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CIPS Level 4 - Scope and Influence of Procurement and Supply (L4M1)

Procurement and supply chain management play a crucial role in an organisation’s operational efficiency and strategic success. This unit explores the fundamental concepts of procurement and supply chain management, highlighting their interdependencies and the added value they generate for organisations. It also examines procurement structures, governance frameworks, stakeholder influence, and compliance requirements across different sectors.

The unit provides a comprehensive understanding of how procurement professionals can optimise processes, enhance value for money, and ensure compliance with legal and ethical standards. It also covers key procurement strategies, technological advancements, and best practices in procurement cycle management.

Unit Objective

This unit aims to develop learners’ understanding of the scope and influence of procurement and supply within an organisation. It covers essential procurement and supply chain management principles, stakeholder relationships, procurement cycle processes, and regulatory considerations in various sectors. Learners will explore the impact of governance, policies, and IT systems on procurement functions and develop the ability to analyse procurement structures and compliance requirements.

Upon completion of this unit, learners will be able to:

• Differentiate between procurement and supply chain management and identify sources of added value.
• Understand the procurement cycle and its role in achieving organisational objectives.
• Examine the impact of governance, policies, and organisational structures on procurement activities.
• Assess compliance requirements across different economic and industrial sectors.

Learning Outcomes

The significant learning outcomes of the unit CIPS Level 4: Scope and Influence of Procurement and Supply (L4M1) are demonstrated below:

LO1: Understand and analyse the added value that can be achieved through procurement and supply chain management

This learning outcome focuses on the fundamental concepts of procurement and supply chain management and how they contribute to organisational success. Learners will compare the role of procurement with supply chain management, understand complex supply chains, and examine supply chain tiering and logistics. The focus will also include waste management and closed-loop recycling as part of sustainability efforts. Additionally, learners will analyse the five rights of procurement, total life cycle costs, and value-for-money principles. They will explore how procurement categories such as direct, indirect, stock, non-stock, capital, and operational expenditures influence business operations. The understanding gained from this outcome will help learners improve procurement efficiency and supplier engagement strategies.

LO2: Understand and analyse the key steps when procuring goods or services

This outcome enables learners to understand and apply the CIPS Procurement Cycle, covering both pre-contract and post-contract award stages. Learners will explore the purpose and value addition of each stage in procurement, from need identification to supplier evaluation and contract management. The role of electronic systems such as e-requisitions, e-auctions, e-tendering, and online supplier evaluation tools will also be examined. Furthermore, learners will analyse the relationship between policy compliance and procurement efficiency, ensuring a balance between structured procurement processes and achieving added value. By mastering this learning outcome, learners will develop the skills to navigate procurement stages, apply e-procurement tools, and improve organisational purchasing practices.

LO3: Understand and analyse aspects of organisational infrastructure that shape the scope of procurement and supply chain functions

This learning outcome delves into the corporate governance aspects affecting procurement, including conflicts of interest, ethics, and accountability. Learners will explore the CIPS Code of Ethics, International Labour Organization (ILO) conventions, and the CIPS Code of Conduct. Additionally, they will analyse the impact of organisational policies and procedures on procurement functions, covering topics such as competition regulations, delegated authority, and sourcing responsibilities. Different procurement structures, including centralised, decentralised, and hybrid models, will be examined to understand their impact on procurement efficiency. Moreover, learners will explore common IT systems such as ERP, P2P, and inventory management tools, which support procurement and supply chain operations. Achieving this learning outcome ensures learners can navigate governance challenges, implement ethical procurement practices, and optimise procurement infrastructure.

LO4: Understand and analyse the need for compliance with requirements when undertaking procurement activities in different sectors

This learning outcome focuses on economic and industrial sector classifications, including public, private, and not-for-profit sectors. Learners will assess how public sector procurement is driven by social value, accountability, and compliance with regulations, while private sector procurement is influenced by market share, shareholder value, and ESG (Environmental, Social, and Governance) factors. Additionally, the role of branding, competition, and financial sustainability in procurement decisions will be examined. The third sector (charities and non-profits) will be explored in terms of regulatory compliance and mission alignment in procurement activities. By mastering this learning outcome, learners will enhance their ability to adapt procurement strategies to sector-specific challenges, ensuring compliance and value creation.

Assessment Criteria

LO1 Understand and Analyse the Added Value that can be Achieved through Procurement and Supply Chain Management

1.1 Compare the Concepts of Procurement and Supply Chain Management

• Definitions of procurement, supply chains, supply chain management, and supply chain networks
• Comparison of the role and function of supply chain management with procurement
• Definition and function of supply chain tiering
• Definition and issues related to complex supply chains
• Definitions of logistics and materials management
• Definitions of waste management and closed-loop recycling

1.2 Analyse the Different Sources of Added Value in Procurement and Supply

• The five rights of procurement
• Defining total life cycle costs or whole-life asset management
• Achieving five rights of procurement from external suppliers
• Other sources of added value: innovation, sustainability, and market development
• Defining value for money

1.3 Describe the Categories of Spend that an Organisation may Purchase

• Typical breakdown of organisational costs represented by procurement of goods, services, and constructional works
• Stock and non-stock procurement
• Direct and indirect procurement
• Capital purchases and operational expenditures
• Services procurement
• Utility procurement
• Commodity procurement

1.4 Differentiate the Stakeholders of Procurement or Supply Chain Functions

• Definition of stakeholders
• Examples of stakeholders in a procurement and supply chain function
• Mapping stakeholders for a procurement and supply chain function

LO2 Understand and Analyse the Key Steps when Procuring Goods or Services

2.1 Explain Each Stage of the CIPS Procurement Cycle

• CIPS Procurement Cycle: pre-contract award stages (stages 1-8) for generic procurement and supply activities
• CIPS Procurement Cycle: post-contract award stages (stages 9-13) for generic procurement and supply activities

2.2 Analyse Each Stage of the CIPS Procurement Cycle in Relation to Adding Value

• The purpose and added value created at each pre-contract award stage (stages 1-8) of the CIPS Procurement Cycle
• 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 Systems can be Used at Different Stages of the CIPS Procurement Cycle

• Definition and function of e-requisitions, e-catalogues, e-auctions, e-tendering, and online supplier evaluation systems
• The application of electronic systems at each pre-contract award stage (stages 1-8) of the CIPS Procurement Cycle
• The application of electronic systems at each post-contract award stage (stages 9-13) of the CIPS Procurement Cycle

2.4 Analyse the Relationship Between Policy and Process Compliance and Required Outcomes

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

LO3 Understand and Analyse Aspects of Organisational Infrastructure that Shape the Scope of Procurement and Supply Chain Functions

3.1 Explain Aspects of Corporate Governance Impacting the Procurement or Supply Chain Function

• Conflicts of interest
• The need for documented policies and procedures for procurement
• Organisational accountability and reporting for procurement roles and functions
• Code of ethics in procurement and supply: CIPS Code of Ethics and ILO (International Labour Organization) core conventions
• The CIPS Code of Conduct

3.2 Analyse the Impact of Organisational Policies and Procedures on Procurement and Supply

• Topics included in procedures for procurement and supply: responsibilities for procurement, regulations relating to competition, levels of delegated authority, responsibilities for the stages of the sourcing process, invoice clearance, and payment
• The use of procurement policies, procurement strategies, and procurement manuals
• The involvement of internal functions and personnel in the procurement process

3.3 Examine the Different Structures of a Procurement or Supply Chain Function

• The role and status of procurement and supply chain management within different organisations
• The use of centralised and decentralised structures
• The use of hybrid structures in procurement and supply chain functions

3.4 Explain the Common IT Systems that can be Used by a Procurement or Supply Chain Function

• P2P systems
• Systems for inventory management
• Enterprise resource planning (ERP)
• Communications systems for internal and external use
• Systems used to support e-sourcing, e-tendering, and e-auctions

LO4 Understand and Analyse the Need for Compliance with Requirements when Undertaking Procurement Activities in Different Sectors

4.1 Classify Different Economic and Industrial Sectors

• Economic classifications including public and private sectors, charities, not-for-profit, and third sector
• Industrial classifications and sectors such as manufacturing, retail, construction, financial, agriculture, and service

4.2 Analyse the Impact of the Public Sector on Procurement and Supply Chain Activities

• Objectives of public sector organisations: improving services, supporting communities and social value, and equality, diversity, and inclusion
• Regulations that impact procurement and supply chain operations
• Role of competition, public accountability, and value for money in public sector procurement and supply activities

4.3 Examine the Impact of the Private Sector on Procurement or Supply Chain Activities

• Objectives of private sector organisations: market share, shareholder value, environmental, social, governance, and economic viability
• Regulations that impact procurement and supply chain operations
• The importance and role of an organisation’s branding in procurement and supply activities

4.4 Examine the Impact of the Not-for-Profit or Third Sector on Procurement or Supply Chain Activities

• Objectives and principles of the not-for-profit or third sector
• Regulations that impact procurement and supply chain activities in charity and third sectors
• Need for procurement and supply activities to align with organisation context, mission, and objectives

CIPS Level 4 Diploma in Procurement and Supply

This unit is a core module of the CIPS Level 4 Diploma in Procurement and Supply, a globally recognised qualification designed for procurement professionals seeking to enhance their expertise. The unit aligns with CIPS best practices and industry standards, equipping learners with the knowledge and skills required to contribute effectively to procurement and supply chain functions.

By completing this unit, learners will gain a deeper understanding of procurement processes, ethical considerations, and regulatory compliance, preparing them for strategic roles in procurement and supply chain management.