SPEAKER_00 0:14

Hello and welcome to Let's Talk Procurement, the only show you need to master the art of procurement. Let's go, baby! Hello and welcome back to another episode of the Let's Talk Procurement Podcast. The only place you need to come for your procurement knowledge with me for one of the last times ever for at least season three and maybe season four is uh the what do we call you? What was that the benevolent and the vagrant? So he's both of those in one. Uh Luke 10, how are you my friend?

SPEAKER_01 0:48

Yeah, I'm good. I'm good. Uh we're currently sat in the studio. I don't know if this makes the sound any better, um, but it's extremely hot in here. As one of the um as one of the well obviously one of the positives is is great audio quality, but one of the negatives is that we have to boil it live because as we know, the hotter it gets the the less interference there is with sound molecules from other uh from other sources. So that's why studios have to be really hot. Um we are we're both pretty much sweating.

SPEAKER_00 1:26

I mean it's good practice for your travels because it will be this humid there.

SPEAKER_01 1:30

Yeah.

SPEAKER_00 1:30

I think when you're in Colombia, you will be saying, Oh, I've trained for this.

SPEAKER_01 1:37

I'm impressed by the way that you finally named a country that's in Central and South America that I may be going to. Oh, what is it? Right.

SPEAKER_00 1:49

India, Nicaragua.

SPEAKER_01 1:51

Um Nicaragua is a place I'm going. You I think you named Djibouti. Oh yeah, Djibouti, yeah. Um Vanuatu. Uh Canada. Canada. I'm not going to. Well, not that I know of. You never know, things might change.

SPEAKER_00 2:07

Yeah, well, especially when you uh make some friends out there and they say come to Canada and you'll go, yeah, alright. See you later.

SPEAKER_01 2:13

I'm in. Well, we're ending the episode already.

Listener Question On Future-Proofing

SPEAKER_00 2:16

So yeah, that's the buzzword, isn't it? No, but it's a safe word, that's what you call it. Right, so uh we have had a listener get in touch with a question for you before you leave. So I'll read out the message. Um, thank you. So my name is Sarah. Uh hoping it's Sarah, not Sarah. Uh it's got H on the end. So my name is Sarah, and I just wanted to say how much I enjoy the Let's Talk Procurement podcast. Your practical approach and honest conversations about supply relationships, stakeholder engagement, and the role of procurement have really helped me within my own career and how I think about it. My question for you, Luke Ten: what do you think procurement professionals such as myself can be doing right now to make themselves future-proof for the next five years?

SPEAKER_01 3:01

Uh future-proof. Um, well, immediately my head is going towards artificial intelligence. Um, that's gonna be a big, a big topic. Um, although I did predict uh, and you know, maybe I should stand firm on this, that it's only a hype AI. I think it's gonna go down in in about two weeks. This AI stuff's not gonna catch on, really, is it? Um all those savings that you can make with it and and things that it can do a lot quicker than any human. Uh that's not gonna that's not gonna catch on. So I wouldn't worry about about getting up to speed with that or any potential new technology that might uh come along with that. Also, um it's it's potentially it's probably a bit of a waste of time to do some professional qualifications, isn't it? Well I think uh, you know, like sips level four, five, five, six, um, yeah, it's I think to make yourself future-proof, you need to focus on you right now, you know, you need to go and find yourself. You need to leave the century and South America.

SPEAKER_00 4:04

Yeah, you need to just quit.

SPEAKER_01 4:09

Yeah. Quit, uh, quit, but don't quit listening to the Let's Stop Procurement podcast.

SPEAKER_00 4:17

Well, I think if you, you know, if you go to Djibouti and you find yourself on top of a mountain speaking to a monk, ask him, how do you procure your food supplies when the nearest village is 10 miles away? And what does that do to you? It makes you a better professional.

SPEAKER_01 4:36

One thing that you should also do is uh look to make yourself future-proof, is look at past papers. Maybe from approximately uh can I do the math 20 no 33 years ago.

SPEAKER_00 4:54

No, don't be stupid.

How To Send Questions In

SPEAKER_01 4:55

30 something? 32 years ago. 32 years ago, there we go. Um and we have you just paused there.

Digging Up 1990s CIPS Papers

SPEAKER_00 5:04

No, I wanted to ask um well, I wanted to thank Sarah for getting in touch. And if any of you listeners have questions that you would like to ask Luke 10, you've probably missed him now, but send them in anyway. Uh reach out to us on two luke's onesip at gmail.com and or using the text us function in the description below. Um that's our favourite one because we can publish your comments straight onto our website. Uh so you get a little hall of fame sort of moment, really. Um so yeah, please do reach out, that would be much appreciated. And um now let's jump into the past papers. So, did you know when you invest in stocks they say that past performance is not indicative of future returns?

SPEAKER_01 5:51

Is that investment advice?

SPEAKER_00 5:53

Uh it's I think it's like a disclaimer, uh, just to kind of get themselves out before you throw all your money in something that's historically done well. Yeah. Um, which is exactly why we're looking at papers from 20 years ago.

SPEAKER_01 6:07

30 years ago.

SPEAKER_00 6:08

30 years ago.

SPEAKER_01 6:09

Yeah, yeah. Uh I I recently acquired these. Um I was out with my uh SIPS detector. I was scanning, I was scanning, um I was scanning a residential street with my SIPS detector. Um and it started it started beeping and going crazy, and I had to had to dig up the road and I came across a a locked box um with a combination. And the combination, you know, came with a little inscription next to the little combinations uh part. It said um find the tallest mountain and the smallest tree and the most ravenous river. Wait, can the river be ravenous? Well it can now. Rivers can be ravenous. Um and from that I, you know, I completed a quest and I finally got the finally got the um the the combination, opened the box and inside was a whole bounty of SIPS exams. Um it was called SIPS, however, SIPS back in those days stood for the Chartered Institute of Purchasing and Supply Management. Uh so I suppose it's SIP'em. SIPS em. SIP'em. SIP. C-I-P-S M.

SPEAKER_00 7:39

And A if you want to put the AND in.

SPEAKER_01 7:41

Yeah, yeah. SIPSAM. SIPSAM. Nice, okay. So uh which one are we doing first? Because we've actually got quite a few here. We've got um May 94, what's that one? May 95, May 97, um sorry, yeah, May May 95, and a case study from May 95. Uh have you got another 94 one in your hand over there?

SPEAKER_00 8:07

Yeah, I do, yeah. Um which is quite interesting actually. So we'll we'll dive into this. It's set the scene, set the scene for our display. For the module, the module is called Professional Stage International Purchasing. Wednesday, the 18th of May 1994. Remember what you're doing then? No. I don't. Do you? I was three months old.

SPEAKER_01 8:32

Wow. Um and holding this paper in my hand is so you uh this is exactly what you were doing, reading and revising the process. I was preparing for this, yeah. Uh sorry, I just realized by the way, that when I said it was purchasing and supply management, I was reading out the module title. Um for the one I'm looking at. Yeah. But I'm pretty sure we saw it on something. Yeah, here we go. The Chartered Institute of Purchasing and Supply. So forget the management part. It still SIPS.

SPEAKER_00 9:00

So just replace purchasing with procurement.

SPEAKER_01 9:02

Yeah, and knowing how much these rebrands cost, I bet that that uh change of one word from procure per purchasing to procurement cost a bit as well.

International Purchasing Case Study Breakdown

SPEAKER_00 9:11

Yeah, and I mean the logo doesn't look too different either. Um so setting the scene, this module is international purchasing. Question one is compulsory, um to be attempted by all candidates with a maximum of 50 marks, and then you have two questions from section B. So I think there's uh one, two, three, four, five options, and you have to pick two to answer on the second question, and you're allowed three hours to get the hundred marks. Um, we won't go into it in into that much detail, but effectively uh we've got a London UK multinational company, and it has a Canadian subsidiary, and also has a uh they're also looking to supply vault doors to South America Bank in Santiago, Chile.

SPEAKER_01 10:08

Nice, so somewhere I potentially may be going.

SPEAKER_00 10:11

Could be, yeah, you could visit that, see those doors. Um and they're effectively saying all around how do you do invoicing between the UK, the Canadians, and then obviously into American um and kind of how can you be protective of of that situation. So, for example, transportation to Chile from Canada has been estimated at less than two-thirds the cost of transportation from the UK. So what they've done is uh they've the UK firm has basically awarded the work to the Canadian firm with a view to saving costs and improving lead times.

SPEAKER_02 10:55

Okay. Okay.

SPEAKER_00 10:57

So I'm gonna read the questions, we don't have to answer them, it's just to give you a bit of a this was the kind of 50 marker that would have been probably an hour and a half of work after you've read the little case study.

SPEAKER_01 11:07

I don't have to answer them, but if you look and see that this episode is three and a half hours long, then I would have answered it.

SPEAKER_00 11:16

Uh so the text uses the term multinational. How might we define a multinational? And in what ways might multinationals differ from other businesses? That was seven marks. It's quite a big question for seven marks, I think.

SPEAKER_01 11:28

Yeah, well I guess you again with CIPS, what hasn't changed is you need to know how to structure your responses like it's not just enough to know the knowledge.

SPEAKER_00 11:37

Yeah, define it and then answer the question. The UK office and the Canadian office will come to some suitable pricing arrangement, we are told. What do you understand by the term transfer pricing and what are the significant factors involved in transfer pricing in your view? Seven marks.

SPEAKER_01 11:54

Okay.

SPEAKER_00 11:56

What terms and conditions of contract would typically need to be included in a contract of purchase from a purchaser from overseas, which would not normally be included in contract of sale or purchase in a domestic contract. Brackets. Marks will not be awarded for discussion on topics which would usually be included in domestic contracts anyway. So you really have to know the difference there. That's 18 marks. And then if you were the buyer for the final customer, the Banco del Sud, what measures would you take?

SPEAKER_01 12:29

Banco del Sud, mate.

SPEAKER_00 12:32

Come on, geezer. Uh what measures would you take to be certain of receiving precisely the goods that the bank wants on time, properly fitted and effective, and in good working order for the foreseeable future, as originally promised by the salesperson from Millwood. Uh I suspect that's like warranties and guarantees and good things like that.

SPEAKER_01 12:53

OCIF uh KPI, maybe.

SPEAKER_00 12:56

Maybe KPIs, yeah. And then so that's the they're the compulsory questions, so I'll come back to that in a second. And then the section B, which is to pick two of these questions. Uh discuss the latest developments with regard to international purchasing in one of the following. G A T T or the European Union. Next one. Barter, compensation, and buyback are different forms of countertrade. Explain how each type operates and describe the circumstances in which each form might be appropriate. Explain the distinctions between custom duties, excise duties, and agricultural levies, giving examples as appropriate.

SPEAKER_01 13:40

So my reflection, is that all the questions?

SPEAKER_00 13:43

There's another two, but they really are, they're really long.

SPEAKER_01 13:45

Okay, okay. So I I don't know if you feel the same. Um, it seems a little bit, and or maybe this is a thing in level six, but to kind of have two possible options for questions that you can answer, but you don't have to answer them both. I don't know, I don't know how I feel about that because it seems a bit like not only do you have to think, you know, you have to you have to go through all the all the exam stress, um answer the what was it, 50 marks before you then have to sort of, I suppose, half think about an answer for both of them and then decide.

SPEAKER_00 14:23

It kind of seems like they're playing with you a little bit, going, oh, these are the two ones you could answer, but you can only do one, or so I think the first question, so the four big questions I read off there is 50 marks broken down into four tasks, basically. Right. The second section, section B, you're picking two questions to answer for 25 marks each out of four questions. Uh five questions, sorry. So pick you've got five questions you can choose from, and the one on the back is the chart the SIPS has recently debated changes to the ethical code of the SIPS. One of areas looked at for change was the practical practicability of applying an ethical code to all situations worldwide. Should ethics remain constant irrespective of geographical location? It's quite a good question, actually. Probably still quite relevant.

SPEAKER_01 15:13

Yeah, they they do seem quite difficult, but maybe that's because we haven't prepared directly for these.

SPEAKER_00 15:21

Yeah, I mean, some of the stuff in there is definitely still still valid.

SPEAKER_02 15:25

Yeah.

SPEAKER_00 15:26

But I don't remember in my whole SIP journey seeing such an emphasis on um the kind of def definitions of certain certain things. So transfer pricing, for example, or um, barter compensation and buyback being forms of counter trade, and how do you then find them and where do you apply them?

1995 Case Study And What Changed

SPEAKER_01 15:52

Yeah, yeah. So I mean maybe we should we should um talk about another option before we then talk about what SIPS currently is and compare the two. So just to quickly go over the case study section from uh Wednesday the 17th of May 1995. Um I've been provided with the case study document uh for a company called Ledger Life. Um a fictional company that that SIPS has made up. It's how many pages this this seems like quite a lot of pages. Wow. Maybe 15 to 20 pages of uh of case study, and then the back two are blank. But um let's say let's say about 15 pages for case studies. Uh it's got a lot of information in there. I don't know what the structure was, I didn't if you got this in advance of the exam and had to sort of revise it, but there's lots of things in there like an analysis of procurement. Um and so for example, analysis of procurement. Uh uh someone, a consultant came in to do uh a wide-ranging survey of procurement practices within Leisure Life, and then there's about three pages, maybe four pages, of of findings that this imaginary consultant came up with. Um it seems quite comprehensive this this uh this case study. So I I'm gonna assume that you you were given this in advance of the.

SPEAKER_00 17:32

I would I mean there's a lot of notes on it from whoever you your source is or the treasure box. So it's some some written notes as they're going through it.

SPEAKER_01 17:40

So indeed, yeah. Yeah. And then once you get to the question, it's a similar story in terms of three-hour um through time allowed three hours, and all questions carry equal marks, so there's four on here. Um in what ways can the chairman of Leisure Life improve the purchasing operations as detailed in the case study? Discuss the techniques and their application that could be specifically related to Leisure Life so that the company becomes profitable. From a logistics point of view, what developments are important if Leisure Life is to reduce its cost levels and what negotiating strategies should be employed in dealing with some of the specific contractual problems that exist within the company.

unknown 18:23

Okay.

SPEAKER_01 18:24

Again, seems like quite maybe this is like a final like a big. Yeah, like our our version of the I don't know what's the last tips one, module eight, or another. Ah, I can't remember to pronounce. If you're doing level four, then it's equivalent to L4M8. Um we've got some here. I don't know if this is the full set of the professional stage exams, but to go through the topic titles, um we've got international purchasing, as you said, Luke.

SPEAKER_00 18:55

Um planning, policy, and organisation.

SPEAKER_01 19:00

Purchasing and supply management uh dash legal applications and logistics. Then this last one is case study.

SPEAKER_00 19:09

So they're all written as well, yeah. If you've noticed that.

Legal Focus And Old Exam Difficulty

SPEAKER_01 19:16

And if you compare that to this is the professional stage. So I've got up the level five and six uh modules. Level five is uh managing teams of and individuals, so there's sorry, there's five compulsory, managing teams and individuals, managing supply chains, managing contractual risk, advanced contract and financial management, managing ethical procurement and supply, and then three of the following category management, achieving competitive advantages through the supply chain, product and change management, operations management, logistics management, and advanced negotiation. So those are the level five modules. Um how do you think they compare?

SPEAKER_00 20:07

Well, I've got to be honest, I'm glad we've got laptops now. Uh it feels like these are quite comprehensive. They I mean the case study example you gave does feel quite similar to some of the things I've seen in in the written essays because you do get a kind of written, well, you get a case study and then they kind of hint at some of the solutions and then you have to go into further detail. Um but some of these look brutal to be fair, if I'm being honest.

SPEAKER_01 20:39

Yeah, agreed. Agreed, Ed. I as we say I don't know if this was everything for uh from start to finish, but what is here is is quite difficult and well, maybe we should say comprehensive is a better way to describe it, uh, especially the case study. There's loads of information about leisure life in there which they may not even ask about. Um so I'm glad I did my assignment route in comparison to this.

SPEAKER_00 21:09

Yeah, well, I I think the one thing that looks quite clear is that if you do smash all of these exams, you're probably quite knowledgeable when abroad.

SPEAKER_01 21:21

Definitely, yeah. Well set for life.

SPEAKER_00 21:26

I mean human. I'm just gonna whip out the logistics. Uh not the where is it? The legal one. Because that was I saw some things in there and I was like, this is um this is interesting. It's actually quite good. Um when does the contract become binding on the parties? What does the term timers of the essence mean, and what effect would this have upon a contract, in particular upon the rights? The parties? What effect will supplier shortages have upon its choice its chances of enforcing a particular clause that it's referencing? What is the legal definition of liquidated damages? And how may the courts view the clause in these terms? What are the advantages and disadvantages of using liquidated damages clauses rather than relying upon the courts to assess damages? And then you start to go on how is unfair competition controlled within the United Kingdom and how does this differ from the protection available under the Treaty of Rome?

SPEAKER_01 22:43

Wow. I guess that's maybe that's something that you learn as in if I never knew what sorry, if I didn't know what Portus Fire Forces was and someone asked me about that, that would seem quite complicated to me.

SPEAKER_00 22:58

Yeah, I mean, if the end goes like if an employer seeks to restrain an employee from working for a competitor when he or she leaves, how may he do this and what legal pitfalls must he be aware of? Like some of the stuff in here is things that I would go to a legal contact for support and guidance on as opposed to knowing myself, which obviously I'd love to know more about, but didn't realise it was within our kind of remit, so maybe that's just a shift of how the professions change.

SPEAKER_01 23:25

I was gonna say, do you think SIPs maybe strategically are thinking that we need more, we need to widen the potential base of people that can do our exams to get more get more funds in. Let's make it easier. Uh I don't know, because this seems quite hard. But or maybe as you say, the focus as to what I suppose it was purchasing back in the day, so probably a lot more of it was focused on um kind of the legal side, contracting. Yeah, I'm sure there's a bit on negotiation. No, was that the that's the current one where there's negotiation and category management, isn't there? And yeah, what's potentially interesting is there's a massive focus right now on category management, isn't there? And there's nothing on category management in in the 1993, four, and five exams.

SPEAKER_00 24:13

Um the other thing that's missing is stakeholder management. I haven't seen any reference across the six, seven papers where we where we're looking at the importance of stakeholder management. Um again, probably a shift of the profession and where it's moving towards.

SPEAKER_01 24:32

Maybe or also maybe it's the copies or the exams that we have, but yeah, as we say, it's quite purchasing heavy, it's quite legal heavy, it's quite logistics heavy in comparison to procurement sided, which is more about kind of uh category management, stakeholder engagement, slash management, uh and project project T kind of stuff.

SPEAKER_00 24:59

We've got some some Latin in here as well. Explain the principle of ubermi fede. Probably butchered that, uberimi fede.

SPEAKER_01 25:09

Yeah.

SPEAKER_00 25:11

See it there.

SPEAKER_01 25:12

Okay, nice.

SPEAKER_00 25:13

Uh you do you know what that is? No idea. Uh but our good old trusty friend Google says it is a Latin term meaning utmost good faith.

SPEAKER_01 25:26

Okay. So if that's in a I could guess and say if that's in a contract, then the supplier's gotta perform to what's the word we would use nowadays?

SPEAKER_00 25:37

Um In accordance with good faith, probably.

SPEAKER_01 25:39

We don't we sometimes be um uh like best endeavours or something, they've gotta fix it to best endeavours.

SPEAKER_00 25:48

Yeah. Um so I think this might be so it says uh most notably used in insurance, requiring parties to fully and truthfully disclose all material facts. Right, right. Even if not asked, with failure to do so potentially voiding the whole contract. This creates a higher standard than typical contracts where the principle of caveat emptor brackets let the buyer be aware usually applies.

Contact Details And Guest Pitch Rant

SPEAKER_01 26:15

That's probably the only Latin I know. Um so yeah, I mean if you did uh take your sips back in the 90s and you can shed some light on how it was or even in the early 2000s could be interesting as well. Uh please feel free to get in touch. Our email address is 2lukes1sip at gmail.com. That's the number two, Luke's plural, the number one, cip at gmail.com. Uh as I believe we said earlier, you can also slide directly into our DMs or directly onto our website, however you want to see it, uh, with a text us button in the link. Sorry, the text us link in every description of every episode. And also we've got an Instagram, let's underscore talk underscore procurement.

SPEAKER_00 27:03

Yes. Oh, just before we wrap up, I want to shout out to those who keep trying to request guests or add guests to our podcast because that is driving my nut in. Agreed. I'll tell you why. Because they're like, oh, we've got a great guest for your show. Uh a, they probably haven't listened to the show, and B, they think we're gonna pay to have a guest on our show. Are they joking?

SPEAKER_01 27:22

And what what annoys me more is they'll send an email in saying, just following up for the fifth time to check if you're No mate, if I didn't respond to the first four times, I probably didn't want your guest.

SPEAKER_00 27:33

Yeah. Um imagine doing that cold calling for guests on a podcast, hoping that they will get money for it.

SPEAKER_01 27:39

Yeah.

SPEAKER_00 27:41

I know, and they're coming to us.

SPEAKER_01 27:44

We we should be we should be getting money for having people on our podcast.

SPEAKER_00 27:49

Well, that's what I think. I think anyone who's had a platform is is lucky to have come on here, to be honest.

SPEAKER_01 27:54

Yeah. That stops now.

SPEAKER_00 27:57

It does indeed. As does this show. See you later.