging with them, the organisation’s operations may be disrupted. This group may be small suppliers or customers which requires little effort. However, the organisation should update them about the changes to keep them engaged and they also feel valued.

Mendelow’s matrix has the following advantages and disadvantages:
Advantages:

• Helps discovering where the real power over a project is located and therefore making better project decisions.
• Helps finding the right communication means with stakeholders.

Disadvantages:

• Can be subjective.
• To benefit must be performed on regular basis.
• Plotting a stakeholder on this matrix does not show his attitude towards our initiative. We do not know whether a stakeholder is for or against it. Sometimes symbols like (+, -, or 0) are used to indicate that a stakeholder shows positive, negative or neutral attitude.

Question 17

A successful business requires high level of collaboration among the functional departments. Procurement can contribute to the success of other department, for example, design and development. What is the contribution of procurement to design department?

Answer 17

Cataloguing supplier’s technical and design expertise.

Birou and Fawcett (1994) identified five facilitator roles that buyers can have in the product development process; 1. Cataloguing suppliers technical and design expertise, 2. Foster a committed environment making suppliers more creative and risk-taking, 3. Developing stronger relationships making suppliers invest in product development capabilities, 4. Contribute to early supplier involvement and 5. Facilitating better and more consistent communication.

Question 18

Company C is preparing key performance indicators to monitor the performance of relationship with a strategic supplier. Among these KPIs, an indicator measures how the buyer perceives the effort of supplier regarding contract performance. Which of the following is the factor that is highlighted by this KPI?

Answer 18

Commitment.

There are many factors identified by various authors as being important in a buyer‐supplier relationship and thus are important to measure. The six factors described below are the once affecting the relationship to the greatest extent.

1. Trust: Trust can be defined as “one party’s belief that the other party in the relationship will not act opportunistically and not exploit its vulnerabilities even when such exploitation would not be detected”. It is important to notice that trust is only a belief from one side of the relationship and not clear evidence that the other party will not act opportunistically. This is a reason why most companies work with contractual agreements and not only base their decisions on trust.
2. Power: Power in relationships between companies arises due to dependences. These dependences are formed when one of the companies ́ goals become dependent on the actions of the other company.
3. Commitment: Commitment concerns the willingness of the trading partner to put effort in to the buyer‐supplier relationship
4. Transparency: Transparency is defined by as the amount of information exchange between supply chain partners.
5. Cooperation: Cooperation is defined as either similar or complementary actions that are taken by both parties within an interdependent buyer-­‐supplier relationship in order to reach singular or mutual objectives.
6. Communication: Communication can be seen as the glue that holds the supply chain together. Communication allows a supplier to improve its performance in accordance to the buyer needs and thus and it is a key factor in the integration with the supply chain.

In the scenario, Company C intends to measure the effort of a supplier. Effort is an important part of Commitment factor.

Question 19

The procurement team of XYZ Ltd has long been established. The team is well-known for its dedication and efficiency. Team members understand each other well and collective decisions are made swiftly. Recently, the procurement manager has recruited 2 new team members. They have little experience regarding to procurement but they are keen to learn from more senior members. This team is at which stage of its development?

Answer 19

Forming

Teams go through stages of development. The most commonly used framework for a team’s stages of development was developed in the mid-1960s by Bruce W. Tuckman his descriptions of Forming, Storming, Norming and Performing provide a useful framework for looking at your own team.

Question 20

Which of the following is most likely to be restraining force on change?

Answer 20

Long established and strong culture - may influence the internal stakeholders to resist change. It can be a restraining force.

This question targets at Force Field analysis. The force field analysis was developed by Kurt Lewin. It evaluates the net impact of all forces that influence change. These forces can be divided into two groups: driving forces and restraining forces. Driving forces are all forces that promote change. These change drivers promote and encourage the change process. Some examples of driving forces are executive mandate, stakeholder demands, and increased efficiency.

Restraining forces are forces that make change more difficult. These forces counteract driving forces and lead to the avoidance or resistance of change. Some examples of restraining forces are fear, lack of training, and the lack of incentives. If the two sets of forces are equal, then there is no change. It is a valuable change-management tool.

Question 21

Which of the following is the mnemonic that suggests the wastes to be removed in value mapping process?

Answer 21

TIMWOOD.

The mnemonic TIMWOOD can help the buying organisation remember the seven wastes:

Transportation
Inventory
Motion
Waiting
Over-production
Over-processing
Defects

Question 22

In a project, a stakeholder is known to have High Power and Low Interest. According to the Mendelow’s matrix, what action should you take with them?

Answer 22

Low Interest and High Power: this group of stakeholders have the potential to move into the ‘High Interest and High Power’ group so it is essential that they are kept satisfied. By keeping them satisfied they are less likely to gain interest and exercise their power to influence.

Question 23

A university is planning a major upgrade to its information systems, migrating all student records and data files onto a new database system. A contractor has been hired specifically for this project. To procurement manager, ensuring the business continuity is a key concern. To deal with this concern, he reviews the contractor’s history performance, the market and other external factors so that all potential risks are enumerated. The procurement manager’s activity should be performed at which stage in business continuity planning?

Answer 23

Risk identification stage.

Question 24

Procurement can add value to an organisation in which of the following ways?

Answer 24

Understanding the level of competition in a market
Reviewing and monitoring supplier performance during contract period
Challenging the requirements from user department

The stages are of the procurement life cycle are:
understand needs, market review, develop strategy, supplier identification, develop documents, supplier selection, vendor evaluation, contract award and contract management.

Question 25

When a private sector organisation procures a product/service through a competitive bidding process and adopts weighted score to evaluate tenders, the price is always the most weighted criterion. Is this statement true?

Answer 25

No, because quality is more important than price in some circumstances”

At the tendering stage, several pieces of information are required in order for the buyer to be able to make their decision regarding awards, which may include: price, quality, risk assessment, social and environmental concerns, etc.

Question 26

XYZ Ltd is going to procure some high-pressure aluminum die castings which are very expensive and vital for their operations. A cross-functional team is formed to produce cost models for this project. The cost models must be robust so that the company will be able to anticipate different scenarios, like how international sourcing will affect the price, or whether XYZ Ltd should simplify the design.

The team has identified the cost elements such as materials, labour and overhead costs based on collected accounting data. Team members think that this data on cost elements is enough for them to analyse the possible trade-offs in each scenario. Is this assumption true?

Answer 26

No, XYZ Ltd should capture cost drivers to highlight the trade-offs in each scenario.

Cost elements are the components that make up the price of supplier’s product. Examples of cost elements are direct materials, costs of labour, overhead costs,…

Cost drivers are factors that may increase or decrease the costs. For example, if you order greater quantities from supplier, they tend to offer lower price since they have reached the economies of scale, which is a common cost driver.

Question 27

A cross organisational team was formed to work on a new project. After 3 months, team members have developed a sense of teamwork among the group. They support each other on the project - problem solving issues, making decisions as a team, sharing information and ensuring that the ground rules put in place for the team are followed. There are few arguments and disagreements that can’t be resolved among the team members and team manager is still involved in resolving those disagreements. Has this team reached the “performing” stage according Tuckman’s team development model?

Answer 27

Norming stage - No, because the team manager still has an important role in dispute settlement.

At ‘performing’ stage, the highly performing team functions without oversight and the members have become interdependent. The team is highly motivated to get the job done. They can make decisions and problem solve quickly and effectively. When they disagree, the team members can work through it and come to consensus without interrupting the project’s progress. If there needs to be a change in team processes - the team will come to agreement on changing processes on their own without reliance on the team leader.

Question 28

Which of the following is the right approach to overcome the stakeholders’ resistance to a procurement or a project?

Answer 28

Discover the drivers for resistance.

Question 29

What is the use of Common Procurement Vocabulary (CPV) in EU public procurement?

Answer 29

To send the contract opportunities to interested suppliers.

The Common Procurement Vocabulary (CPV) establishes a single classification system for public procurement aimed at standardising the references used by contracting authorities and entities to describe the subject of procurement contracts.

The aim of the CPV is to standardise, by means of a single classification system for public procurement, the terms used by contracting authorities and entities to describe the subject of contracts, by offering an appropriate tool to potential users (contracting entities/authorities, candidates or tenderers in contract award procedure).

Question 30

The flagship product of XYZ Ltd relies heavily on component A which is supplied by very few suppliers with no close substitute. XYZ Ltd has been working with the current supplier for a long time. This component is made mainly from cobalt, and any change in cobalt price will lead to price fluctuation of component A. It is said that cobalt price would increase significantly in the next quarter. Which of the following should be priority actions of XYZ’s procurement manager if the market for XYZ product is highly elastic?

Answer 30

1. Inform internal stakeholders

2. Work with supplier to mitigate the increase

Question 31

How can procurement add more value to buying organisation after tender evaluation and before contract award?

Answer 31

Hold reverse e-auction

Open post-tender negotiation

Question 32

A senior buyer is gathering information from stakeholders regarding whose interests should be taken into account throughout the project. This action is known as…?

Answer 32

Identifying stakeholder process

The following documents and techniques will help you find your stakeholders:

• Project Charter
• Contract Documents
• Procurement Documents
• OPA and EEF
• Interview the Experts
• Brainstorming Sessions

Question 33

The company, which has been handling the stages of institutionalization more professionally since 2004, in order to be able to execute processes that are more integrated and manage all flows with a single software, decided to switch to a new ERP software in 2016. When the decision was made, no integrated software was being used. Instead, each department used its own software. Some departments resisted to use the ERP software. Which of the following is the framework that helps management team understand the reactions of individuals to change?

Answer 33

An individual goes through various phases when resisting change. This is shown by the Kubler-Ross model.

The original five stages of grief – denial, anger, bargaining, depression and acceptance

Question 34

A cross-organisational team will generally involve in which of the following?

Answer 34

1. Developing a procurement strategy

2. Establishing a new business unit

Question 35

Which of the following are the purposes of identifying potential suppliers

Answer 35

• The number of suppliers in the marketplace that are able to provide the product or service
• Whether or not to use single or sole-source situation
• The relevant power between the buyer and supplier in the marketplace
• How suppliers in the marketplace position the buyer
• How the make-up of the marketplace affects the selection process

Question 36

According to partnership model by Lambert et al, Type 1 partnership relationship is typified by which of the following?

Answer 36

The relationship involves only one division or functional area.
Communication is conducted in an ad-hoc basis

Question 37

Which of the following is the mnemonic that describes the criteria of setting joint objectives in a partnership relationship?

Answer 37

SMART
SMART is a mnemonic/acronym, giving criteria to guide in the setting of objectives, for example in project management, employee-performance management and personal development. The letters S and M generally mean specific and measurable. Possibly the most common version has the remaining letters referring to achievable, relevant, and time-bound.

Question 38

She realises that in PCR, the employees have clearly delegated authorities within a highly defined structure. However, if needed, cross-functional team can be formed to solve a specific problem such as new product development. PCR is most likely to adopt which recognised organisational culture types?

Answer 38

1. Role
2. People

According Charles Handy, there are 4 types of organisational culture:

1. Power
2. Role
3. Task
4. People