Global Standard for Procurement and Supply

Current segment

Level: Tactical

Theme: Spend Management

Segment 4.1 Effective Purchasing Practice

Segment 4.1 Effective Purchasing Practice

Knowledge: Will know and understand Capabilities: Will be able to

The typical proportions of organisational costs accounted for by procurements of goods and services

Explain the importance of procurements of goods and services to the organisation

Different types of procurements such as;

  • capital and revenue purchases
  • products, services and constructional works
  • direct and indirect
  • outsourcing and insourcing

Advise internal stakeholders on the different types of purchases that will typically be contracted for by the organisation

The five rights of purchasing and definitions of value for money;

  • price/total cost
  • quality
  • time
  • quantity
  • place

Apply the 5 rights of purchasing and value for money criteria to any purchase of goods or services

Total costs of ownership (or whole life costs) criteria such as the costs involved in purchasing, ownership, usage and disposal

Explain how the purchases of goods or services can be evaluated on the basis of the total costs of ownership (or whole life costs)

The roles of procurement and supply professionals in making expenditures with suppliers

Explain the importance of spending the organisation's money with suppliers to achieve value for money outcomes

The roles of staff with devolved responsibilities for the procurement of goods and services

Identify staff with devolved responsibilities for the procurement of goods and services and explain how they can create orders and agreements with external suppliers

The main pricing methods used for the purchasing of goods or services including;

  • fixed pricing, lump sum pricing and schedule of rates
  • cost reimbursable and cost plus arrangements
  • variable pricing
  • target pricing
  • risk and reward pricing

Explain the advantages and disadvantages of a range of pricing methods and apply these in the procurement of goods and services

Data that relates to the pricing of goods or services purchased by the organisation including:

  • price changes compared to historic figures
  • margins and mark ups
  • total costs of ownership
  • Open book costing/accounting

Calculate basic financial analysis of costs and prices and use this data to negotiate with suppliers

Knowledge: Will know and understand

The typical proportions of organisational costs accounted for by procurements of goods and services

Capabilities: Will be able to

Explain the importance of procurements of goods and services to the organisation

Knowledge: Will know and understand

Different types of procurements such as;

  • capital and revenue purchases
  • products, services and constructional works
  • direct and indirect
  • outsourcing and insourcing
Capabilities: Will be able to

Advise internal stakeholders on the different types of purchases that will typically be contracted for by the organisation

Knowledge: Will know and understand

The five rights of purchasing and definitions of value for money;

  • price/total cost
  • quality
  • time
  • quantity
  • place
Capabilities: Will be able to

Apply the 5 rights of purchasing and value for money criteria to any purchase of goods or services

Knowledge: Will know and understand

Total costs of ownership (or whole life costs) criteria such as the costs involved in purchasing, ownership, usage and disposal

Capabilities: Will be able to

Explain how the purchases of goods or services can be evaluated on the basis of the total costs of ownership (or whole life costs)

Knowledge: Will know and understand

The roles of procurement and supply professionals in making expenditures with suppliers

Capabilities: Will be able to

Explain the importance of spending the organisation's money with suppliers to achieve value for money outcomes

Knowledge: Will know and understand

The roles of staff with devolved responsibilities for the procurement of goods and services

Capabilities: Will be able to

Identify staff with devolved responsibilities for the procurement of goods and services and explain how they can create orders and agreements with external suppliers

Knowledge: Will know and understand

The main pricing methods used for the purchasing of goods or services including;

  • fixed pricing, lump sum pricing and schedule of rates
  • cost reimbursable and cost plus arrangements
  • variable pricing
  • target pricing
  • risk and reward pricing
Capabilities: Will be able to

Explain the advantages and disadvantages of a range of pricing methods and apply these in the procurement of goods and services

Knowledge: Will know and understand

Data that relates to the pricing of goods or services purchased by the organisation including:

  • price changes compared to historic figures
  • margins and mark ups
  • total costs of ownership
  • Open book costing/accounting
Capabilities: Will be able to

Calculate basic financial analysis of costs and prices and use this data to negotiate with suppliers

This segment was last updated on: 3rd April 2017

The Global Standard for Procurement and Supply structure

Released in 2014 the Standard is a competency framework of procurement and supply skills, knowledge and capabilities that can be used by individuals and organisations to identity training and professional development needs at varying levels of competency.

The Global Standard for Procurement and Supply structure
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