3.0 Understand the environmental factors which affect supply chain improvement and innovation

Innovation in Procurement and Supply


Module purpose

On completion of this module, learners will be able to evaluate techniques for supplier development and innovation in procurement and supply and appraise the environmental factors which should be considered when applying such methods.

Module aim(s)

In order to support organisational success procurement and supply has a significant role to play in influencing strategic suppliers to adopt innovative approaches and to continue to develop. Professional procurement and supply leaders are therefore expected to identify areas which offer the opportunity to improve and innovate and to lead and implement the associated processes. This module is designed for procurement and supply leaders who require a clear knowledge of the tools and techniques which are available to them to achieve improvement and innovation as well as an appreciation of the environmental factors which affect such initiatives.

Learning outcomes, assessment criteria and indicative content

1.0 Understand techniques for supplier development

2.0 Understand methods to achieve procurement and supply improvement and innovation

3.0 Understand the environmental factors which affect supply chain improvement and innovation

1.1 Assess cross functional working to achieve improvements in the supply chain

• Cross functional involvement in the development of

specifications and requirements

• Simultaneous (concurrent) engineering

• Product and process design

1.2 Evaluate techniques to promote the development of innovation in procurement and supply

• Collaboration with suppliers and customers to promote improvements in innovation

• Early supplier involvement

• The role of innovation councils

• Supplier forums and associations

• The use of technology transfer

• The use of data analytics to assist planning,

forecasting, control and decision making

• The use of integration tools in systems technology

1.3 Contrast the developments in technology that can be applied to promote improvements in supply chains

• Forms of e-procurement

• E-catalogues

• E-sourcing

• E-auctions

• P2P (purchase to pay) systems

• Data integrity and integration between organisations in a supply chain

• XML (extensible markup language) and the use of application programming interfaces (APIs) and other integration tools

• Developments in technology such as:

• Cloud computing

• Open-source software

• Mobile telecommunications

• Remote working

• Convergence of technology platforms

1.4 Evaluate the use of relationship assessment for supplier development

• The use of joint performance appraisal systems

• The use of relationship assessment methodologies

• The use of balanced scorecards

2.1 Evaluate where technology can be used to improve procurement and supply

• Areas such as:

• Expenditure control

• Data analytics and capture

• Systems integration with suppliers and supply chains

• Organisational systems integration to improve senior management and stakeholder knowledge and information flow

• Artificial Intelligence (AI) and predictive analysis

2.2 Evaluate tools and techniques which are available to improve procurement and supply

• Tools such as:

• Total quality approaches

• Statistical analysis

• Just-in-Time (JIT)

• Lean thinking and lean supply

• Business Process Re-engineering (BPR)


• Databases

• The use of business continuity planning to mitigate supply chain interruption

2.3 Assess methods to incentivise improvement and innovation

• Bidding

• Selection

• Contract award

• Contract management

• Setting examples and maintaining standards

3.1 Assess approaches to environmentally sensitive design

• Lifecycle analysis

• Design for disassembly

• Use environmentally friendly materials

• ISO 14001 – Environmental Standards

• ISO 20400 – Sustainable Procurement Standard

3.2 Assess the impact of green procurement on improvement and innovation

• Impact on strategic policy and planning

• Sustainable procurement

• Low carbon

• Low waste

• Water efficient

• Respect biodiversity

• International targets and agreements


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