Institute of Commercial Management | Qualification Subject

Purchasing Strategies

ICM Professional Diploma Unit

Purchasing

  • Purchasing defined
  • Scope of purchasing
  • Creating profit in a business
  • Processes examined
  • Place of purchasing
  • Financial impact of functions
  • Purchasing as a strategic process
  • Purchasing strategy and strategic purchasing

Building a Purchasing Strategy

  • Contribution and influence
  • Purchasing and audit framework
  • Organisation
  • Relationships
  • Systems
  • Staffing and training
  • Enabling foundation

Strategic Purchasing – Understanding and Influencing the Supply Market

  • Current problems
  • Upstream and downstream management
  • Supply planning
  • Special requirements identification
  • Contract strategy
  • Supplier selection
  • Contract finalisation

Understanding the Basics of Purchasing

  • Anyone can buy
  • Price and cost
  • Price and volume
  • Buyer power increases with size of organisation
  • Price lists
  • Competitive bidding
  • Negotiation and service/quality
  • Sealed bidding and security
  • Multiple sourcing
  • Price formulae
  • Buyer power and monopoly
  • Payment

Supply Positioning

  • Pareto analysis
  • Setting up a supply positioning analysis
  • Supply-market segmentation
  • Purchasing goals
  • Purchasing action scenarios
  • Other applications
  • Conglomerates’ purchasing

Supplier Preferences

  • Key account management
  • Customer segmentation by suppliers
  • Matching supply positioning with customer segmentation

Vulnerability Management

  • Identifying vulnerabilities
  • Assessing the risk
  • Managing the risk
  • Vulnerability analysis
  • Cost reduction
  • Other issues

Influencing the Supply Market

  • Procurement marketing
  • Reverse marketing
  • Affirmative vendor improvement

Buyer-Supplier Interface

  • Specific requirements identification
  • Getting early involvement
  • Supplier-buyer conditioning
  • Conditioning the buyer
  • Keeping the seller selling
  • Conditioning the seller

Options for Supplier Relationships

  • Make v buy
  • Market analysis
  • Supplier relationships
  • Changes in supply market
  • Buyers response to changing market
  • Dependency dilemma
  • Supply market orientated role for purchasing
  • Assessing competitive advantage

Partnership Sourcing

  • Definition
  • Why develop partnership sourcing?
  • Declared partnership goals
  • Key issues

Monopolies and Cartels

  • Monopolies
  • Determining the extent of the supply monopoly
  • Strategies to redress the balance
  • Cartels

Organising for Impact

  • Parkin wheel
  • External environment
  • Role
  • Relationships
  • Systems and structures
  • Resources

Measurement, Audit and Benchmarking

  • Why measure?
  • Operational or strategic
  • Use of indicators
  • Overall indicators
  • Indicators related to supply positioning
  • Limitations of indicators
  • Management by objectives
  • Measurement summary
  • Benchmarking

Example Candidate Response Booklet

Example Candidate Response (ECR) Booklets are a source of crucial information for Centres and Candidates as they use real candidate responses. We ask Senior Examiners to comment on five or more responses in terms of why the mark was awarded with commentary about how to improve the answer (if necessary).

Recommended Reading

Main Text:

Profitable Purchasing Strategies – Steele & Court (McGraw Hill)

Indicative Text:

Alternative Text and Further Reading: