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
2
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.

4
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 individuals
personal job responsibilities and/or supervisory responsibilities or the
responsibility of someone else in the supply management organization.

Components Survey Results
34%
63% 63%
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83% 83%
98% 99%
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Supply Management Components
7
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

9
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

10
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
11
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)


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.

13
14
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
Exam 2 165 questions (150 scored)
2 hours and 45 minutes allowed
Exam 3 180 questions (165 scored)
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 examinees scores to
predetermined passing (or cut) scores
- If score is at or above the passing score, the
person passes the test. If the persons 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.

17
Scoring, Equating and Scaling
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.

18
Scoring, Equating and Scaling
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
Exam 1
Sample Practice Question 1 Answer
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 suppliers employees.

Option (D) is incorrect because an MBE is defined as an ethnic
minority.
Exam 1
Sample Practice Question 2
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.


Exam 1
Sample Practice Question 2
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.


Exam 1
Sample Practice Question 2
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

Exam 2
Sample Practice Question 1
When developing Key Performance Indicators (KPIs) for the purchasing
department, all of the following should be considered EXCEPT:

(A) The organizations 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
Exam 2
Sample Practice Question 1 Answer
When developing Key Performance Indicators (KPIs) for the purchasing
department, all of the following should be considered EXCEPT:

(A) The organizations 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
Exam 2
Sample Practice Question 1 Answer
Option (C) is correct because an individuals goals and objectives are based on the
purchasing departments 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 departments 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
Exam 2
Sample Practice Question 2
Mary Smith and her investment recovery team mapped the
process for the highest cost products in her companys 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

Exam 2
Sample Practice Question 2 Answer
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

Exam 2
Sample Practice Question 2 Answer
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.
Exam 3
Section A Leadership
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.

Exam 3
Section A Leadership
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


Total of 32 Questions !

Exam 3
Section B Risk and Compliance
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.

Exam 3
Section B Risk and Compliance
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


Total of 37 Questions !

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.
Exam 3
Sample Practice Question 1
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 organizations 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
Exam 3
Sample Practice Question 1 Answer
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 organizations 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
Exam 3
Sample Practice Question 1 Answer
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 organizations 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
Exam 3
Sample Practice Question 2
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

Exam 3
Sample Practice Question 2 Answer
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

Exam 3
Sample Practice Question 2 Answer
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
- From 19 of 24 tasks in Exam 2
- From 22 of 32 tasks in Exam 3

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.
Dont 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. Youll 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.

65
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
66
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.
67
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