CIPS L5M4 Exam Topics
CIPS L5M4 Exam Overview :
| Exam Name: | Advanced Contract and Financial Management |
| Exam Code: | L5M4 |
| Certifications: | CIPS Level 5 Advanced Diploma in Procurement and Supply Certification |
| Actual Exam Duration: | 180 minutes |
| See Expected Questions: | CIPS L5M4 Expected Questions in Actual Exam |
CIPS L5M4 Exam Objectives :
| Section | Objectives |
|---|---|
| Understand and apply tools and techniques to measure and develop contract performance in procurement and supply | 1.1 Assess the application of key performance indicators (KPIs) in delivering contract performance 1.1.1Effectiveness of supplier relationships 1.1.2Cost 1.1.3Quality 1.1.4Delivery 1.1.5Safety 1.1.6Environmental, Social, and Governance (ESG) considerations 1.1.7Product development 1.2 Evaluate methods of measuring and improving contract performance 1.2.1Sources of data and analysis of data in relation to cost, quality, delivery, safety, and ESG (Environmental, Social, and Governance) considerations 1.2.2Measures supporting the improvement of ESG (Environmental, Social and Governance) considerations 1.2.3Measures supporting the improvement of innovation in procurement and supply 1.2.4Measures assessing product development time to market 1.2.5Role of qualitative and quantitative data to measure and improve contract performance 1.2.6Calculate and analyse return on investment for the use of data in measuring contract performance 1.2.7Assess opportunities for data systems integration across supply chains 1.3 Examine approaches available for supplier contract performance 1.3.1Context and scope for Supplier Contract Development 1.3.2Supplier capability assessments 1.3.3Learning, knowledge, and technology transfer between and across organisations 1.3.4Collaborative product/service development: cross functional working, early supplier involvement, supplier networks, supplier co-ordination and supplier forums 1.3.5Continuous improvement strategies, action plans, and reviews 1.4 Assess scope and developments to improve ESG (Environmental, Social, and Governance) considerations in supply chains 1.4.1Environmental measures 1.4.2Social and social value measures 1.4.3Governance measures 1.4.4New supply chain finance |
| Understand and apply the concept of strategic sourcing | 2.1 Assess the market factors that influence strategic sourcing 2.1.1Industry dynamics 2.1.2Pricing behaviour 2.1.3Financial data relating to suppliers 2.1.4Market demand and supply factors 2.1.5Business motivations, cost margins, and working practices of key suppliers 2.1.6Internal stakeholder involvement 2.1.7ESG (Environmental, Social, and Governance) Considerations 2.2 Examine the assessment of sourcing options and trade-offs for strategic supply of products and/or services 2.2.1Contract type and duration 2.2.2Competitive vs. non-competitive sourcing 2.2.3Number of suppliers and vetting strategies 2.2.4Marketplace competition and the role of competition regulators 2.2.5Direct negotiation 2.2.6Joint proposition improvement 2.2.7Supply chain visibility 2.3 Analyse a strategic assessment plan for a key supplier using modeling and analytical techniques 2.3.1Capacity and capability 2.3.2Planning 2.3.3Quality control systems 2.3.4Security 2.3.5Technical expertise 2.3.6Reputation and time established 2.3.7Trading with competitors 2.3.8Future expansion opportunities – partnership potential 2.3.9Sensitivity analysis and calculation of investment outcomes based on a range of assumptions 2.3.10Supplier performance based on financial data: calculate percentage change in revenues, costs, and profits 2.3.11Sales forecast data and calculation of variances when comparing sales forecast data with the wider market |
| Understand and apply financial techniques that affect supply chains | 3.1 Analyse how finance can impact on supply chains 3.1.1Role of financial management in supply chains 3.1.2Options and risks of Working Capital Funding and the role of Credit Insurance 3.1.3Project funding options and assessment of the cost of capital using the weighted average cost of capital (WACC) 3.1.4Medium and long-term financing options 3.1.5Financing of Investments, Corporate Financing Options, and the role of Dividends 3.2 Appraise methods for managing the volatility of currencies in supply chains 3.2.1Calculation of changes in indices to inform cost analysis 3.2.2Fixed and floating exchange rates 3.2.3Demand and Supply Factors in foreign exchange and the reasons for Exchange Rate volatility 3.2.4Spot, forward, and derivative instruments in foreign exchange 3.2.5Services provided by the banking sector in foreign exchange 3.3 Analyse methods for managing the volatility of commodities 3.3.1Types of commodities 3.3.2Operation of commodity markets 3.3.3Role of speculation in commodity markets 3.3.4The operation of spot, forward, futures, and hedging in the buying and selling of commodities 3.3.5The operation of Contract for Difference (CFD) in commodity markets |
| Assess financial measures that can be applied to the performance of the supply chain | 4.1.1Calculation and evaluation of performance measures linked to cost, time, quality, and customer satisfaction 4.1.2Calculation and evaluation of financial measures of efficiency (ROCE), cash flow, sales growth, investment (IRR and NPV), and variances over time 4.1.3Assessment of measures: stock turn, share yield, and earnings per share 4.1.4Use, interpretation, and limitations of balanced scorecards 4.2 Examine the impact of stakeholder feedback on the supply chain performance 4.2.1Purpose of Stakeholder Feedback in Developing Supply Chain Performance 4.2.2Devising metrics of performance including feedback from third parties suppliers, and other stakeholders 4.2.3Receiving feedback, reporting structures, and processes 4.3 Analyse approaches to benchmarking that can be applied to measuring supply chain performance 4.3.1Use and limitations of benchmarking in supply chains 4.3.2Supplier involvement in performance improvement 4.3.3Ethical approach the collection, storage, and use of benchmarking data |
| 1.0 Understand and apply tools and techniques to measure and develop contract performance in procurement and supply | 1.1 Assess the application of key performance indicators (KPIs) in delivering contract performance 1.1.1Effectiveness of supplier relationships 1.1.2Cost 1.1.3Quality 1.1.4Delivery 1.1.5Safety 1.1.6Environmental, Social, and Governance (ESG) considerations 1.1.7Product development 1.2 Evaluate methods of measuring and improving contract performance 1.2.1Sources of data and analysis of data in relation to cost, quality, delivery, safety, and ESG (Environmental, Social, and Governance) considerations 1.2.2Measures supporting the improvement of ESG (Environmental, Social and Governance) considerations 1.2.3Measures supporting the improvement of innovation in procurement and supply 1.2.4Measures assessing product development time to market 1.2.5Role of qualitative and quantitative data to measure and improve contract performance 1.2.6Calculate and analyse return on investment for the use of data in measuring contract performance 1.2.7Assess opportunities for data systems integration across supply chains 1.3 Examine approaches available for supplier contract performance 1.3.1Context and scope for supplier contract development 1.3.2Supplier capability assessments 1.3.3Learning, knowledge, and technology transfer between and across organisations 1.3.4Collaborative product/service development: cross functional working, early supplier involvement, supplier networks, supplier co-ordination and supplier forums 1.3.5Continuous improvement strategies, action plans, and reviews 1.4 Assess scope and developments to improve ESG (Environmental, Social, and Governance) considerations in supply chains 1.4.1Environmental measures 1.4.2Social and social value measures 1.4.3Governance measures 1.4.4New supply chain finance |
| 2.0 Understand and apply the concept of strategic sourcing | 2.1 Assess the market factors that influence strategic sourcing 2.1.1Industry dynamics 2.1.2Pricing behaviour 2.1.3Financial data relating to suppliers 2.1.4Market demand and supply factors 2.1.5Business motivations, cost margins, and working practices of key suppliers 2.1.6Internal stakeholder involvement 2.1.7ESG (Environmental, Social, and Governance) considerations 2.2 Examine the assessment of sourcing options and trade-offs for strategic supply of products and/or services 2.2.1Contract type and duration 2.2.2Competitive vs. non-competitive sourcing 2.2.3Number of suppliers and vetting strategies 2.2.4Marketplace competition and the role of competition regulators 2.2.5Direct negotiation 2.2.6Joint proposition improvement 2.2.7Supply chain visibility 2.3 Analyse a strategic assessment plan for a key supplier using modelling and analytical techniques 2.3.1Capacity and capability 2.3.2Planning 2.3.3Quality control systems 2.3.4Security 2.3.5Technical expertise 2.3.6Reputation and time established 2.3.7Trading with competitors 2.3.8Future expansion opportunities – partnership potential 2.3.9Sensitivity analysis and calculation of investment outcomes based on a range of assumptions 2.3.10Supplier performance based on financial data: calculate percentage change in revenues, costs, and profits 2.3.11Sales forecast data and calculation of variances when comparing sales forecast data with the wider market |
| 3.0 Understand and apply financial techniques that affect supply chains | 3.1 Analyse how finance can impact on supply chains 3.1.1Role of financial management in supply chains 3.1.2Options and risks of Working Capital Funding and the Role of Credit Insurance 3.1.3Project funding options and assessment of cost of capital using weighted average cost of capital (WACC) 3.1.4Medium and long-term financing options 3.1.5Financing of Investments, Corporate Financing Options, and the role of dividends 3.2 Appraise methods for managing the volatility of currencies in supply chains 3.2.1Calculation of changes in indices to inform cost analysis 3.2.2Fixed and floating exchange rates 3.2.3Demand and supply factors in foreign exchange and the reasons for exchange rate volatility 3.2.4Spot, forward, and derivative instruments in foreign exchange 3.2.5Services provided by the banking sector in foreign exchange 3.3 Analyse methods for managing the volatility of commodities 3.3.1Types of commodities 3.3.2Operation of commodity markets 3.3.3Role of speculation in commodity markets 3.3.4The operation of spot, forward, futures, and hedging in the buying and selling of commodities 3.3.5The operation of Contract for Difference (CFD) in commodity markets |
| 4.0 Analyse and apply financial and performance measures that can affect the supply chain | 4.1 Assess financial measures that can be applied to the performance of the supply chain 4.1.1Calculation and evaluation of performance measures linked to cost, time, quality, and customer satisfaction 4.1.2Calculation and evaluation financial measures of efficiency (ROCE), cash flow, sales growth, investment (IRR and NPV), and variances over time 4.1.3Assessment of measures: stock turn, share yield, and earnings per share 4.1.4Use, interpretation, and limitations of balanced scorecards 4.2 Examine the impact of stakeholder feedback on the supply chain performance 4.2.1Purpose of stakeholder feedback in developing supply chain performance 4.2.2Devising metrics of performance including feedback from third parties and suppliers, and other stakeholders 4.2.3Receiving feedback, reporting structures, and processes 4.3 Analyse approaches to benchmarking that can be applied to measuring supply chain performance 4.3.1Use and limitations of benchmarking in supply chains 4.3.2Supplier involvement in performance improvement 4.3.3Ethical approach the collection, storage, and use of benchmarking data |
| Official Information | https://www.cips.org/qualifications/advanced-diploma-in-procurement-supply/advanced-contract-and-financial-management |
Updates in the CIPS L5M4 Exam Topics:
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