ISM CORE Based on Real Exam Environment

The business unit conducts discussions that include category overviews, contracting executive summaries, local content spending plans, sourcing timelines, and cost management/value creation. These elements collectively describe a strategic approach to managing a specific category of spend.

Commodity segmentation refers to dividing products or services into categories based on similar characteristics.

Contracting plan outlines the approach for negotiating and establishing contracts.

Spend analysis involves examining historical spending to identify patterns and opportunities for cost savings.

Category action plan is a comprehensive approach that includes all aspects of managing a category, from market analysis to implementation strategies.

Given the scope and elements involved in the discussions described, they align best with a category action plan which encompasses category overviews, contracting summaries, and strategic planning for sourcing and cost management.

References:

Institute for Supply Management (ISM) guidelines on category management.

CIPS (Chartered Institute of Procurement & Supply) literature on category management best practices.

Understand the Acquisition Impact: Recognize the potential risks associated with Supplier A acquiring a smaller firm and possibly transferring contracts.

Protect Quality Standards: Ensuring that EFG's stringent quality requirements are met is crucial.

Consent of Assignment Clause: Adding this clause ensures that Supplier A cannot transfer the contract to another entity without EFG’s consent, maintaining control over the quality.

Negotiate Terms: Discuss and agree upon the specifics of this clause with Supplier A to safeguard EFG’s interests.

References

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.

Gattorna, J. (2015). Dynamic Supply Chains: Delivering Value Through People. Pearson.

To leverage supply contracts and make MRO supplies available to all subsidiaries efficiently and cost-effectively:

Require suppliers to provide secure ordering portals tailored to specific contracts: While secure, this approach places the burden on suppliers and may lead to inconsistencies in user experience.

Conduct train-the-trainer sessions for supply management staff at the subsidiaries: Effective for training, but not the most efficient way to provide ongoing product details.

Create internal online catalogs with ordering instructions and links to suppliers' sites: This approach centralizes information, making it easily accessible for all subsidiaries. It ensures consistency in ordering procedures and allows for efficient updates.

Email a list of suppliers' websites to contacts at each subsidiary: Simple but lacks centralization and can lead to outdated or inconsistent information.

Therefore, the most efficient and cost-effective way is to create internal online catalogs with ordering instructions and links to suppliers' sites.

References:

Supply chain management best practices on internal cataloging.

Institute for Supply Management (ISM) guidelines on centralized procurement systems.

The new accounting system implemented by the company's accounting department excludes some important indirect procurement data, leading to incomplete reports. The best course of action is to notify senior management about the potential understatement of the company's debts and assets. This ensures transparency and allows senior management to take necessary steps to address the issue, such as integrating the data from the other system or adjusting their decision-making processes accordingly.

References

Financial Accounting Standards Board (FASB). Reporting standards and guidelines.

COSO (Committee of Sponsoring Organizations of the Treadway Commission). Internal Control-Integrated Framework.