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L5M6 Category Management - paper *1.
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1.
Which of the following plays a fundamental role in establishing categories when developing a category management strategy?
2.
A category management approach can deliver a number of benefits to the organisation’s core strategic objectives. Better insight into where money is spent and with suppliers is gained is one of those benefits. What other benefits are gained?
1. Fewer contracts
2. Better prices and improved terms and conditions
3. stakeholder satisfaction
4. improved supplier relationships
5. Opportunities for innovation are revealed through collaboration.
6. better risk management leading to contingency planning
3.
Dave, a category manager, has been tasked with analysing the direct costs for his car manufacturing organisation. Dave is analysing the costs of steel components, plastic sub-assemblies and tyres. Is Dave analysing the correct types of costs?
4.
Which of the following are steps of AT Kearney’s 7 step model for the adoption of category management?
1. Profile the category
2. Select the implementation path
3. Reducing the organisation’s supply chain
4. Consolidating the category’s international suppliers
5.
Which of the following are key behavioural skills required to implement category management?
1. Financial analysis
2. Team working
3. Effective communication
4. Risk management
6.
Strategic sourcing is concerned with the alignment of long-term organisation-wide goals and objectives. Strategic procurement’s key tools include which of the following?
1. Individual assessment of supplier quotations
2. Aggregation and assessment of demand patterns
3. Outsourcing v manufacturing in-house decisions
4. Internal process benchmarking
7.
A category manager has identified a number of 'bottleneck' suppliers on which the organisation has a high level of critical dependency. They plan to identify alternative sources of supply as a contingency. Is this the right course of action?
8.
Customers who are perceived as 'exploitable' by suppliers will receive poor quality service. Is this true?
9.
A new category head (CH) has recently joined Health Care International (HCI), a large private healthcare organisation.
The category management concept is new to the organisation and a number of important stakeholders have yet to fully embrace it. The CH has identified the stakeholders and has analysed their involvements and needs. They have so far had meetings with the two most important stakeholders. They first introduced themselves and immediately said to the CH “I'm interested in what you're going to tell me, but just so you know, I am the budget holder and ultimately I decide what happens”. The second stakeholder was less forceful saying “It’s good to meet you. I'm interested in hearing all about it and discovering what we can do to help each other”. These two stakeholders used different influencing techniques. Identify the two techniques.
1. Reciprocity
2. Scarcity
3. Consistency
4. Authority
10.
From the items listed below which of the following options is the earliest stage in establishing a category management approach?
11.
Esther is a procurement manager for Summer & Sons, which is developing its procurement team to be a category management focused team.
It has been identified that a key area that needs improving for Summer & Sons is its supplier relationship management process as currently suppliers are only contacted by procurement when new sourcing requirements arise or when internal stakeholders request procurement’s support in rectifying a quality issue. Esther is planning to use a Pareto analysis to initially segment Summer & Sons’ spend. How will this help her to develop a supplier relationship strategy?
12.
Chloe is a category manager at ABS Inc. She always focuses on using the concept of total cost of ownership or whole life cost for her earth-moving equipment category. Is this a correct approach to her category management role?
13.
Dick is category manager is responsible for category planning which includes defining categories and sub-categories, strategies to reduce risk and maximising value.
He develops the plan in consultation with stakeholders to ensure it is relevant and is supported. He also regularly reviews the category plan on an annual basis. (i) What do you expect to find in the first and last sections of his category plan respectively?
14.
A category management framework remains the same regardless of the category. What correct sequence of flow for a category management process would you expect?
15.
To support the category board/committee/council, what does the procurement function do? Select all THREE that apply
1. Link the business to the supply markets
2. Prepare market analysis
3. Define business requirements
4. Outline strategic options
16.
Technical skills required for the implementation of a category management methodology across the organisation, with suppliers and other stakeholders for effective category management will include which FOUR of the following?
1.Financial management and cost analysis
2. Supply chain analysis
3. Working in teams
4. Leadership and skills development
5. Risk management
6. Negotiation
17.
Which of the following are key activities during the ‘kick off’ phase when implementing a category management approach from the CIPS category management model?
1. Defining the category scope
2. Evaluating potential benefits
3. Identifying the stakeholders
4. Prioritising identified opportunities
18.
The ‘cost of goods sold’ within a supplier’s financial statements show the supplier’s direct costs of producing finished goods. Is this correct?
19.
Successful category management must be implemented in its entirety with its supports and enablers. Choose the correct combination of supports only
20.
Cross-functional teams are an integral part of successful category management. What would be the best composition of a cross-functional team?
1.Members of the procurement function only
2. People from different functional and technical areas
3. Procurement team members and suppliers
4. People with a range of skills that can benefit a category such as risk-taking, relationship building, creativity, and ability to communicate
21.
When applying Porter’s Five Forces tool, which of the following will have the greatest impact on the likelihood of new entrants to the industry?
1. Stakeholders’ physical locations
2. Level of regulation and government control
3. Product packaging and design
4. Initial set-up costs
22.
The Board of Management of a leading company that provides facilities management services (such as the maintenance of buildings, catering, cleaning and security) to customers that operate in both the private and public sectors, is looking to implement a category management process to improve their procurement and supply.
Which of the following methodologies can be proposed to categorise the company’s mix of expenditures?
1. Pareto analysis
2. Kralijic matrix
3. Cost model like direct and indirect cost model
4. STEEEPLED analysis
23.
Category management process must always be measured to ensure it effective. Four classes of performance measures can be used to assess the success of a category management process.
1.Category specific measures
2.Relationship specific metrics
3.Purchasing process metrics
4.Organisational metrics
A category management performance assessor decides to look into issues such as prices, price paid per hour, savings per employee or worker, contract coverage of either the number of employees or
workers or the geographical coverage. What class of performance measure is he focusing on?
24.
A strategic approach to procurement where organisations segment their spend into areas which contain similar or related products enabling focus opportunities for consolidation and efficiency defines which of the following?
25.
A very specialised procurement role in the handling of good or services for a specific category e.g. services, logistics, transport, security, and is responsible for planning and sourcing the area which requires having a background in the category being handled as well as overseeing the day-to day activities of the category division speaks to which of the following roles?
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