CPSD™ Exam 1 Specification

Foundation of Supply Management Certified Professional in Supplier Diversity® (CPSD™)

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Table of Contents

Foundation of Supply Management – Exam 1Contracting and Negotiation: 1-A-1 to 1-A-5 3

Cost and Finance: 1-B-1 to 1-B-5 3

International: 1-C-1 to 1-C-3 3

Social Responsibility: 1-D-1 to 1-D-3 4

Sourcing: 1-E-1 to 1-E-3 5

Supplier Relationship Management: 1-F-1 to 1-F-6 5

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Foundation of Supply Management – Exam 1

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Contracting and Negotiation1-A-1Prepare solicitations for competitive bids, quotations and proposals with pertinent specifications, terms and conditions.Knowledge of:1) Methods of communicating attributes of a product or

service 2) Types of solicitation/bids3) Requests for information (RFI)4) Bidder’s conferences5) General solicitation procedures and concepts6) Terms and conditions of solicitations and offers7) Bonds and other types of surety8) Problems related to the solicitation and receipt of offers

1-A-2Prepare for and develop strategies and tactics for negoti-ations, including definition of roles and responsibilities of team members.Knowledge of:1) Preparation for negotiations2) Negotiation philosophies

1-A-3 Lead/conduct/support negotiations with suppliers to obtain desired results.Knowledge of:1) Negotiation strategies and tactics2) Special considerations in conducting negotiations

1-A-4 Manage the preparation and/or issuance of contracts/pur-chase orders/agreements.Knowledge of:1) Elements of a contract2) Types of obligation documents3) Purchase orders4) Binding and nonbinding letter instruments 5) Contract/agreement types6) Purchase order confirmations and acknowledgments7) Considerations in preparing obligation documents 8) Statement or scope of work (SOW)

1-A-5 Administer contracts/purchase orders from award to completion or termination.Knowledge of:1) Contract administration concepts2) Supplier management concepts3) Conflict/dispute resolution 4) Termination options

Cost and Finance1-B-1 Prepare and/or administer a supply management department budget.Knowledge of:1) Budgeting’s relationship to the strategic and

operational plans 2) Steps in budgeting 3) Purposes for a budget4) Types of budgets

1-B-2 Develop cost management program strategies for purchases.Knowledge of:1) Cost savings2) Issues to be considered when establishing a

cost management program3) Value analysis/value engineering processes4) Cost modeling5) Standard cost setting6) Product cost roll-up7) Margins8) Contribution to profit9) Cost of poor quality10) Cost of inventory11) Intangible costs12) Total cost of ownership13) Other forms of cost management

The Foundation of Supply Management exam tests several traditional areas of concern for supply management, from a leading-edge perspective, in 165 questions. From contracting and negotiation, cost and finance, and international business, to social responsibility, sourcing and supplier relationship management each task is essential to establish a solid foundation and maintain an effective supply chain within any organization.

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1-B-3Identify savings potential and opportunities and strategies for specific categories through spend analysis.Knowledge of: 1) Sources of spend data2) Data mining tools3) Cost baseline4) Implementation processes and outcomes5) Segmentation/categorization of spend

1-B-4Perform cost/benefit analyses on acquisitions.Knowledge of: 1) Definition of total cost of ownership2) Direct costs3) Indirect costs4) Carrying costs5) Should cost6) Target cost7) Relevant versus irrelevant costs 8) Overhead9) Opportunity costs10) Financial analysis tools11) Lease/buy analysis

1-B-5Develop financing and leveraging strategies for purchases.Knowledge of: 1) Cash flow2) Interest rates 3) Payment terms4) Depreciation5) Market conditions6) Commodity markets7) Bond and currency markets8) Regulations9) Tax Laws10) Import/export quotas11) Supplier financing12) Equity investment13) Centralized buying, decentralized buying,

and hybrid buying14) Cooperative purchasing 15) Consortia

International1-C-1 Identify and assess international markets to source goods and services.Knowledge of:1) Cultural awareness2) Issues in global business3) Infrastructure4) Risk assessment5) Cost benefit and opportunity analysis

1-C-2Develop international sources of materials and services.Knowledge of:1) Research and benchmarking of potential global

suppliers2) Financial issues3) Development of a business case/plan 4) Contingency plans and exit strategies5) Country-specific governmental regulations

(for example, customs, import/export, trade agreements)

6) Brokers and import merchants7) Trade networks/trading companies 8) Logistics 9) Quality assurance and regulatory compliance

1-C-3Develop and maintain documentation regarding cross-border transactions.Knowledge of:1) Governmental regulations pertaining to restricted parties

and countries2) Customs requirements3) Broker management

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Social Responsibility1-D-1Develop and act upon a code of business conduct for the supply management function and external suppliers.Knowledge of:1) ISM Principles and Standards of Ethical Supply

Management Conduct2) ISM Principles of Sustainability and Social Responsibility3) Organizational policies4) Industry codes of conduct5) International issues6) Communication to and training for key stakeholders7) Laws governing issues in ethics8) Customer-driven requirements

1-D-2Establish and monitor environmentally responsible and com-pliant programs throughout the supply chain and life cycle.Knowledge of:1) Environmental laws and regulations 2) Risk transfer3) Ethical issues4) Auditing 5) Organization values and policies6) Purchase of recycled materials 7) Minimization of waste 8) End of life cycle

1-D-3Implement, monitor and promote organizational and supply chain safety policies and procedures.Knowledge of:1) Laws and regulations2) Policies and procedures3) Supplier and subcontractor safety (for example, safety,

history)4) Customer-driven requirements

Sourcing1-E-1Analyze potential sources of goods or services.Knowledge of:1) Supply base analysis 2) Nature of sources and their effects on procurement3) Existing versus new sources

1-E-2Evaluate competitive offerings to determine the overall best offer for a product/service.Knowledge of:1) Decision matrix/multi-attribute evaluation tool2) Receiving, controlling and analyzing offers3) Offer responsiveness 4) Technical analysis5) Operational analysis 6) Cost and price analysis7) Offeror capability/offeror responsibility8) Transportation terms9) Other factors

1-E-3Plan and communicate sourcing and supply strategies based on forecasted data.Knowledge of:1) Buying strategies2) Financial tools3) Forecasts of volume4) Factors in the selection of the method of procurement

Supplier Relationship Management1-F-1Identify opportunities and benefits for rationalizing the supply base.Knowledge of:1) Strengths, weaknesses, opportunities, threats (SWOT)

analysis 2) Data mining tools3) Supplier categories 4) Supplier segmentation

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1-F-2Develop/manage effective relationships with suppliers.Knowledge of:1) Benefits of good supplier relations2) Confidentiality policies3) Ways of promoting good relations and trust4) Issues in supplier product education and involvement5) Issues in reciprocity6) Concepts of continuous improvement7) Supplier partnerships/strategic alliances8) Reverse marketing/supplier development9) Supplier mentorship10) Early supplier involvement (ESI)11) Supply chain management12) Supply base innovation

1-F-3Develop/implement a supplier diversity program.Knowledge of:1) Rationale in developing programs2) Sources of information on socially or economically dis-

advantaged suppliers3) Independent certification of diverse suppliers4) Program elements

1-F-4Develop new supplier qualification plans and reports to assure components, materials and suppliers meet specified requirements (regulatory, safety, reliability, quality).Knowledge of:1) Customer communication/customer relationship

management (CRM)2) Supply chain mapping3) Quality systems4) Logistics systems5) Financial analysis6) Methods of requirements gathering7) Supplier evaluation measures8) Contingency plans

1-F-5Conduct supplier performance evaluations.Knowledge of:1) Factors used to analyze a supplier’s ability to

perform2) Issues in conducting site visits3) Evaluate changes within supplier organization

1-F-6Develop and execute supplier exit strategies.Knowledge of:1) Internal considerations2) External considerations3) Associated risks 4) Community concerns