CPSM Blog

Take the CPSM Diagnostic test before the exam

I owe it to my CAPM friends who told me to take the diagnostic exam before the CPSM. At that time the CPSM diagnostic test was not ready so Bruce Caldwell (then CPM now also CPSM ) was so kind as to drop off his old copy of the CPM diagnostic test. Thanks Bruce !

Before I got hold of the CPM diagnostic I was really going through the 3 books - reading a section and putting out a blog post in this blog (at least this blog was more regular). Once I took the CPM diagnostic - I immediately got to know exam topics where I needed to strengthen my studies.

The only problem was that the CPM syllabus and approach was limited and the CPSM was more like an MBA or GRE (Advanced)/GMAT  type of test in the broader supply management domain. In any case, the CPM diagnostic kit was invaluable.

Today, even if you have spent years in supply management and have read all the material I would strongly advise you to take the CPSM diagnostic test which is now available. Take the diagnostic test exactly as per the time allowed so that you get a real feel of the exam and take it ahead of the real thing so that you have time to review stuff that you need to strengthen. Check the ISM Website for more details here.

Controls and Business Continuity

Once you have a formal plan - this section is about keeping that plan on track. Controls can be before the fact, during or after the fact. For Example:

• Before the fact  you might have a target of reducing inventory of raw material by 20% through better co-ordination with production planning and the sales forecast in one year.
• During the fact (CPM Bridge Exam takers - note that "during the fact" is  what you need to know),  to keep this plan on track you might want to keep track two types of metrics, one inside the organization like variations in sales forecast and outside as to how the supplier delivery contract and transportation changes are being implemented. Maybe, the supplier is working on a nearer warehouse to cut delivery time and you are keeping track of progress on this metric on a fortnightly basis.
• After the fact when budgets and performance is being reviewed at the annual review meeting you are looking good if you have met or exceeded the 20% reduction of inventory target.

The other recent (also bridge exam) topic is about business continuity. Supply management plans must have continuity provisions. Have you addressed what happens if there is a power outage in a business process suppliers' organization? Do they have a generator? Or a second facility at a different place. Typically, supply managers need to have more than one supplier for both bottleneck and critical items like technology no matter how good the primary supplier is.

Strategic Supply Management for market conditions,business needs and available resources

This one is also an entire bridge exam topic that CPM's must take for the CPSM and is an example of how the CPSM pushes the "Board" (read "C" suite) for supply management. For example,instead of just "gloom and doom" in the current recession it charges supply managers to think about reviewing the strategic situation with respect to their function. Thus, if working capital is suddenly short and banks are not lending then is your plan agile enough? Are you able to put every buyer on trying to re-negotiate contracts for both quantities and payment terms making sure that suppliers don't collapse and supplies don't suffer. In other words:

• is your plan flexible?
• is it execution oriented?
• and is the plan being monitored ? -to deal with whatever is happening in the market, in your business within whatever resources you have

Elements of the operating plan include forecasts,budgets,staffing and metrics measuring how well you are doing. Examples of cost effectiveness metrics include cost changes and cost avoidance. If for instance you can line up your supplier to supply only when you have an order you have avoided both the inventory holding cost and the uncertainty of an order that will actually use the inventory.

The link between corporate plans,business plans and profit goals

Here is a section that the "leader" in you should enjoy. It explains how corporate goals need to mesh with business plans and operational tactics. These days budget cuts are being announced all around. While lay-offs form part of the action organizations are taking (the purview of HR) - Supply Management is being asked to help with reaching the targeted budget cut rate. The organizational budget cut is the corporate goal while a less expensive outsourcing contract is an example of an operational goal. Thinking through some of these things in your own organization and asking questions like:

• What are some of our company's goals?
• What is supply management doing to help achieve these goals?
• Can we measure supply managements' contribution qualitatively and quantitatively?

will help you understand the key message of this section.

You "represent" the supply profession in your organization

The important point to understand in this section (3-A-1 also in the Bridge Exam) is that as a supply management professional you represent the profession in your organization. The more you are able to create,project and expand the role of supply management- the more will be the respect for the profession in your organization.

A first step towards this is to have a Supply Management Department mission that is closely aligned to the mission of the organization. A good example is from South West Airlines.

This section also explores the need for supply managers to lead by being pro-active. The pro-activeness involves being alert to the needs and requirements of both your "internal" customers and also being aware of trends with "external" customers of your organization. Simply waiting for requirements is not enough - you need to reach out to internal users. If you do, you will be well regarded and will avoid situations where users by-pass supply management and simply buy on their own. The latter is called "backdoor buying".

Leadership in Supply Management

Once I starting going through the posts in this blog - I realized that I actually had the most detailed content for Exam 1 (Foundations of Supply Management) where I had written on each sub-content area. So you'll see 1A-1 and so on. For the content of Exam 2 I have broad coverage of each content area like (2A-) but not the sub content area. That's when I guess I was running short of time! Finally, there are no postings on Exam 3 content.

It's kind of an interesting coincidence that I figured this out on President's day which sets a kind of nice tone to the whole question of leadership.

Given our rather difficult times this content is particularly important for all supply managers - whether or not they are taking the CPSM exam. This portion covers three broad sections Leadership ( From 3-A-1 to 3-A-18), Risk and Compliance (from 3-B-1 to 3-B-8) and Strategic Sourcing (3-C-1 to 3-C-6).

Naturally, these are topics you'll see that the CPO is interested in because the CEO and Board are interested as well. You'll also see lots of seminars/workshops on these topics in the programming of your local ISM affiliate or the national ISM events. Let's get a sense of what the content is of these topics and hope you will be able to connect the concept to your own organization and thereby get your arms around each concept. Once you do this, the exam questions will be fairly easy to deal with....

Increased interest in the CPSM exam- need to improve reading comprehension skills

I have not been writing on this blog for a while but given the increasing interest in the CPSM - I thought I should re-start posting more regularly on this blog. I find that many people check this blog as they want to find out more about the CPSM exam and look for ways to better prepare for it.

Generally, as you can see from the posts in this blog I was very regular with the Exam I topics and generally slowed down (ran out of time before the exam !) with Exam 2 and 3. I think I will start with topics of the Exam 2 but first a quick bit of advise for prepping for the exam.

For those of you, who have done a case based degree like MBA's that have lots of case studies - you need to brush up your (quick) reading skills. If you can read small cases fast and understand the issues quickly, you'll at least be able to deal with the questions. That is, quick reading is a primary requirement. If you have kids with SAT and GRE/GMAT prep guides - no harm in trying out the comprehension passages and questions in some of these guides. Maybe your kids will wonder but this will help your general reading comprehension skills ! More on the subject matter of the
exam on  a more regular basis..

So how was the CPSM Pilot Exam ?

At the CAPM Forum ( which was great ) last Wednesday several folks were interested in knowing about the CPSM Exam and more importantly how one can prepare for it. This post includes feedback I received from folks who have taken the CPM in the past and now took the CPSM. Here goes:

• The CPSM is a far more advanced exam than the CPM.
• It tests you for not only your reading of the material, but your experience and job knowledge on the strategy front.
• It is your ability to think about the strategic aspects particularly the "whys?" of your function and the related functions covered in the syllabus.

A good way to prepare for the CPSM is to be more thoughtful as you go about your daily work. For example, think about "why's" in not only your function (say procurement) but related functions like logistics,innovation,technology and the other syllabus topics. Thus avoid a "tunnel" vision about your job role and think about how the other parts of the supply function work and how they all fit together in your corporation. Another very important part is to attend the workshops and seminars that come your way because they tend to be on the cutting edge or "bridge" elements of the exam and normally  explore the
strategic "why's" beyond the "how's" of various topics.

Quality Management fundamentals for supply management

Quite simply the supply manager wants to ensure that the product or service delivered is as per user requisition,contract and terms. One approach to achieve this is the inspection of every piece delivered or alternatively a supply source that is so good that there is no need of quality assurance. In between these two extremes are a variety of suppliers and a whole function of quality management including TQM and Quality Tools like Pareto charts ,Ishikawa (cause effect ) diagrams. Matters become more interesting when service quality has to be managed. The starting point of service quality is a service level agreement (SLA); for example it must be decided in advance that a service call will be responded to within the same day or the next day.

The Quality section is the last section in the Effective Supply Management ( Part 2) of the CPSM.

Project Management for Supply Managers

Project management is big for supply managers because either you are doing a project within the department (eg. supplier rationalization) or you are part of an organizational project ( like a New Product Development project) where you are expected get suppliers on board.

In any event project management is a hot topic in supply management with PMI being the main source of expertise in the field.