cpsmexams

CPSM

Exam 1, 2, 3 & Bridge - Review

Steve Lunden, M.B.A., CPSM, C.P.M. Director of University Purchasing

Gonzaga University

The Mission of ISM is to Lead Supply Management

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But first some background,

ISM undertook an enormous task in

developing a new qualification — the

Certified Professional in Supply Management

(CPSM).

Supports the conclusions was that

pronounced changes in the field demand that

the new qualification reflect higher skill levels

across the entire spectrum of supply

management.

Strategic Imperatives 1. ISM is the thought leader that attracts and engages supply

management professionals and others impacted by the profession.

2. ISM is an essential component of individual supply management professionals in excelling and advancing in their careers.

3. Certified Professional in Supply Management (CPSM) is recognized as THE essential qualification required to succeed as a supply management professional.

4. ISM expands its international influence.

5. ISM controls essential expertise.

6. ISM is organized to be flexible and responsive to achieve excellence and to promote organizational values and value.

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Definition of Supply Management

The identification, acquisition, access,

positioning, management of resources and

related capabilities the organization needs

or potentially needs in the attainment of its

strategic objectives

ISM developed and maintains this official

definition of supply management and a list

of supply management components.

The supply management component is either part of the individual’s personal job responsibilities and/or supervisory responsibilities or the responsibility of someone else in the supply management organization.

Components Survey Results

34%

63%63%

69%71%74%75%

79%81%81%83%83%

98%99%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pur

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Procu

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Stra

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Logistics

Qua

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Inve

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Mat

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anag

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Trans

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Traffic/Shipp

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Dispo

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using

Distri

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Pac

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Pro

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Dev

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Man

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Supply Management Components

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Why the CPSM Program Was Developed

•Profession has changed:

•Scope and globalization of supply management will grow

•Supplier relationships deepen

•The CPO becomes a strategic partner to the Board

•Technology continues to be central to change

•CPSM addresses these changing skills

•CPSM will be the standard for all professionals in

supply management, and the most rigorous qualification in

the field

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The CPSM

CPSM® Eligibility:

Three years of full-time, professional supply management

experience (nonclerical, nonsupport) with a bachelor's

degree from regionally accredited institution or international

equivalent

OR

Five years of full-time, professional supply management

experience (nonclerical, nonsupport) without a qualified

bachelor's degree

AND

Successfully pass three CPSM® Exams, OR, if you are a

C.P.M. in good standing, pass the Bridge Exam

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CPSM- Additional Information

Educational degrees beyond Bachelors do

not reduce requirements

No grandfathering from C.P.M. to CPSM

You must take the bridge exam

Or ALL Three of the CPSM exams

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CPSM Recertification Requirements

Every three (3) years with 60 Continuing

Education Hours (CEHs)

Categories for earning CEHs – college courses

& seminars (taken or taught), contributions to

the profession, articles.

Candidates will be able to retake each CPSM

Exam for 20 CEHs but only in their last year of

certification or during their grace period.

One Year Grace period – resets certification

date

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CPSM Study Materials

CPSM Study Guide

ISM Professional Series (3 volumes)

Bridge exam material is noted in the 3 volumes

CPSM Supplementary Reading List

CPSM Diagnostic Kit

The Supply Management Handbook

ISM Glossary of Key Supply Management Terms

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CPSM Exam Study Materials

Study Guide

$79 member, $119 nonmember

Three book ISM Professional Series Individual Volumes $99 member,

$139 nonmember

Set of Three (Discount) $219 member,

$329 nonmember

Other diagnostic materials available (refer

to www.ism.ws for most current info)

http://www.ism.ws/

CPSM Exams

Three Exams:

1) Foundations of Supply Management

2) Effective Supply Management Performance

3) Leadership in Supply Management

Bridge Exam for current C.P.M.s

One exam covering all content

Note: Last day to register for the CPSM® Bridge Exam is

December 31, 2014. Last day to take the CPSM® Bridge Exam

is December 31, 2015.

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What do the CPSM Exams look like?

Number of questions & time allowed (domestic)

Exam 1 – 165 questions (150 scored)

2 hours and 45 minutes allowed


2 hours and 45 minutes allowed


3 hours allowed

Bridge – 180 questions (180 scored)

3 hours allowed

Exam Scores are valid for three years.

Exam Characteristics

Criterion-referenced test:

- Determines if candidate is/is not qualified in the area in which the candidate is being tested

- Compares examinee’s scores to predetermined passing (or “cut”) scores

- If score is at or above the passing score, the person passes the test. If the person’s score is below the passing score, the person fails the test.

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Exam Characteristics

Exam:

- Does not indicate how “good” a supply management professional is or will be

- Does not indicate whether one candidate is a better supply management professional than another candidate

- Not designed to rank candidates against each other

- Indicates whether candidate has met the standards set by ISM for receiving the CPSM designation

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Scoring, Equating and Scaling

- Questions used in the exam are continually being updated.

- Level of difficulty will vary slightly between different exam forms.

- Test equating, a statistical procedure, is used to correct for differences in test form difficulty.

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Retaking an exam:

- There is a minimum of a 30-day waiting period before you can retake the same exam.

- This is to allow the candidate time to review and study.

- The waiting period also ensures additional layers of security.

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Scaling used to maintain consistency in test scoring

- Scaled score is NOT a percentage

Scaling converts all scores to a scale ranging from 100 to 600, with passing score at 400.

- Scores are reported as scaled scores in increments of 10.

- If scaled score on an exam is between 100 and 390, exam was failed.

- If scaled score is between 400 and 600, exam was passed.

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CPSM Exam 1

Foundation of Supply Management

25 Tasks or Component Areas

Total Questions 165 (150 +15)

150 scored + 15 try-out (unscored)

165 minutes to complete

Exam 1

Section A - Contracting/Negotiations Questions

Task 1-A-1 Competitive bids, quotations and proposals. 6

Task 1-A-2 Strategies and tactics for negotiations. 8

Task 1-A-3 Lead/conduct/support negotiations. 8

Task 1-A-4 Manage the preparation of contracts/purchase 6 orders/agreements.

Task 1-A-5 Administer contracts/purchase orders. 4

Total 32

Exam 1 Section B – Cost and Finance Questions

Task 1-B-1 Prepare and/or administer a supply management 5

department budget.

Task 1-B-2 Develop cost management program strategies for 6

purchases.

Task 1-B-3 Identify savings potential for specific categories through 7

spend analysis.

Task 1-B-4 Perform cost/benefit analyses on acquisitions. 8

Task 1-B-5 Develop financing and leveraging strategies for purchases. 6

Total 32

Exam 1 Section C – International

Questions

Task 1-C-1 Identify and assess international markets for 7

goods and services.

Task 1-C-2 Develop international sources of materials 6

and services.

Task 1-C-3 Develop and maintain documentation regarding 4

cross-border transactions.

Total 17

Exam 1 Section D – Social Responsibility

Questions

Task 1-D-1 Develop and act upon a code of business 5

conduct.

Task 1-D-2 Establish and monitor environmentally 5

responsible programs.

Task 1-D-3 Implement, monitor and promote supply 4

chain safety policies & procedures.

Total 14

Exam 1 Section E – Sourcing

Questions

Task 1-E-1 Analyze potential sources of goods or services. 6

Task 1-E-2 Evaluate competitive offerings to determine the 7

overall best offer.

Task 1-E-3 Plan and communicate sourcing and supply 7

strategies based on forecasted data.

Total 20

Exam 1 Section F – Supplier Relationship Management

Questions Task 1-F-1 Identify opportunities and benefits for rationalizing the 6

supply base.

Task 1-F-2 Develop/manage effective relationships with suppliers. 8

Task 1-F-3 Develop/implement a supplier diversity program. 5

Task 1-F-4 Develop new supplier qualification plans and reports. 6

Task 1-F-5 Conduct supplier performance evaluations. 6

Task 1-F-6 Develop and execute supplier exit strategies. 4

Total 35

Exam 1 Sample Practice Question 1

Which of the following BEST defines certification classification for Minority

Business Enterprises (MBE)?

(A) Social demographics of the buying company

(B) Ethnic percentage of the supplier employees

(C) 51% owned and controlled by one or more socially and economically

disadvantaged individuals

(D) 51% women owned and controlled

Task 1-F-3

Exam 1 Sample Practice Question 1 Answer

Which of the following BEST defines certification classification for Minority

Business Enterprises (MBE)?

(A) Social demographics of the buying company

(B) Ethnic percentage of the supplier employees

(C) 51% owned and controlled by one or more socially and

economically disadvantaged individuals

(D) 51% women owned and controlled


Option (C) is correct because the national certification

organizations define MBE as 51% owned and controlled by one or

more socially and economically disadvantaged individuals.

Option (A) is incorrect because MBE refers to the certification of the

supplier ownership and control.

Option (B) is incorrect because certification is not based on the

ethnicity of the supplier’s employees.

Option (D) is incorrect because an MBE is defined as an ethnic

minority.


A supply professional is seeking competitive bids on 700 standard parts. Comparing bids on a part-by-part basis will be very time-consuming, and the supply professional feels the effort would not be a good use of time. Which of the following would be the LEAST appropriate method to utilize?

(A) Use a reverse auction.

(B) Solicit bids via e-commerce.

(C) Implement a lotting strategy.

(D) Solicit pricing for 150 random parts and base decision on that data.


D.) Solicit pricing for 150 random parts and base decision on that data. Option (D) is correct because this approach does not provide the buyer with ample, empirical data on which to make decisions.

Options (A), (B) and (C) are all valid strategies for bidding

a large number of items. Note that e-commerce is not

illogical because e-commerce is a delivery method and

can be used in conjunction with lotting.

Exam 2 Section A – Forecasting

Questions

Task 2-A-1 Provide data on current and future and 6

global/domestic market conditions.

Task 2-A-2 Develop supply forecasts. 7

Task 2-A-3 Manage forecasted data with suppliers. 6

Total 19

Exam 2 Section B – Logistics Questions

Task 2-B-1 Design/modify logistics facility layouts. 4

Task 2-B-2 Direct traffic/distribution policies and 5

procedures.

Task 2-B-3 Manage international transportation, invoicing 5

and documentation functions.

Task 2-B-4 Manage the resolution of delivery/receiving 5

problems.

Total 19

Exam 2 Section C – Materials and Inventory Management

Questions

Task 2-C-1 Develop/implement a material and/or service 6

standardization program.

Task 2-C-2 Develop/implement a warehouse and inventory 4

management system.

Task 2-C-3 Coordinate and/or monitor the movement of 4

equipment and assets.

Task 2-C-4 Develop, oversee and execute disposition plan for 5

excess inventory.

Total 19

Exam 2 Section D – Organizational/Department Assessment Questions

Task 2-D-1 Monitor work against business plans and 7

adjust plans as appropriate.

Task 2-D-2 Develop performance criteria and evaluate 6

supply management staff performance.

Task 2-D-3 Develop tools to measure, report and improve 7 compliance with supply management policies.

Task 2-D-4 Analyze and resolve issues raised in supply 6 management audit reports.

Total 26

Exam 2 Section E – Planning

Questions

Task 2-E-1 Implement or utilize requirements planning. 8

(xRP - ERP, MRP, MRP II, DRP, DRP II)

Task 2-E-2 Develop, implement, and monitor the forecasting, 7

scheduling and inventory control functions.

Total 15

Exam 2 Section F – Product and Service Development

Questions

Task 2-F-1 Participate in product/service development or 6

specification/requirement changes.

Task 2-F-2 Manage ramp-up strategy and implementation 6

to full-scale production.

Total 12

Exam 2 Section G – Project Management

Questions

Task 2-G-1 Perform project management activities 9

representing the supply management

organization.

Task 2-G-2 Implement a continuous improvement process 10

within the supply chain.

Total 19

Exam 2 Section H – Quality

Questions

Task 2-H-1 Develop and administer a supplier certification 6

program.

Task 2-H-2 Develop measurements for continuous quality 8

improvement.

Task 2-H-3 Develop, measure and evaluate quality to 7

improve supplier performance.

Total 21


When developing Key Performance Indicators (KPIs) for the purchasing

department, all of the following should be considered EXCEPT:

(A) The organization’s goals and mission statement

(B) The performance and processes of internal customers

(C) Individual staff members’ personal goals and objectives

(D) The collection of data to measure performance

Task 2-D-1


Option (C) is correct because an individual’s goals and objectives are based on the purchasing department’s goals. The Key Performance Indicators (KPIs) of the department should be considered when writing individual staff members’ goals and objectives.

Option (A) is incorrect because the purchasing department’s goals and mission statement indicate what is important to the organization and help determine what is important to its supporting organizations. These must be considered when determining what is important to measure and monitor.

Option (B) is incorrect because it is important to develop KPIs in conjunction with internal customers.

Option (D) is incorrect because KPIs need to be based on data collected for measurement purposes.

Task 2-D-1


Mary Smith and her investment recovery team mapped the

process for the highest cost products in her company’s finished

goods inventory. Her process map suggested many

informational elements related to the input side of the analysis.

Which of the following BEST illustrates an informational input

necessary to ensure an effective analysis?

(A) A commodity sourcing plan

(B) Final total cost of ownership (TCO)

(C) Level and cost of service

(D) A spend analysis


Which of the following BEST illustrates an

informational input necessary to ensure an

effective analysis?

(A) A commodity sourcing plan

(B) Final total cost of ownership (TCO)

(C) Level and cost of service

(D) A spend analysis


Option (D) is correct because a spend

analysis is one of the first analyses that

should be undertaken, and it is on the

input side of the cost analysis.

Options (A), (B) and (C) are incorrect because

these are illustrations of output of a typical

cost analysis.

Exam 3 Section A – Leadership

Task 3-A-1 thru 3-A-18

Total of 96 Questions !

Exam 3 Section A – Leadership Task 3-A-1 Represent the supply management organization in

decisions related to the organization policies.

Task 3-A-2 Develop and implement business plans.

Task 3-A-3 Develop, implement and monitor a strategic supply management plan.

Task 3-A-4 Plan/develop/provide operating policies, guidelines and procedures.

Task 3-A-5 Develop/implement changes to supply management policies as needed.

Task 3-A-6 Participate in company acquisitions, mergers and divestitures.


Task 3-A-7 Represent the supply organization in meetings with corporations and government agency.

Task 3-A-8 Lead or participate in cross-functional and/or multifunctional teams.

Task 3-A-9 Disseminate information & promote training related to supply management policies and procedures.

Task 3-A-10 Market the value of strategic sourcing and sourcing strategies.

Task 3-A-11 Evaluate the supply management organizational structure and modify as necessary.

Task 3-A-12 Hire, develop, retain, promote and/or dismiss supply management personnel.


Task 3-A-13 Supervise and lead human resources to achieve initiatives.

Task 3-A-14 Conduct/authorize job training for the professional development of the staff.

Task 3-A-15 Develop/manage/evaluate/measure relationships with internal departments.

Task 3-A-16 Develop/utilize criteria for evaluating supply management department performance.

Task 3-A-17 Conduct role design evaluation and potential job redesign requirements.

Task 3-A-18 Create and manage a succession plan.

Exam 3 Section B – Risk and Compliance

Task 3-B-1 thru 3-B-8



Task 3-B-1 Develop, implement and manage a risk profile and strategies.

Task 3-B-2 Develop and implement a risk management and/or claims management program.

Task 3-B-3 Implement supply management processes in consideration of legal issues.

Task 3-B-4 Develop/implement/maintain a database/physical filing system.


Task 3-B-5 Verify the existence, accuracy and completeness of relevant financial transactions.

Task 3-B-6 Assess risk from end of life cycle issues in the marketplace.

Task 3-B-7 Manage and control the storage/disposal of hazardous/regulated materials.

Task 3-B-8 Comply with programs that prevent and respond to discrimination or harassment.

Exam 3 Section C – Strategic Sourcing

Task 3-C-1 thru 3-C-8


Exam 3 Section C – Strategic Sourcing Task 3-C-1 Establish and execute strategic sourcing plans..

Task 3-C-2 Establish and standardize strategic sourcing procedures and business process improvements.

Task 3-C-3 Identify, evaluate, select and implement technologies that support supply management functions.

Task 3-C-4 Leverage spend through identification, prioritization, development and execution of strategies.

Task 3-C-5 Conduct analysis to determine insourcing or outsourcing strategy.

Task 3-C-6 Create new systems and process improvements to help the organization meet sales goals.


In general, assets that are likely candidates for divestiture are those in which:

I. Redundant capabilities exist between the organizations.

II. Services are aligned with the organization’s strategic interests.

III. Facilities are outdated.

(A) I and II only

(B) II and III only

(C) I and III only

(D) I, II and III

Task 3-A-6


Option (C) is correct because both I and III are reasons for the divesting

assets. It is unlikely you would want to dispose of or divest products or

services that are in alignment with the organization’s strategic objectives

(II, above); since all the other responses include II, option (C) is the

correct choice.

Options (A), (B) and (D) are incorrect as each of these options includes II;

as stated above, II would be a reason not to divest. However, options I

and III, along with any existing liabilities or legacy costs the organization

wishes to minimize , all are reasons to consider divestiture.

Task 3-A-6


Which of the following initiatives could a supply

organization implement to more fully integrate

financial and information flows?

(A) Inventory and logistics information systems

(B) Accounts payable and accounts receivable

systems

(C) Procurement-to-pay cycles

(D) Respective warehousing systems


Option (C) is correct because only a complete

inter-corporate procurement-to-pay cycle

synchronization will result in a best-in-class

integration and alignment between the supply

manager and supplier.

Options (A), (B) and (D) are incorrect because they

provide only some of the information needed to

more fully integrate financial and information flows.

Bridge Exam Questions from parts of all 17 categories of Exams 1,

2 and 3; 180 questions (all scored; 3 hours

allowed):

- From 20 of 25 tasks in Exam 1



Exam spec highlights all bridge components

Hints for Successful Testing

Review the areas that are highlighted by your practice exam scores.

Go with your first impression. Changing answers seldom works.

Read the question, if you know the answer and one of the selections is that answer, select it.

If you do not know the answer, read the question again, read all the answers, and eliminate the answers that are incorrect using your scratch paper. ABCD and cross them out as you eliminate them. If you can eliminate 2 answers, you are left with a 50-50 chance if you must guess.

Personally, I like to answer each question as it occurs without going back to it or reviewing.

Hints for Successful Testing (cont.)

Get plenty of rest the night before.

Don’t stress yourself before the exam. Give yourself plenty of time to arrive at the testing site.

Bring your confirmation letter and your picture ID with you.

Dress in layers so that you can be comfortable through the exam.

Bring your own calculator. You’ll be much more comfortable with it than the one supplied by the center. Remember it must be a simple, non-programmable calculator.

Take your time with the questions.

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Certified Purchasing Manager (C.P.M.)

Expiration date for issuing new

C.P.M.s will be

December 31, 2013

Will continue to recertify

current C.P.M.s

Value and recognition of

your C.P.M. are permanent.

Last day to register for the C.P.M. Exam

Last day to take the C.P.M. Exam

Last day C.P.M.s may take Modules 3-4 to Re-certify

Last day to apply for the C.P.M. Designation

Last day to register for the C.P.M./CPSM Bridge Exam

Last day to take the C.P.M./CPSM Bridge Exam

December 31, 2008 December 31, 2009

December 31, 2009

December 31, 2013

December 31, 2013

December 31, 2014

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Certified Purchasing Manager

(C.P.M.)

Maintain recertification every 5 years, may

continue to recertify

Lifetime Certification – 18 years of

experience

These requirements have not changed.

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C.P.M. Recertification Requirements

Every Five (5) years with 84 Continuing

Education Hours (CEHs)

Categories for earning CEHs – college

courses & seminars (taken or taught),

contributions to the profession, articles.

One Year Grace period – does not reset

certification date

Questions? ~

Thank You! 57

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