Institute for Supply Management™ (ISM) Certification Program

Certified Purchasing Manager (C.P.M.) Examination Specifications Effective January 1, 2001
Final draft Published September, 1999

MODULE 4: MANAGEMENT

1. Management and Organization
2. Human Resources Management

Part A. Management and Organization

TASK 401: Develop strategic plans and objectives (short and long term).

Knowledge of:

1) Issues in strategic planning

1. Purchasing support for organizational strategy
2. Planning process and objectives
3. Planning time frames
4. Developing commodity plans
5. Developing contingency plans
6. Decision making
7. Profit planning
8. Periodic review
9. Advanced acquisition planning

2) Supplier strategies

3) Commodity strategies

4) Departmental strategies

TASK 402: Develop goals and objectives of a purchasing and supply department aligned to organizational goals.

Knowledge of:

1) Typical organization vision, mission, and goals statements

2) Fundamental objective of the purchasing department: To provide the highest value at optimum cost to the organization

3) Strategic goal of the purchasing department: To lead/manage supplier relationships for goods, services, and materials in support of the organization's overall mission/vision

4) Issues related to the establishment of objectives

1. Priority of objectives
2. Integration of objectives
3. Goal alignment
4. Measurability of objectives

TASK 403: Plan/develop/provide operating policies, guidelines, and procedures.

Knowledge of:

1) Nature of management control

1. Before-the-fact controls
   1.0 Budgets
   2.0 Plans
   2.1 Disaster Planning 3.0 Forecasts
   4.0 Policies/Procedures manual
2. During-the-fact controls 1.0 Quality control
3. After-the-fact controls 1.0 Audits
   2.0 Periodic reports
   3.0 Procedures reviews

2) Workload distribution

1. Commodity or class
2. Department
3. Special project
4. Volume
5. In rotation
6. Type of contract
7. Staff expertise
8. Supplier

3) Procedures for controlling purchase requests

1. Logging

1.0 Manual
2.0 Computerized

2. Location information
3. Status information

4) Relationships between policies, procedures, objectives, work instructions, and forms

5) Organization policies that affect purchasing/supply

6) Centralization versus decentralization

1. Advantages
2. Disadvantages

7) Reengineering processes

1. Order cycle
2. Direct user releases
3. Inventory
4. Invoice payment
5. In-plant stores
6. Other

8) Applicable industry standards

TASK 404: Prepare periodic reports of department activities for senior management and other areas of the organization.

Knowledge of:

1) Identification of relevant purchase activities, performance, and other information to report

2) Effective presentation techniques

1. Written
2. Oral
3. E-mail
4. Internet
5. Intranet

3) Data management techniques

4) Customer needs

1. The "language" of top management
2. Investor viewpoint
3. "Bring solutions - Not problems" approach
4. Executive overview and supporting detail

TASK 405: Analyze and resolve issues raised in purchasing and supply audit reports.

Knowledge of:

1) Measurement of change initiatives

2) Validation of current policies, procedures, work instructions, and forms

3) Conflict resolution skills

4) Non-defensive problem solving

5) Corrective action process

1. Establishment of time frames
2. Prioritization
3. Cost/benefit analysis

TASK 406: Develop/utilize criteria for evaluating purchasing and supply department performance.

Knowledge of:

1) Organizational expectations of purchasing

1. Congruence with organizational objectives
2. Congruence with supplier and customer objectives

2) Reasons for departmental (macro-level) performance appraisal

1. To determine departmental effectiveness in meeting organizational needs
2. To determine effectiveness of department management
3. To measure improvement/deterioration
4. To provide incentives for improvement
5. To determine resources needed for improvement
6. To determine if value is added to the process

3) Steps in department-level evaluation

1. Identify department objectives
2. Identify criteria for success
3. Identify appraisal factors

1.0 Contributions to profitability/success of core activity
2.0 Timeliness of actions
3.0 Material/service costs
4.0 Material/service quality
5.0 Supplier reliability
6.0 Supplier development
7.0 Order quantity and inventory effectiveness
8.0 Customer satisfaction
8.1 External customers
8.2 Internal customers
9.0 Creativity

4. Internal audits/self-governance/self-assessment
5. Process benchmarking
6. Exercising management control in response to results

4) Concepts of the purchasing department

1. Purchasing as a profit center
2. Purchasing as a cost center
3. Purchasing as an independent center

5) Evaluation of external purchasing

TASK 407: Prepare and/or administer a purchasing department/supply management budget.

Knowledge of:

1) Purposes for a budget

1. Control of expenditures
2. Preapproved funding
3. Monitoring of expenditures
4. Development of standard costs

2) Typical elements subject to budgetary control

1. Inventory
2. Wages and salaries
3. Travel
4. Occupancy/energy
5. Communications
6. Books and supplies
7. Training

3) Steps in budgeting

1. Review goals and objectives
2. Define needed resources (e.g., personnel, equipment, furnishings, training)
3. Estimate the dollar value of resources
4. Develop standard purchase costs
5. Present the budget/obtain the appropriation
6. Variance analysis

4) Types of budgets

1. Zero-based budgets
2. Cash-flow budgets
3. Line item
4. Program/project
5. Capital
6. Flexible
7. Purchase price variance
8. Open-to-Buy (OTB)

TASK 408: Design, modify, and/or manage operational forms (paper and/or electronic).

Knowledge of:

1) Reasons for forms

1. Communication
2. Operational control
3. Records
4. Consistency of approach
5. Legal requirements

2) Types of forms and communication formats used by purchasing

1. Purchase requisition
2. Traveling requisition
3. Bill of materials
4. Purchase order/contract
5. Receiving documents
6. Inspection documents
7. Change orders
8. Material return form
9. Nonconformance form
10. Statement of work
11. Check request form
12. Evaluation forms (e.g., supplier evaluation)
13. Capital equipment justification form
14. Other

3) Elements of form design/management

1. Available media
2. Organization of information
3. Instructions
4. Forms control
5. Retention periods
6. Privacy Act/public information implications
7. Cost implications
8. Printed versus electronic generated
9. Compatibility with equipment
10. Periodic review

Part B. Human Resources Management

TASK 409: Supervise and lead purchasing/supply staff.

Knowledge of:

1) Issues in organizational management and administration

1. Delegation of authority and responsibility
2. Chain of command
3. Span of control/span of information dissemination
4. Line and staff relationships
1.0 "Flat" organizations
5. Management By Objectives (MBO)
6. Continuous improvement
7. Rightsizing/workload
1.0 Outsourcing of purchasing
2.0 Staff productivity
8. Process reengineering
9. Quality improvement
10. Diversity in the workplace
11. Incentive programs
12. Matrix organizations

2) Theories of management

1. Universal theories
2. Operational theories
3. Behavioral theories
4. Systems theories
5. Contingency theories
6. Styles
1.0 Subordinate centered
2.0 Supervisor centered
3.0 Self-directed workgroup
7. Empowerment

3) Topics in group dynamics

1. Formal work groups
2. Informal work groups
3. Group characteristics
4. Advantages/disadvantages
5. Group leadership

TASK 410: Hire, promote, and/or dismiss purchasing/supply personnel.

Knowledge of:

1) Issues in selection and recruitment

1. Position requirements
2. Knowledge, skills, and attitudes of applicants
3. References, experience, and training
4. Questions in the interview process
5. Organizational hiring and human resource policies

2) Issues in employee promotion

1. Standards/certification
2. Career advancement
3. Advantages/disadvantages of promoting within
4. Advantages/disadvantages of recruiting/hiring outside employees
5. Training needs
6. Succession planning
7. Goal attainment

3) Issues in the termination of employees

1. Consistent documentation/evaluation
2. Adherence to established personnel policies/procedures/union requirements/due process
3. Quantifying/qualifying discussion to terminate employees
4. Outplacement
5. Exit interviews

4) Legal

TASK 411: Evaluate purchasing/supply staff performance.

Knowledge of:

1) Issues in the evaluation of employees

1. Determine employee objectives
2. Determine criteria for success
3. Determine appraisal factors 1.0 Quantitative factors
   2.0 Qualitative factors
4. Conduct interviews/give feedback
5. Team and/or peer input
6. Self-assessment
7. Employee accountability
8. Internal customer input
9. Supplier input

2) Uses of performance appraisal data

1. Compensation
2. Promotion
3. Personal/career development
4. Employee morale
5. Disciplinary action
6. Employee recognition
7. Improvement of performance

TASK 412: Conduct/authorize job training for the development of the professional competence of the staff.

Knowledge of:

1) Determination of training and development needs

1. Skills assessment
2. Gap analysis
3. Designing and planning training programs

2) Types of initial job training (functional orientation)

1. Orientation
2. Learning by doing
3. Sponsor/mentor system
4. Classroom training
5. Functional rotation

3) Types of continuous professional development

1. Job rotation
2. On-the-job training
3. Self training
4. Management development training
5. Apprenticeship training
6. Formal/classroom training programs
7. Continuing educational offerings
8. Site visits to organizations/suppliers
9. Audio/videotapes
10. Books/publications
11. Peer-to-peer
12. Experiential learning
13. Job analysis/Diagnostic evaluation (e.g., FOCUS)
14. Computer-based training
15. Interactive training
16. Competency-based training

4) Professional certification

5) Formal education/advanced degrees

6) Professional association involvement

TASK 413: Resolve employee performance problems.

Knowledge of:

1) Issues in employee nonperformance

1. Corrective action process

1.0 Notice of problem
2.0 Effort to identify the problem
3.0 Effort to resolve problem
4.0 Monitoring progress
2. Types of issues
   1.0 Performance problems
   2.0 Attitude, stress, burn-out
   3.0 Theft
   4.0 Substance abuse
   5.0 Ethical violations
   6.0 Attendance
   7.0 Legality other than theft
3. Documentation
4. Collective bargaining requirements
5. Employee assistance programs
   1.0 Retraining

TASK 414: Implement programs to prevent and respond to discrimination or harassment.

Knowledge of:

1) Equal Employment Opportunity laws and regulations

2) Affirmative Action

3) Americans with Disabilities Act

4) Court rulings pertaining to employment discrimination

5) Sexual harassment

1. Definitions
2. Procedures

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