CPSM Blog

Preventing and responding to discrimination or harassment in the supply management department

This section (3-B-8)  puts you in a Supply Management leader's role and asks you to think about issues of discrimination and harassment of co-workers. The important thing is that here you are not thinking about Supplier Diversity which is covered elsewhere in Exam 1 (1-F-3, 1-E-2, 1-D-1) and Exam 2 (2-D-3). Keep in mind that section 3-A-13 introduces the concept of diversity in the workplace but this particular segment of Exam 3 i.e. 3 B is about compliance - viz . if you are the CPO or Chief Supply Officer are you compliant with laws and rules pertaining to discrimination and harassment?

The laws can be US ones like:

1. Equal Pay Act of 1963 which asks you to ensure that for the same work using the same skills you should be paying the same. For example,  there was the class action lawsuit by women employees of Walmart followed by individual lawsuits. Could this have been prevented early on by better leadership  ?
2. Federal Civil Rights Act of 1964   particularly Title VII prevents discrimination against employees on the basis of race,religion,color,sex or national origin.
3. Executive order 11246 of 1965 prevents employment discrimination if you are a federal contractor. 
4. Age Discrimination 1967  This one is strange  because all of us will be old - one day. However, the relatively younger colleagues tend to be more technically competent and older colleagues get discriminated. Perhaps training older workers is away to prevent this kind of discrimination.
5. Equal Employment Opportunity Act (EEOA 1972)  is something you see in job ads. The purpose is to have an  employee  mix that reflects the community population mix. And the EEO Commission can directly file lawsuits against organizations that violate EEO. 
6. National Labor Relations Act or Collective Bargaining or Taft-Hartley allows individuals to organize and bargain effectively. 
7. OSHA is also featured in this section. Again the logic is are you compliant with OSHA in the supply management departmet? 
8. Americans With Disabilities Act prevents discrimination in employment for disabled candidates.
9. Although USERRA is not mentioned in the study guide it's a good idea to become familiar with the need to hire qualified veterans into supply management positions. 

Sexual harassment and diversity training are other important topics in this section. In general, you would have had your HR folks arrange training on these topics. Its a great idea to sign up- particularly for the online training in these topics. Apart from acing this section in the CPSM - you'll find that you'll learn nuances about what type of behaviors are appropriate and what are not, given the increasing complexity in this topic in the modern workplace.

Choosing between negotiating and competitive bidding

This last task(1-E-3) within the Sourcing section deals among other things (like  buying strategies including spot buying , JIT and forecasting) the perennial sourcing question of when do you negotiate and when do you try getting competitive bids. Here is an overview:

You do competitive bids when there are a large number of suppliers,the purchased products are manufactured to the same industrial standards,adequate time is available for the bidding process,dollar value is high,when specifications are very clear to buyer and potential sellers,when fixed price contracts are involved - in contrast to cost reimbursable contracts,considerations of the modified Kraljic risk-value matrix,if your external customers have enough lead times for the purchased product and do not specify suppliers,high flexibility on quantity-variety-timing from supply manager perspective.

All reverse conditions to the above call for negotiations with either existing suppliers or competent suppliers you can immediately find.

One exclusion from all of this is small value frequent purchases that can be handled through P-Cards or  blanket contracts based on I guess some form of competitive bid.

Decision matrix,supplier diversity,business continuity and information security

I was rather impressed with the bridge exam portions of this task (1-E-2). For one it gets into decision matrix development after you receive bids. It also discusses how important it is to check out the business continuity plans of the supplier being distinct from disaster recovery plans. But the really fine point is that you need to ask specifically about the specific information security arrangements the supplier has in place. In particular, if an employee of the supplier leaves, what is the process of eliminating access to the IT network or the process of access revocation. Very interesting because this kind of employee attrition happens all the time with overseas suppliers......

Who do you source from?- Existing versus new suppliers

Analysis of the supply base can reveal important action possibilities including understanding the nature of the market in the particular category.

Existing versus new suppliers is a complex decision and includes no less than thirteen different considerations including urgency,long-term relationships,supply base optimization  and Internet based searches.

Several other sections speak in more detail to these considerations, central to the Foundations of supply management.