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Module 2: Supply Environment
Download Full Version :
Which of the following should a buyer use when conducting price analysis? (Choose all
An analysis of competitive proposals
B. Comparisons with published prices
C. Comparisons with historical prices
D. Internal cost estimates
Answer: A, B, C, D
With which of the following departments within its own organization should purchasing
work MOST closely when performing supplier capability evaluations and site visits?
When (if ever) does a purchaser have the right to resell nonconforming goods and deduct
reasonable sales costs from proceeds? (Choose all that apply)
A. If the purchaser has paid for the goods and owns them
If the purchaser has rejected the goods, and the supplier has not responded in a
If the purchaser has accepted the goods and then found them in nonconformance
Answer: A, B
Which of the following is NOT a technique for increasing minority business
B. expediting supplier payment
C. establishing reasonable specifications
D. cooperative purchasing
Which of the following is the PRIMARY purpose of a trade association?
To advance the cause of the profession
To continually search for best practices in the industry
To lobby for the interests of the industries represented
D. To provide educational and research benefits to members
What is the MOST important thing a purchasing manager should do when meeting with
Make sure that all presentations are given in a professional manner
Avoid any impression of impropriety
Know as much about the audience as possible
Take meeting notes and reviewing them with the legal department
With which of the following does responsibility for resolving the cost aspects of a
defective purchased product usually lie?
A. The manufacturing manager.
B. The financial manager.
The purchasing manager.
The accounting manager.
ISM 630-006 Exam (C.P.M. Module 2: Supply Environment) Detailed Information
There is a reason why ISM has certified over 60,000 supply chain professionals in more than 30 countries. This professional achievement is valued by employers and organizations around the globe. Ready to take your career to the next level? There’s no better way than with an ISM certification.
Whether you want to stand out in your current career role or take your expertise to the next level, becoming a Certified Professional in Supply Management (CPSM) is essential. A CPSM certification will set you apart as an expert in critical areas of global supply chain management such as sustainability, strategic sourcing & forecasting and risk/compliance. As an ISM member you will receive discounted exam pricing and have access to exclusive online study materials and resources.
If your responsibilities include supplier diversity, expand your knowledge by becoming a Certified Professional in Supplier Diversity (CPSD). Professionals who participate in the development of diverse supplier initiatives within their organization also earn their CPSM to set themselves apart as leaders in the field. There’s no better way to demonstrate to your employer, colleagues, customers and suppliers that you adeptly speak the language of purchasing and supply chain.
Fundamentals of Purchasing — A Component of Supply Management, 2nd Edition - Self-Study Course
Fundamentals of Purchasing — A Component of Supply Management, 2nd Edition - Self-Study Course
A purchasing professional's day is exciting because every day is different. However, the many hats you wear can also make your job more difficult. Gain, or revisit, fundamental concepts of purchasing with this self-study workbook. It explores why, and how, purchasing and supply management is a business strategy by developing your skills in competitive bidding, contract creation and management, legal matters and the categorization of purchases and suppliers. Learn the latest sourcing value-add opportunities and how to incorporate sustainability, social responsibility and the ISM Report on Business® into your day-to-day activities. You'll build a solid foundation to ensure you are a valuable member of your purchasing team.
Note: This self-study workbook is equivalent to the Fundamental of Purchasing online Knowledge Center course
THE KEY TO UNLOCKING YOUR TRUE CAREER POTENTIAL
Being certified by ISM, whether it’s a CPSM® or CPSD™, is one of the most important decisions you will make. Those four letters after your name carry a lot of weight in the global supply management field because they are backed by ISM’s reputation and more than 100 years of credibility. More than a badge of honor, they announce to all that you have mastered critical skills and can apply them to real-world situations to achieve superior outcomes.
Stand out from your peers. Earn more. Win promotions. Impress employers. These are the possibilities that a globally recognized ISM certification can help make a reality. Can you afford not to have one?
DISCOVER THE DIFFERENCE
Don’t confuse an ISM certification with a certificate program. An ISM certification is a highly valued professional credential. Utilizing a robust methodology and adhering to set standards, ISM certification is created from the guidance of supply management professionals across industries, roles and experience levels. It measures your excellence across a broad scope of critical supply management concepts. And, once you are certified, an ISM certification allows you to use a prestigious designation after your name. A certificate program, on the other hand, is typically more narrow in focus. But the real difference? An ISM certification is dynamic and evolves with the profession — we require you to recertify, proving you have kept current with the profession through continuing education. A certificate program has no such requirements.
Is it any wonder that employers place such a high value on an ISM certification? Join 60,000 other supply management professionals and get your CPSM now!
ISM will help guide you along the way
CPSM® (Certified Professional in Supply Management®)
TRANSFORM YOURSELF INTO A HIGH-DEMAND ASSET
Successful organizations keep a sharp eye out for employees who have a deeper understanding of supply management concepts: They perform consistently at a higher level and possess enhanced strategic thinking. The CPSM is the gold standard of supply management credentials. It is proof that you have mastered specific core competencies and can apply them in your daily role to create winning outcomes. Find out how a CPSM can catapult you to greater success.
CPSD™ (Certified Professional in Supplier Diversity®)
BECOME THE EXPERT YOUR ORGANIZATION NEEDS
As demographics continue to change, organizations increasingly need experts to implement or oversee their supplier diversity programs. Leading companies realize the competitive advantage that supplier diversity can provide. With a CPSD, you can become the expert they need and guide them to make intelligent and profitable supplier diversity decisions. Discover how a CPSD can make you indispensable.
(Certified Professional in Supply Management®)
MASTER YOUR DESTINY. ACCELERATE YOUR CAREER.
To boost the bottom line, companies are searching for skilled and knowledgeable supply management professionals to help streamline supply management efforts and reduce costs while maintaining quality. Becoming a CPSM instantly raises your visibility. The globally recognized CPSM designation is the premier supply management credential, the one all others are measured against. Built on an in-depth analysis of supply management functions across industries, the CPSM will identify you as someone with mastery of critical concepts in procurement and sourcing, negotiating, contracts and leadership.
Go for your CPSM and show companies you’re the supply management expert they need. Use it as a springboard for your role as a future supply management leader. The time is NOW!
MORE REASONS WHY YOU SHOULD BECOME A CPSM
ROI — You’ll typically earn more than peers who don’t have a credential — on average 9% more.
RELEVANT — The exam questions are created by supply management professionals and reflect real situations and experiences rather than relying on abstract classroom theory.
TRANSPORTABLE — Your CPSM is globally recognized and remains valid if you change industries.
CURRENT — ISM periodically updates the CPSM to reflect changes in roles and practices over time.
PRESTIGE — Many managers require a CPSM for certain positions or favor candidates who hold one.
PRICED FAIRLY — A CPSM is competitively priced when compared to other well-known certifications.
(Certified Professional in Supplier Diversity®)
BUILDING SUCCESSFUL RELATIONSHIPS – AND PROFITS
ISM’s Certified Professional in Supplier Diversity® (CPSD™) certification program is one of the few that exists for this growing and much-needed specialization. Many companies engage in supplier diversity to be socially responsible or to meet customer or federal requirements, but don’t understand its true profit potential. As a CPSD, you’ll be the guiding hand with the knowledge and training to show an organization how supplier diversity can improve the bottom line and accelerate innovation by becoming more efficient and by getting exposure to new customer bases.
More Benefits to Becoming a CPSD
ROI — You’ll typically earn more than peers who don’t have a credential — on average 17% more.
PREPARED — 45% of supply management professionals currently handle diversity-related tasks.
IN DEMAND — Companies desperately need an expert to lead their supplier diversity efforts.
EFFECTIVE — You can help reduce costs and bring innovation because many smaller diverse suppliers are often more nimble and innovative than larger suppliers.
RELEVANT — The exam questions are created by supply management and diversity professionals and reflect real situations and experiences rather than relying on abstract classroom theory.
TRANSPORTABLE — Even if you change industries, your CPSD is recognized.
CURRENT — ISM periodically updates the CPSD to reflect changes in supplier diversity practices.
PRICED FAIRLY — A CPSD is competitively priced in comparison to well-known certifications.
Requirements Study Materials Exam Content Exam Registration Contact Us
Calling All Supplier Diversity Professionals, Please Share Your Expertise
ISM is looking for input from professionals like you. We’re conducting an in-depth Job Task Analysis research study to learn how job titles and roles have changed within the supplier diversity field, then analyzing this information to tailor our educational resources to better suit the needs of professionals. To help our project be as complete and accurate as possible, click the here to sign up for the survey.
3 Supply Chain Certifications That Will Help You Land a Job
January 9, 2014 by Daniel Humphries
Supply chain professionals considering a certification face a bewildering array of options—there are multiple organizations and certifications from which to choose.
While acquiring a certification can have a significant effect on your career trajectory, it’s a process that requires a considerable outlay of time and money. For individuals in the early stages of their career, it can be difficult to make an informed choice. To help make this decision easier, we set out to learn which certifications are in fact worth pursuing.
Whatever certification you choose, you should first make sure it is as widely recognized as possible. In this article, we focus on three well-known and reputable certifications:
The Certified Supply Chain Professional (CSCP) and Certificate in Production and Inventory Management (CPIM) offered by The Association for Operations Management (APICS);
The Certified Professional in Supply Management (CPSM) from the Institute for Supply Management (ISM); and
The SCPro™ from the Council of Supply Chain Management Professionals (CSCMP).
To find out the benefits each certification offers and what positions they’re ideal for, we interviewed three supply chain professionals with almost a century of experience between them:
Bob Ferrarri, consultant and industry analyst who runs the prominent Supply Chain Matters blog;
Rich Sherman, “supply chain guru” at consulting firm Trissential and author of the book, Supply Chain Transformation: Practical Roadmap to Best Practice Results; and,
Monty Boyle, the common process deployment specialist for BP and a consultant who has received almost all of the certifications discussed in this article.
CSCP: Ideal for General Supply Chain Careers
Before you select a certification, it’s essential to know what areas of supply chain management appeal to you. If you’re looking to first gain a broad overview, then Ferrarri, Boyle and Sherman agree: the best certification is the CSCP from APICS.
First launched in 2006, over 13,000 supply chain professionals in 78 countries have since gained the CSCP. According to the APICS, it “provides you with a mastery of supply chain management best practices and distinguishes you as an industry expert with specialized, high-level knowledge and skills.”
But what’s actually in it? I asked Ferrarri, who, in spite of his three decades of experience in supply chain management, took the certification five years ago to see if he was “up to speed.” His reply? More or less “everything.”
Boyle, who also took the CSCP after working in supply chain management for decades, elaborates on this: “It teaches you to look at the supply chain from a broad perspective; to view the relations between the areas of planning, sourcing, manufacturing and delivering and see how the overall supply chain integrates.”
The eligibility requirements for the CSCP require one of the following:
Another APICS or ISM certification, plus two years of related business experience;
A bachelor’s degree or equivalent, plus two years of related business experience; or
Five years of related business experience.
APICS sells course materials and offers online or in-person courses at local chapters throughout the country. The cost and length of study varies according to which path you choose. For instance, APICS’ online education program materials cost $1,250, although a $200 APICS membership will knock $330 off this.
The exam registration fee is $630, or $795 for nonmembers. Ferrarri estimates that a driven individual could be ready for the exam in three to six months.
APICS’ own research indicates that the CSCP is a worthwhile investment. According to the organization, individuals with a CSCP certification earn an average of 21 percent more than their CSCP-free peers, while 62.6 percent of certified supply chain professionals think their certification had a “positive impact on their hiring potential.”
Another advantage of the CSCP, Ferrarri says, is that it’s what many employers want. “More and more companies today are seeking generalists—people with cross-functional knowledge, experience and skills,” he explains.
Sherman agrees. “Supply chain management is evolving into a truly end-to-end process that synchronizes cross-functional activities and includes suppliers and customers,” he says.
“Employers want to have managers that not only have an understanding of the function they’re responsible for, but for how their processes interact with other functional processes and organizations. This is especially important as the person’s career moves forward and their responsibilities include more functions.”
CPIM: Ideal for a Career in Inventory Management
The CSCP can be “mixed and matched” with other certifications, should you later decide to venture deeper into a specific area. According to our experts, if you’re seeking a career in inventory management, then APICS’ CPIM is the best certification to get.
Over 100,000 people have pursued the CPIM since its inception in 1973, making it the most recognized of all the certifications discussed here. APICS describes the CPIM in rather broad terms on its site, but Sherman boils it down to the following: “You get the CPIM if you want to learn production planning and scheduling and inventory management. It’s very plant floor focused.”
No bachelor’s degree is required, and you need only two or more years of experience in the field. Boyle, who has the CPIM, says that each individual will get something different out of it depending on their prior experience, but stresses that the certification training provides everyone with a solid grounding in the terminology and thought processes involved in production and inventory management.
As a result, people who have the CPIM share common concepts and terminology that are very valuable in the workplace. For example, Boyle highlights the section of the exam dedicated to manufacturing capacity planning, which analyzes capacity planning in three ways: according to the factors of a master production schedule, using capacity bills and using resource profiles. Anyone with the CPIM will likely approach capacity planning in a similar way.
Be warned, however: unlike the CSCP, the CPIM requires you to take not one, but five exams on five different modules of study: Basics of Supply Chain Management, Master Planning of Resources, Detailed Scheduling and Planning and Execution and Control of Operations.
APICS offers self-study materials and instructor-led online and in-person courses, where the prices vary from center to center. The online review course costs $2,645 or $1,995 if you’re a member of APICS. The exams cost $145 each.
According to APICS, those with the CPIM earn 14 percent more than those without it, while 64.4 percent believe getting certified had a positive impact on their careers.
CPSM: Ideal for a Career in Procurement
The ISM offers two certifications: the CPSM and the CPSD (Certified Professional in Supply Diversity). The consensus among our experts is that the CPSD is a highly specialized qualification best suited to individuals at a relatively advanced stage of their careers, so we won’t cover it here.
The CPSM was launched in 2008 and has a strong focus on procurement. Or, as Sherman puts it: “ISM is an organization for procurement and strategic sourcing people. The certification program is strongly focused on purchasing and procurement.”
Ferrarri agrees: “It’s very specialized—you’ll study procurement practices, contract management, financial management and more. From what I see, it’s good for people who have maybe been in a procurement position for five years, and now want to advance.”
Boyle, who has the CPSM, stresses again that the certification equips professionals with shared language, terminology and ideas. And like APICS, the ISM says that those with the certification can earn more: ISM’s own salary survey for 2013 states that professionals with a CPSM earn 9 percent more than those without it.
Requirements for the certification are:
Three years of full-time, professional supply chain management experience (nonclerical, nonsupport) with a bachelor’s degree from a regionally accredited institution or international equivalent, or;
Five years of full-time, professional supply chain management experience (nonclerical, nonsupport) without a qualified bachelor’s degree, and;
Successfully pass three CPSM exams, or pass the Bridge Exam if you’re a CPM “in good standing.” (The CPM is an older certification from the ISM, now retired.)
The ISM is flexible and offers a wide array of resources for preparation. David Panzera, strategic sourcing manager at international chemicals firm Arkema, became CPSM certified in 2011. He wanted to demonstrate to potential recruiters that he was up to date in the field after spending a few years working in sales.
Studying by himself, it took Panzera about five months to gain the CPSM. With the three exams—Foundation of Supply Management, Effective Supply Management Performance, Leadership in Supply Management—which cost $199 each for ISM members ($299 for non-members), plus the cost of books, he estimates he spent around $800 to get certified.
In addition to the benefits of the CPSM certification itself, Panzera says the ISM offers excellent networking opportunities—he’s very active in his local chapter in Philadelphia. Sherman says the same thing about APICS, and adds that managers may be more likely to recruit people with the same certification and group affiliations that these organizations have.
A Future Investment: The SCPro™
Honorary mention goes to the SCPro™ certification, which is offered by the large and prestigious CSCMP. Traditionally an organization with a strong focus on logistics, the CSCMP is seeking to cover the broader supply chain field with its new certification program, which was just launched in 2012.
Ferrarri and Sherman both highlighted the SCPro™ as a certification to watch, even if it’s not yet widely recognized. Like the CSCP, the SCPro™ is intended as an end-to-end course. The certification has three levels, and thus offers those who take it the opportunity to explore supply chain issues on a much deeper level.
“I think that SCPro™, with its three levels of study, will be much stronger down the road,” Sherman says. “It’s an advanced certificate in problem solving and project management. Level One is equivalent to the CSCP. At Level Two, you go deeper: there are case studies you have to solve, like you’d get in a master’s degree program. At Level Three, you execute performance improvement in an actual company—either your own company, or they’ll find you one. You have to make real world changes.”
Sherman believes that the SCPro™ may ultimately benefit people in the long run, once the certification becomes more well-known in the job market. “It’s a future hedge,” he says. “If you have a CSCP or CPIM, look at the SCPro™ to give you a competitive edge five to ten years down the road. The investment will grow in value over time.”
For more information about the SCPro™, click here.
Supply Chain Certifications: A Valuable Investment
There are many factors to consider when contemplating whether to get a professional supply chain certification, but our experts agree: all three certifications discussed here are excellent qualifications that will most likely set you apart from the competition when searching for a job.
In Ferrarri’s view, certifications are increasingly becoming a prerequisite in supply chain careers. Sherman points out that, if confronted with two candidates of equal experience, one of which has a formal certification, a recruiter will almost certainly opt for the certified individual. “It’s all about risk mitigation,” he explains.
Boyle agrees, but adds that ultimately, a lot comes down to you—you’ll need to take the time to do your research and think carefully about your own career goals to decide which certification is best for you.
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