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CIPS L5M5 Exam Syllabus Topics:| Topic | Details | | Topic 1 | - Understand the importance of compliance with ESG (Environmental, Social, and Governance) factors to achieve ethical and sustainable procurement and supply arrangements: This section of the exam measures skills of Supply Chain Specialists and covers methods to ensure compliance with ESG standards in procurement. It includes the use of supply chain mapping, risk management, stakeholder engagement, and contractual terms to secure sustainable practices. Candidates also learn how to monitor supplier performance, handle non-compliance, and utilize third-party auditors to maintain ethical standards. Relationship management strategies, corrective actions, and escalation processes are emphasized as part of ensuring suppliers meet ESG expectations.
| | Topic 2 | - Understand initiatives and standards related to ESG (Environmental, Social, and Governance) that support ethical and sustainable procurement and supply: This section of the exam measures the skills of Procurement Leaders and covers the global frameworks and standards that shape ethical supply practices. It explores international labour standards set by organizations such as the UN and ILO, and labour codes like the Ethical Trading Initiative and SA800. Candidates also examine external environmental frameworks, industry accreditations, and their role in meeting ESG goals. Finally, this section addresses fair trade principles, organizations such as WFTO and Fairtrade International, and the need to align internal governance with global standards.
| | Topic 3 | - Understand the impact of ESG (Environmental, Social, and Governance) considerations on ethical and sustainable supply chains: This section of the exam measures the skills of Procurement Managers and covers how ESG principles are applied to secure ethical and sustainable supply chains. It looks at the role of environmental, social, and governance factors in procurement decisions, alongside risks and benefits of ESG adoption. Learners also explore issues such as modern slavery, bribery, and human rights, as well as the importance of diversity, inclusion, and stakeholder management. The section highlights how globalization, culture, and labour practices shape supply strategies and examines potential conflicts that may arise when balancing ESG priorities with business demands.
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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q51-Q56):NEW QUESTION # 51
The ILO's fundamental principles and rights at work are binding on which countries?
- A. Only countries with high labor standards
- B. All member states of the ILO
- C. Only those that have ratified the ILO conventions
- D. Only developed countries
Answer: B
Explanation:
Choice B- This is the correct answer. The International Labor Organization (ILO) requires all member states to uphold its fundamental principles and rights at work, even if they have not ratified the specific conventions associated with these principles. These fundamental principles are part of the ILO Declaration on Fundamental Principles and Rights at Work (1998), which includes:
Freedom of association and the right to collective bargaining.
Elimination of forced or compulsory labor.
Abolition of child labor.
Elimination of discrimination in respect of employment and occupation.
When a country joins the ILO, it automatically accepts an obligation to respect, promote, and realize these fundamental principles, regardless of whether it has formally ratified the associated conventions. This reflects the ILO's commitment to promoting universal labor standards and protecting workers' rights globally.
Incorrect answer:
Choice A- This is incorrect because the fundamental principles apply to all member states, not just those that ratified specific conventions.
Choice C- The principles are universal and apply to all member states, regardless of economic status.
Choice D- Even countries with weak labor standards are obligated to promote these principles as ILO members. So, this is not the answer.
Reference:
LO-3.1; Page 248-249; Standards set by the United Nations (UN) and the International Labor Organization (ILO)
NEW QUESTION # 52
Which of the following best demonstrates how implementing ISO standards can result in direct cost savings?
- A. Artificial intelligence for predictive customer behavior analysis
- B. Cloud-based document management systems for paperless operations
- C. Gaining new customers by showcasing compliance with international standards
- D. Enhancing brand image and reputation in the global market
Answer: B
Explanation:
Option D- This is the correct answer, as cloud-based document storage systems reduce paper, printing, and storage costs. ISO standards often encourage sustainable practices like digitizing documents, which directly saves on operational costs related to printing and paper use.
Incorrect answer:
Option A- While AI can improve business efficiency and decision-making, it is more focused on optimizing customer engagement and marketing strategies. It does not directly lead to cost savings.
Option B- Improving brand image is a long-term strategic benefit but does not directly reduce costs. It may contribute to business growth but not immediate cost savings.
Option C- ISO certification can attract new customers and boost business credibility, but this is more about increasing revenue rather than reducing costs.
Reference:
LO-3.2; Page 277-278; The benefits and challenges of independent standards in securing ESG objectives in ethical and sustainable procurement and supply arrangements
NEW QUESTION # 53
While low-cost country sourcing can provide substantial cost savings for buyers, it also comes with significant risks. Which of the following should be avoided as a potential target for low-cost country sourcing?
- A. A country where companies use Just in Time (JIT) method of SCM
- B. A country that is remote geographically but with good transportation routes
- C. A country with stable tax and tariff structures
- D. A country consisting of workers with detailed knowledge of the product
Answer: A
Explanation:
Choice B-It is important to calculate the potential cost of a supplier failing to meet the level of service timeline. If a company uses JIT methods of supply chain management, then LCCS is not a suitable option especially for critical components because delivery delays can be costly and disruptive. Without backup inventory, customers may have to wait for the company to receive supplies and manufacture the product. Thus is the correct answer.
Incorrect answer:
Choice A- A country with good transportation routes is critical to analyse as shipping will be fairly economical. Therefore is a potential target for LCCS.
Choice C- Level of education and skills of workers in chosen low cost country will help in producing vital key components as they will specialize in them. Thus this country should be a potential target of LCCS.
Choice D- Tariffs and taxes can significantly impact the cost-effectiveness of sourcing from low-cost countries. Understanding the export taxation in the source country and import tariffs in one's own country is crucial. This being stable can help in calculating and making a decision of selecting a country for low cost sourcing.
Reference:
LO-1.2; Page 76; Low-cost country sourcing
NEW QUESTION # 54
What types of organisations is the UN Global Compact aimed at?
- A. Businesses
- B. Governments
- C. NGOs
- D. Charities
Answer: A
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The UN Global Compact is primarily aimed at businesses. The L5M5 study guide (p.258) clarifies that while NGOs and other organisations can engage, the Compact is designed to encourage corporate responsibility in human rights, labour, environment, and anti-corruption. Since 2003, cities and public sector organisations can also join under different frameworks, but businesses remain the main focus. For procurement, this means suppliers aligned with the UN Global Compact are more likely to demonstrate compliance with global ethical standards.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.258
NEW QUESTION # 55
Alphacom Corporation seeks to enhance its competitive advantage through global sourcing. Which of the following strategies would best contribute to this goal?
- A. Investing in automated technologies to replace local labor
- B. Centralizing all procurement decisions at the headquarters to streamline processes
- C. Establishing partnerships with local suppliers to enhance supply chain responsiveness
- D. Hiring additional staff to manage remote sourcing operations
Answer: C
Explanation:
Choice B - This option is the correct answer, as it emphasizes the value of strong local relationships. Local suppliers can provide faster delivery times, better understanding of regional market needs, and flexibility in adapting to changes, all of which enhance competitiveness..
Incorrect answer:
Choice C- Centralizing procurement can lead to efficiency but may overlook the benefits of local insights and responsiveness. This approach might result in a lack of adaptability to local market conditions, which can hinder competitive advantage.
Choice D- Although automation can increase efficiency and lower production costs, it may reduce the ability to quickly adapt to changes in consumer preferences or market conditions. It also removes the local insight that human suppliers can provide, potentially leading to a disconnect from customer needs.
Reference:
LO-1.2; Page 69; Competitive advantage through global sourcing
NEW QUESTION # 56
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