CIPS Level 4 Supplier Relationships (L4M6)
The CIPS Level 4 Supplier Relationships (L4M6) unit focuses on understanding the dynamics of supplier relationships within supply chains. This unit explores different types of commercial relationships, the impact of competitive forces, and portfolio analysis techniques for assessing supplier relationships. It also covers stakeholder management, team collaboration, and strategies for improving supply chain partnerships.
This unit is essential for procurement professionals aiming to enhance their supplier relationship management (SRM) skills. It provides insights into value creation, conflict resolution, risk management, and the strategic importance of partnerships. Learners will gain a thorough understanding of when and how to establish partnerships, manage stakeholder relationships, and ensure continuity in supply chains.
By completing this unit, learners will be equipped with theoretical knowledge and practical skills to drive sustainable and value-driven supplier relationships, ensuring long-term procurement success.
Unit Objectives
The key objectives of studying CIPS Level 4 Supplier Relationships (L4M6) include:
- To provide in-depth knowledge of supplier relationship management (SRM) and its strategic impact on supply chains.
- To enable learners to differentiate between various commercial relationships and their role in procurement.
- To develop an understanding of competitive forces, risk management, and value-added strategies in supplier relationships.
- To equip learners with stakeholder management techniques, conflict resolution strategies, and practical skills for partnership development.
- To ensure learners can effectively assess, implement, and terminate supplier relationships using structured approaches.
Assessment Criteria
The assessment criteria for CIPS Level 4 Supplier Relationships (L4M6) align with the learning outcomes and indicative content. Assignments and evaluations focus on critical analysis, strategic decision-making, supplier management techniques, and stakeholder engagement. Learners must demonstrate their ability to:
LO1: Understand the dynamics of relationships in supply chains
This learning outcome focuses on identifying and differentiating various types of commercial relationships within supply chains. Learners will explore internal and external relationships, the relationship life cycle, and portfolio analysis techniques used to assess supplier positioning. The outcome also covers competitive forces, including bargaining power, market rivalry, and STEEPLED factors (social, technological, economic, environmental, political, legislative, ethical, and demographic influences). Additionally, learners will examine the sources of added value in supplier relationships, such as cost management, quality improvement, and sustainability considerations. By achieving this learning outcome, learners will develop a strategic understanding of how supplier relationships impact business performance and how to manage these relationships effectively.
LO2: Understand processes and procedures for working successfully with stakeholders
Learners will explore the importance of organisational procedures in supplier selection, ensuring value for money and fostering successful supplier relationships. This learning outcome focuses on team management techniques, including conflict resolution, stakeholder engagement, and team development stages (forming, storming, norming, performing, adjourning). Additionally, learners will assess practical stakeholder management considerations, such as cost modeling, price fluctuation management, early supplier involvement, risk mitigation, and innovation sharing. The outcome also includes the process of terminating stakeholder relationships, addressing legal considerations, confidentiality, succession planning, and potential conflicts. By attaining this outcome, learners will gain the ability to build, maintain, and, when necessary, professionally terminate supplier relationships while minimizing risks and ensuring business continuity.
LO3: Understand the concept of partnering
This learning outcome explores the concept of partnering in supply chains, focusing on when and why partnering is beneficial compared to traditional contracting. Learners will analyze different types of partnerships, key drivers for collaboration, and advantages for both buyers and suppliers. The outcome also covers the process of implementing partnerships, including defining performance standards, establishing joint commitments, and conducting partnership reviews. Furthermore, learners will identify common reasons for partnership failures, such as poor communication, lack of senior management support, cultural differences, market changes, and logistical challenges. By achieving this outcome, learners will develop the expertise to evaluate, establish, and sustain effective partnerships in procurement and supply chain management.
Learning Outcomes
1.0 Understand the dynamics of relationships in supply chains
1.1 Differentiate between different types of commercial relationships in supply chains
- Internal and external relationships
- The relationship spectrum across supply chains
- The relationship life cycle
1.2 Portfolio analysis techniques to assess relationships in supply chains
- Matrices to identify supply, supplier, and purchaser positioning
- Developing action plans to improve relationships across supply chains
1.3 Identify the competitive forces that impact relationships in supply chains
- Competitive forces: sources of competitive rivalry, bargaining power of buyers and suppliers, threat of new entrants and potential substitutes
- STEEPLED factors that impact supply chains (social, technological, economic, environmental, political, legislative, ethical, demographic)
1.4 Compare the sources of added value achieved through supply chain relationships
- The link between relationships as a process and the achievement of added-value outcomes
- 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
2.0 Understand processes and procedures for working successfully with stakeholders
2.1 Analyse the purpose of organisational procedures and processes in sourcing goods and/or services
- Securing value for money from suppliers
- Identification, assessment, and selection of suppliers to secure successful relationships
- Selection and awarding criteria to drive successful supplier relationships
2.2 Compare team management techniques to ensure positive stakeholder relationships
- Positive relationships through positive contributions
- Resolving stakeholder differences
- Identify sources of conflict and methods to manage conflict successfully
- Working with cross-organisational teams
- Stages of team development – forming, storming, norming, performing, adjourning
2.3 Compare the practical considerations of stakeholder management
- Accurate cost-modelling
- Reducing impact of price fluctuations
- Early supplier involvement in product and/or service development
- Knowledge transfer and access to innovation
- Common metrics to drive change for both organisations
- Improve risk management and continuity of supply
2.4 Identify the processes for terminating stakeholder relationships
- Reasons for termination
- The process of terminating a relationship
- The importance of timing when managing supplier issues
- Stakeholder impact of terminating a relationship: amicable and hostile responses
- Legal considerations – finances, confidentiality, IPR, security, employee rights
- Succession issues – continuity of supplies
3.0 Understand the concept of partnering
3.1 Analyse the concept of partnering and when to use it
- Types of partnering
- Compare partnering and ‘traditional’ contracting agreements
- The drivers for partnering
- Advantages of partnering for the purchaser and supplier
- 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 of partnership implementation
- Identify activities and/or spend suitable for partnering
- ‘Selling’ the partnership philosophy to internal stakeholders
- Defining the performance standards for potential partners
- Establish joint commitment for the partnership
- Partnership reviews and audit arrangements
3.3 Identify the reasons for partnership failure
- Communication
- Senior management support and trust
- Commitment of the parties
- Planning
- Value
- Changes in markets
- Cultural differences
- Logistics and proximity of the partners
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