Advanced Contract and Financial Management (L5M4)

1.2 Evaluate methods of measuring and improving contract performance

• 1.2.1Sources of data and analysis of data in relation to cost, quality, delivery, safety, and ESG (Environmental, Social, and Governance) considerations
• 1.2.2Measures supporting the improvement of ESG (Environmental, Social and Governance) considerations
• 1.2.3Measures supporting the improvement of innovation in procurement and supply
• 1.2.4Measures assessing product development time to market
• 1.2.5Role of qualitative and quantitative data to measure and improve contract performance
• 1.2.6Calculate and analyse return on investment for the use of data in measuring contract performance
• 1.2.7Assess opportunities for data systems integration across supply chains

1.3 Examine approaches available for supplier contract performance

• 1.3.1Context and scope for supplier contract development
• 1.3.2Supplier capability assessments
• 1.3.3Learning, knowledge, and technology transfer between and across organisations
• 1.3.4Collaborative product/service development: cross functional working, early supplier involvement, supplier networks, supplier co-ordination and supplier forums
• 1.3.5Continuous improvement strategies, action plans, and reviews

1.4 Assess scope and developments to improve ESG (Environmental, Social, and Governance) considerations in supply chains

• 1.4.1Environmental measures
• 1.4.2Social and social value measures
• 1.4.3Governance measures
• 1.4.4New supply chain finance

2.1 Assess the market factors that influence strategic sourcing

• 2.1.1Industry dynamics
• 2.1.2Pricing behaviour
• 2.1.3Financial data relating to suppliers
• 2.1.4Market demand and supply factors
• 2.1.5Business motivations, cost margins, and working practices of key suppliers
• 2.1.6Internal stakeholder involvement
• 2.1.7ESG (Environmental, Social, and Governance) considerations

2.2 Examine the assessment of sourcing options and trade-offs for strategic supply of products and/or services

• 2.2.1Contract type and duration
• 2.2.2Competitive vs. non-competitive sourcing
• 2.2.3Number of suppliers and vetting strategies
• 2.2.4Marketplace competition and the role of competition regulators
• 2.2.5Direct negotiation
• 2.2.6Joint proposition improvement
• 2.2.7Supply chain visibility

2.3 Analyse a strategic assessment plan for a key supplier using modelling and analytical techniques

• 2.3.1Capacity and capability
• 2.3.2Planning
• 2.3.3Quality control systems
• 2.3.4Security
• 2.3.5Technical expertise
• 2.3.6Reputation and time established
• 2.3.7Trading with competitors
• 2.3.8Future expansion opportunities – partnership potential
• 2.3.9Sensitivity analysis and calculation of investment outcomes based on a range of assumptions
• 2.3.10Supplier performance based on financial data: calculate percentage change in revenues, costs, and profits
• 2.3.11Sales forecast data and calculation of variances when comparing sales forecast data with the wider market

3.1 Analyse how finance can impact on supply chains

• 3.1.1Role of financial management in supply chains
• 3.1.2Options and risks of working capital funding and the role of credit insurance
• 3.1.3Project funding options and assessment of cost of capital using weighted average cost of capital (WACC)
• 3.1.4Medium and long-term financing options
• 3.1.5Financing of investments, corporate financing options, and the role of dividends

3.2 Appraise methods for managing the volatility of currencies in supply chains

• 3.2.1Calculation of changes in indices to inform cost analysis
• 3.2.2Fixed and floating exchange rates
• 3.2.3Demand and supply factors in foreign exchange and the reasons for exchange rate volatility
• 3.2.4Spot, forward, and derivative instruments in foreign exchange
• 3.2.5Services provided by the banking sector in foreign exchange

3.3 Analyse methods for managing the volatility of commodities

• 3.3.1Types of commodities
• 3.3.2Operation of commodity markets
• 3.3.3Role of speculation in commodity markets
• 3.3.4The operation of spot, forward, futures, and hedging in the buying and selling of commodities
• 3.3.5The operation of Contract for Difference (CFD) in commodity markets

4.1 Assess financial measures that can be applied to the performance of the supply chain

• 4.1.1Calculation and evaluation of performance measures linked to cost, time, quality, and customer satisfaction
• 4.1.2Calculation and evaluation financial measures of efficiency (ROCE), cash flow, sales growth, investment (IRR and NPV), and variances over time
• 4.1.3Assessment of measures: stock turn, share yield, and earnings per share
• 4.1.4Use, interpretation, and limitations of balanced scorecards

4.2 Examine the impact of stakeholder feedback on the supply chain performance

• 4.2.1Purpose of stakeholder feedback in developing supply chain performance
• 4.2.2Devising metrics of performance including feedback from third parties and suppliers, and other stakeholders
• 4.2.3Receiving feedback, reporting structures, and processes

4.3 Analyse approaches to benchmarking that can be applied to measuring supply chain performance

• 4.3.1Use and limitations of benchmarking in supply chains
• 4.3.2Supplier involvement in performance improvement
• 4.3.3Ethical approach the collection, storage, and use of benchmarking data