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APICS A PICS CSCP Exam Conte Cont ent Manua nu al This manual is in effect effect from Janu ary 1, 2014–De 2014–Decem cember ber 2014. 2014. Visit apics.org/ecmerrata for APICS CSCP Exam Content Manual errata. The references in this manual have been selected solely on the basis of their educational value to the APICS CSCP certification program and on the content of the m aterial. APICS does not endorse any services or other materials that may be offered or recommended by the authors or publishers of books and publications listed in this manual. ©2014 APICS The Association for Operations Management 8430 West Bryn Mawr Avenue, Suite 1000 Chicago, IL 60631-3439 USA Phone: 1-800-444-2742 or +1-773-867-1777 Fax: +1-773-639-3000 No portion of this document may be reproduced under any ci rcumstances. CSCP CSCP is a registered trademark of APICS. Stock #09031-2014
Table of Contents Letter to Candidates ....................................................................................................................................................... 1 Introduction ..................................................................................................................................................................... 2 About the APICS CSCP Examination............................................................................................................................. 2 Question Format ............................................................................................................................................... 2 Taking the Test .................................................................................................................................................. 3 Interpreting Test Scores .................................................................................................................................... 3 Studying for the APICS CSCP Exam………………………………………………………………………………………...…. 3 APICS CSCP References………………………………………………………………………………………………. 3 Terminology…………………………………………………………………………………………………………….... 4 Additional Resources for APICS CSCP Candidates……………………………………………………………….... 4 APICS CSCP Learning System.......................................................................................................................... 4 APICS CSCP Instructor-Led Review Courses................................................................................................... 4 APICS Educational Programs............................................................................................................................ 5 APICS Certified in Production and Inventory Management (CPIM) Basics of Supply Chain Management (BSCM) Review Course and Examination............................................................................................ 5 APICS CSCP Certification Maintenance: Continuing Professional Development ......................................................... 5 The Importance of Certification Maintenance.................................................................................................... 5 APICS Code of Ethics .................................................................................................................................................... 5 APICS Certified Supply Chain Professional (CSCP)...................................................................................................... 7 Scope of the Subject Matter .............................................................................................................................. 7 APICS CSCP Content ....................................................................................................................................... 7 Content Outline ................................................................................................................................................. 8 Key Terminology .............................................................................................................................................. 13 Supplemental Glossary .................................................................................................................................... 15 Bibliography ..................................................................................................................................................... 16 Sample Questions......................................................................................................................................................... 17 Answers to Sample Questions....................................................................................................................................... 18
CSCP Exam Content Manu al i
Letter to Candidates Dear Candidate: On behalf of all the members of APICS The Association for Operations Management and the Certified Supply Chain Professional (CSCP) Subcommittee, I want to thank you for your interest in the APICS CSCP program. APICS is the global leader and premier source of the body of knowledge in operations management, including production, inventory, supply chain, purchasing, and logistics. Since 1957, individuals and companies have relied on APICS for its superior training, i nternationally recognized certifications, comprehensive resources, and worldwide network of accomplished industry professionals. The APICS CSCP program is primarily intended for professionals in supply chain management and is designed to test the candidate’s knowledge of and ability to apply the supply chain management body of knowledge. It is the most widely recognized educational program for operations and supply chain management professionals around the globe. By earning the APICS CSCP credential, candidates have demonstrated their mastery of supply chain management best practices and have distinguished themselves as an industry expert with specialized, high-level knowledge and skills. The APICS CSCP program will help you advance your career while giving you validated foundational knowledge to assist in im proving your company’s competitive position and profitability. The program takes a broad view of the field, extending beyond internal operations to encompass all t he steps throughout the supply chain—from the supplier; to the company; to the end consumer and the reverse flow of products and materials for the purpose of m anaging returns, refurbishing, or recycling. The program provi des you with the knowledge to effectively manage the i ntegration of these activities to maximize a company’s value chain.
Strategy, Design, and Compliance This section addresses considerations in the design of a supply chain, the processes that support the organization’s strategy, improvement of the sustainability of the organization and its trading partners, and compliance with applicable regulations and voluntary standards. Implementation and Operations This section covers managing and balancing supply and demand through measuring, analyzing, and improving supply chain processes. This APICS CSCP Exam Content Manual is intended to provide you with an overview of the program, an outline of its body of knowledge, key terminology, and references. The outline is divided into three diagnostic areas, and the relative emphasis of each of the areas is indicated by a percentage figure. A sample of ten illustrative questions is al so provided. The APICS CSCP Exam Content Manual should not be the only reference you use to prepare for the CSCP exam; however, it should be the first. We wish you success in your pursuit of the CSCP designation.
Joanne Gorski, CFPIM, CSCP, CSCP Subcommittee Chair
The subject matter is organized into the following three content areas: Fundamentals of Supply Chain Management This section provides the foundation for the exam by addressing the concepts and strategies used for effective supply chain management. It includes an overview of supply chain management, managing the supply chain, and improving the supply chain.
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Introduction This exam content manual provides guidance for individuals preparing for the certification examination. The objective of this manual is to outline the APICS CSCP tested body of knowledge. The main section of this manual begins with a statement about the scope of the subject matter, followed by a descriptive outline of the content. Key terminology and a bibliography of references are provided. The section concludes with sample questions simil ar to those that appear on the examination, the correct answers for the sample questions, and brief explanations of why they are correct. The recommended procedure for mastering the subject matter is to review the content outline, which defines the scope of the material study each topic, using the suggested references. •
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At the end of each major section is a list of the references that apply to the topics i n that section. The first number indicates the sequence number f or the reference in the bibliography section, and the numbers in parentheses indicate the chapters within t hat reference.
+1-773-867-1777 and order a current APICS CSCP Certification Bulletin, or visit the APICS website at apics.org/cscp. Candidates who plan to test i n North America should request stock #09056, and candidates testing outside North America should request stock #09057. Students who successfully complete the CSCP examination may be eligible to receive up to three semester hours of either undergraduate or graduate college credit recommendations from the New York State Regents Research Fund, National College Credit Recommendation Service, based on an academic evaluation of student learning outcomes. Detailed information about the outcomes and credit recommendations is available at www.nationalccrs.org. Transcripts are available through APICS.
Questio n Format All of the questions on the CSCP examination are intended to test one's understanding of the CSCP body of knowledge. In addition, it is helpful to understand the various formats of questions on the examination. The following five examples illustrate the types of multiple choice questions found on t he examination: For Example 1, choose the response that best completes the statement.
Candidates should understand the definitions of key terms and the application of the outlined tools and techniques. Sufficient references are given that provide different approaches to the material covered in each diagnostic area and different styles of presenting the information. Reading periodicals, such as APICS magazine and the APICS Operations Management Now e-newsletter, will help you keep up-to-date about changes in the industry.
Example 1: The 80-20 rule is an application of: (A) statistical process control (B) defect measurement (C) root cause analysis (D) Pareto analysis (The correct answer is D.) For Example 2, choose the response that best answers the question.
About the APICS CSCP Examination The APICS CSCP exam consists of 175 multiple-choice questions (150 operational and 25 pretest). Pretest questions do not contribute to the total score, but are necessary for research purposes. Candidates should answer all exam questions. T here is a four-hour time limit for the exam. For more information about testing and regi stration policies and procedures, call APICS Customer Service at 1-800-444-2742 (United States and Canada) or
2 ©2014 APICS The Assoc iatio n for Operation s Management
Example 2: Which of the following is used as a key performance indicator (KPI) to measure variability of demand through the supply chai n? (A) bullwhip effect (B) fill rate (C) inventory turns (D) internal failure (The correct answer is A.)
For Example 3, choose the one response that does NOT correctly complete the statement. Example 3: All of the following are examples of voice of the customer EXCEPT (A) collecting point-of-sale (POS) data (B) customer panel groups (C) recording customers’ problems with recent purchases (D) surveying customers online (The correct answer is A.) For Examples 4 and 5, evaluate the statements and provide the MOST or LEAST appropriate response. The answer is not one person’s opinion; it is the accepted choice according to the APICS body of knowledge. Example 4: The MOST significant advantage of strategic sourcing is: (A) finding suppliers who can provide materials at lowest cost (B) using technology to select low-cost, high-quality sources of materials (C) developing long-term supplier relationships (D) having a process for recurring transactions with single suppliers (The correct answer is C.) Example 5: Which of the following factors has had the LEAST impact on the growth of customer relationship management? (A) increased customer expectations (B) reduced commodity prices (C) increased ease in comparison shopping (D) reduced cost of gaining new customers (The correct answer is C.)
Taking the Test The test is designed to evaluate a candidate’s knowledge of the subject matter. Therefore, the key to success is a thorough understanding of the subject matter. All questions are based on the c urrent CSCP body of knowledge as defined in the exam content manual. When you start your exam, read the directions carefully. Be sure you understand the directi ons before you begin to answer any questions. Read each question carefully and thoroughly. If a question includes stimulus material such as a table, graph, or situation, be sure to study it before you answer the question. Avoid assuming information not given, as
well as assuming you know what is being asked without reading the question completely, or “second guessing” the question. Every effort has been made to avoid misleading wording and t o provide sufficient information for each question. Choose the best answer from the choices giv en. Care has been taken to avoid misleading choices. Do not look for hidden tricks or exceptions to the norm. For each question, one and only one of the four choices represents the correct answer. Once you begin the test, approach the questions in order, but do not waste time on those that are unfamiliar or seem difficult to you. Go on to the other questions and return to the difficult ones later if you have time. If you have some knowledge about a particular question, you may be able to eliminate one or more choices as incorrect. Your score on the test will be based on the number of questions you answer correctly, with no penalty for incorrect answers; therefore, it is to your advantage to guess rather than not answer a question. Avoid changing an answer unless you are absolutely certain you marked the wrong answer.
Interpr eting Test Scores Scoring is based on your correct responses. There is no penalty for incorrect answers. The omission of an answer will be counted the same as an incorrect answer. The APICS CSCP scaled score range is 200–350. The minimum passing score is 300. You will receive your final exam score along with diagnostic information on y our performance.
Studying for the APICS CSCP Exam APICS offers a number of resources to help individuals prepare for the APICS CSCP examination.
APICS CSCP References Bibliography . The APICS CSCP Examination Subcommittee has identified a number of references for the APICS CSCP examination. These are listed in the Bibliography section of this manual. All the references contain excellent material that will assist in test preparation. For additional information on the APICS CSCP references, visit the APICS website at apics.org/cscp, or call APICS Customer Service at 1-800-444-2742 (United States and Canada) or +1-773867-1777. CSCP Exam Cont ent Manual 3
A candidate may discover that the material covered in the chapters of one reference dupli cates material covered in another reference. Both sources are incl uded as references to allow candidates some discretion in selecting test preparation materials that they find accessible and understandable. In deciding if a single reference is sufficient, candidates should assess their own level of knowledge against both the descriptive examination specifications and the detailed topic list contained in the content outline. If there are any areas of weakness, the candidate should consult another reference as part of the t est preparation process. It is not practical to list all texts that contain excellent material. The serious student of supply chain management who wishes to stay current with industry should take advantage of publications such as those listed in the comprehensive APICS Educational Resources Brochure (stock #01041), featuring APICS reference materials. To receive the brochure, call APICS Customer Service at 1-800-444-2742 (United States and Canada) or +1-773-867-1777, or at apics.org/shop. Content outline. The content outline provided in this document should be considered a primary resource for exam preparation. It provides an overview of the major topics included in the exam, as well as a list of the concepts that are relevant to that topic. APICS Dic ti on ary . The APICS Dictionary, 14th edition, is an essential reference to the exam content manual and exams. Within the profession, terminology varies among industries, companies, and the academic community. The examination uses standard terminology as defined in the APICS Dictionary and the Supplemental Glossary section in this manual. Recognizing the terms and understanding thei r definitions are essential.
Terminology In studying for the APICS CSCP certification exam, candidates may discover multiple terms used to denote the same technique. An example of thi s is lateral integration versus horizontal integration. APICS has attempted to provide consistency with preferred terminology. However, synonyms are often used by authors in the various references used to compile the body of knowledge. Candidates are encouraged to be familiar with all terms and concepts listed within each outline and key terminology section, using the APICS Dictionary as the primary guide for definitions. The Supplemental Glossary, included in this manual, provides needed additional information identified by the exam committee.
Additional Resources for APICS CSCP Candidates In addition to the cited references, it may be helpful for you to pursue chapter-sponsored courses, college courses, APICS workshops, self-study courses, or courses offered by the APICS network of authorized education providers (AEPs) as a means of l earning the body of knowledge tested in the certification program. A wide variety of courses and materials is available. As with any investment, you should research various courses before choosing one.
APICS CSCP Learni ng System The APICS CSCP Learning System is a comprehensive professional development and certification preparation program. This self-directed program combines print material and online interactive tools. This system is also offered in i nstructor-led formats. The APICS CSCP Learning System does not “teach the test” and in many areas reviews concepts but does not teach concepts. The APICS CSCP Learning System provides a thorough review of the subject matter, but it should not be used without the most current APICS CSCP Exam Content Manual as a means to di rect the candidate’s study. There will likely be some content in the APICS CSCP Learning System not covered by the exam; conversely, there will likely be some content in the exam not covered by the l earning system. Thus, it is essential for candidates to use the current exam content manual in their studies.
APICS CSCP Instruc tor-Led Revi ew Courses The instructor-led format combines the APICS CSCP Learning System print and onli ne components with the leadership of a qualified instructor; peer collaboration; company networking; and a structured, set schedule to keep participants on track. Learn m ore about APICS recognized instructors at apics.org/recognized instructors or find local APICS partners that provide APICS CSCP courses at apics.org/finder . For courses in North America, vi sit the Partner and Event Finder on the APICS website at apics.org/finder or call APICS Customer Service at 1-800-444-2742 (United States and Canada) or +1-773-867-1777 to obtain contact information for your l ocal chapter. For courses outside North America, visit apics.org/international to locate the nearest partner.
4 ©2014 APICS The Asso ciatio n for Operation s Management
APICS Ed ucation al Pr ogr ams In addition to the annual APICS International Conference & Expo, APICS offers a v ariety of educational programs. For a list of APICS learning opportunities and information on course availability, call APICS Customer Service at 1-800-444-2742 (United States and Canada) or +1-773-867-1777.
APICS Certi fi ed in Pr oduc ti on and Inventor y Management (CPIM) Basics of Suppl y Chain Management (BSCM) Review Course and Examin ation The APICS CPIM BSCM module introduces terminology, approaches, and techniques for managing the internal supply chain in a manufacturing organization. For that reason, the references and the review course may be valuable resources for APICS CSCP candidates who are not familiar with the production and inventory management environment. Additionally, individuals who are not experienced with certification examinations using the multiple-choice format of items typically fi nd it beneficial to take the BSCM examination. For a complete list of APICS resources, visit the APICS website at apics.org or call APICS Customer Service at 1-800-444-2742 or +1-773-867-1777 and request a complimentary APICS Educational Resources Brochure (stock #01041).
APICS CSCP Certification Maintenance: Continuing Professional Development The Import ance of Certific ation Maintenance The growing number of individuals choosing to pursue professional development through the APICS CSCP program indicates a strong awareness that continui ng education and skills development are essential to meeting the information and technological challenges in today’s rapidly evolving workplace and global marketplace. Professional development opens doors to individual career opportunities and organizational success.
Although APICS CSCP recognition and maintenance are voluntary programs, they equally demonstrate one’s commitment to achieving the highest level of professional development and standards of excellence. The APICS CSCP certification maintenance program upholds both the objectives of the APICS CSCP program and the APICS vision to promote lifelong learning. This flexible program recognizes that individuals are at various levels in their careers, come from many industries, have different educational needs and career goals, and have varying access to continuing education. Thus, requirements for maintaining certification can be met t hrough multiple sources and a variety of professional development activities i ntended to help prepare for the challenges ahead and maintain a professional edge by preserving the currency of hard-earned certification credentials expanding your knowledge of the latest industry practices expanding your knowledge of the latest industry practices reinforcing skills exploring new technology solutions reinforcing skills improving job performance demonstrating commitment to excellence increasing competitive advantage •
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To promote professional growth and lif elong learning, APICS CSCP designees must complete the certification maintenance program every five years. Complete details on how to maintain your APICS CSCP designation will be mailed to candidates upon successful completion of the certification requirements. For information, log on to apics.org/careers-education-professionaldevelopment/certification/maintenance.
APICS Code of Ethics When you start an examination, you will be asked to pledge to abide by the APICS Code of Ethics. Once certified, you pledge to continue your education to increase your contribution to the supply chain management profession. After achieving the APICS CSCP designation, you pledge also to share your knowledge with others by participating i n APICS research and educational activities at local, district, national, and international levels.
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Maintain exemplary standards of professional conduct; Not misrepresent your qualifications, experience, or education to APICS or others you serve in a professional capacity; Respect and not violate the United States Copyright of all APICS materials, including but not limited to courseware, magazine articles and other APICS publications, APICS conference presentations, and CPIM and CSCP examination resources. In this same spirit, you must not violate the copyright of other organizations and individuals in your professional capacity; Not engage in or sanction any exploitation of one’s membership, company, or profession; Encourage and cooperate in the interchange of knowledge and techniques for the mutual benefit of the profession; In your professional capacity, respect the fundamental rights and dignity of all individuals. You must demonstrate sensitivity to cultural, individual, and role differences, including those due to age, gender, race, ethnicity, national origin, religion, sexual orientation, disability, language, and socio-economic status; In your professional capacity, not engage in behavior that is harassing or demeaning to others based on factors including, but not limited to, age, gender, race, ethnicity, national origin, religion, sexual orientation, disability, language, or socio-economic status; Adhere to this Code of Conduct and its application to your professional work. Lack of awareness or misunderstanding of an ethical standard is not itself a defense to a charge of unethical conduct; Contact the Ethics Committee when uncertain whether a particular situation or course of action violates the Code of Conduct; and Not to become the subject of public disrepute, contempt, or scandal that affects your image or goodwill.
Failure to abide by APICS Code of Ethics policy may result in sanctions up to and including decertification.
6 ©2014 APICS The Assoc iatio n for Operation s Management
APICS Certified Supply Chain Professional (CSCP) Effective for January 1, 2014–December 31, 2014 exams. CSCP Subcommi ttee Joanne E. Gorski, CFPIM, CSCP (Chair) Sustainable Insights, LLC Nishat Ahmed, CPIM, CIRM, CSCP, CPM M.C. Dean, Inc. Vinod Lall, Ph.D., CSCP Minnesota State University–Moorhead Robert Pinchot, CPIM, CSCP DuPont Andrea M. Prud’homme, Ph.D., CPIM, CIRM, CSCP, The Ohio State University Eduardo A. Shelley, CFPIM, CIRM, CSCP Solmex
Scope of t he Subject Matter Please read the introductory material i n this manual for essential information about the examination. APICS CSCP covers concepts, strategies, processes, tools, and technologies applied to managing the end-toend forward and backward flow of materials, i nformation, and value in a supply chain.
The successful candidate will be able to recognize and analyze specific supply chain situations and opportunities and select the appropriate approaches, tools, techniques, and technologies. The candidate will be able to define the actions necessary to implement selected solutions. This includes an understanding of and the ability to manage alignment of supply chain processes and capabilities with strategic business goals organizational roles and infrastructures in the supply chain material, information, and financial flows intra- and inter-organizational relationships the selection and use of technologies to enable effective process management. Many of the items on this exam require the candidate to apply one or more of the items identified in the outline and key terminology. •
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APICS CSCP Cont ent Three content areas have been designed to organize the APICS CSCP domain. The relative importance of these topics will vary among industries, but the figures given below show the percentage designated f or each section on the exam. Diagnostic part I II III
The subject matter is organized i nto three content areas:
Main top ic Fundamentals of Supply Chain Management Supply Chain Strategy, Design, and Compliance Implementation and Operations
Percentage of exam 33.33% 33.33% 33.33%
Fundamentals of Supply Chain Management This section provides the foundation for the exam by addressing the concepts and strategies used for effective supply chain management. It includes an overview of supply chain management, managing the supply chain, and improving the supply chain. Strategy, Design, and Compliance This section addresses considerations in the design of a supply chain, the processes that support the organization’s strategy, improvement of the sustainability of the organization and its trading partners, and compliance with applicable regulations and voluntary standards. Implementation and Operations This section covers managing and balancing supply and demand through measuring, analyzing, and im proving supply chain processes.
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misalignments or gaps. Knowledge in this area encompasses:
Content Outli ne I. Fundamentals o f Supply Chain Management This section addresses the f undamental concepts used for effective supply chain management and will provide the foundation for the APICS CSCP exam. It includes an overview of supply chain management c oncepts and the need to align resources with the strategy of the organization. Management and improvement of the supply chain are then addressed. Exam questions covering this area will include elements related to the following: A. Supply chain management concepts: A thorough understanding of the roles in a supply chain network and the flow of value through it is required. A broad understanding of the supply chain management processes, objectives, integration, and benefits is also required. Knowledge in thi s area encompasses: 1.
Basic supply chain a. Entities b. Structures c. Flows
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Supply chain management processes—SCOR® model a. Planning demand and supply b. Sourcing goods and services c. Producing goods and services d. Delivering goods and services e. Planning for and processing returns
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Vertical and horizontal integration
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Supply chain management objectives a. Improved customer service b. Efficient use of system-wide resources c. Effective use of system-wide resources d. Leverage of partner strengths
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Competitive advantages
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Business capabilities and strategy a. Organizational strategy b. Prioritization options c. Organizational capabilities d. Alignment of capabilities and strategy
3. Resolving misalignment or gaps 4. Collaboration among trading partners a. Benefits of collaboration b. Requirements for success C. Supply chain design and improvement considerations: The supply chain strategy should be designed with an understanding of the marketplace. It also requires an understanding of supply chain management design and continuous improvement considerations. Knowledge in this area encompasses:
Supply chain management benefits a. Improved market knowledge b. Increased velocity in the flows of goods and services, funds, and information c. Increased visibility of flows d. Reduced variability of flows e. Integrated operations f. Improved management of risk g. Increased sustainability
B. Supply chain alignment with business strategy: The supply chain strategy should align with and enable the business strategy. Achieving appropriate alignment requires an understanding of the forms of competitive advantage being pursued. It also requires an understanding of the organizational strategy, priorities, capabilities, and the resolution of 8 ©2014 APICS The Assoc iatio n for Operation s Management
1. Understanding the marketplace 2. Supply chain design considerations a. Network configuration b. Inventory location and levels c. Product design d. Information technology e. Support systems 3.
Continuous improvement a. Product considerations b. Process improvement initiatives c. Managing change
D. Inventory management: Inventories throughout the supply chain must be planned and controlled for effective supply chain management. Managing inventories, in turn, requires an understanding of the costs of maintaining and not maintaining inventory. Knowledge in this area encompasses: 1. Need for inventory 2. Aggregate and item inventory management 3. Flow of material 4.
Functions of inventory
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Inventory-related cost categories
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Effects of inventory on the financial statements
E. Logistics fundamentals: An understanding of the logistics function is required. Understanding the role of logistics, types of logistics service providers, and reverse logistics is required. Knowledge in this area encompasses: 1. Role of logistics in supply chain management a. Logistics functions b. Logistics value proposition c. Flow of goods and information d. Push, pull, and push-pull systems 2.
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Logistic service providers a. Types of logistics services b. Advantages of using logistics service providers c. Disadvantages of using logistics service providers Reverse logistics a. Activities supported b. Design for reverse logistics c. Benefits
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Components of demand management a. Planning demand b. Communicating demand c. Influencing demand d. Prioritizing demand
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Linkages among the components
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Demand management functional responsibilities and interfaces a. Product development b. Marketing c. Sales d. Operations
H. Customer relationship management (CRM) concepts: Effective customer relationship management includes an understanding of the CRM philosophy. It also requires the understanding of the need, scope, elements, and benefits of CRM. Knowledge in this area encompasses: 1.
F. Market segmentation: An understanding of market segmentation is required. Understanding the reasons for identifying market segments, ways to segment markets, and understanding the wants and needs of each segment is important. Knowledge in this area encompasses:
Need for CRM
2. Scope of CRM 3. Elements of CRM 4. Benefits of CRM 5. Implementing CRM
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Reasons to identify and understand market segments
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Ways to segment markets
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Understanding the wants and needs of each segment
6. Need for, and uses of, customer information in CRM I.
G. Demand planning: An understanding of demand forecasting, the components of demand management, associated linkages, and demand management functional responsibilities and interfaces is required. Knowledge in this area encompasses: 1.
Forecasting demand a. Demand forecasting concepts b. Qualitative methods c. Quantitative methods d. Combination methods e. Measures of forecast error f. Demand management over product life-cycle
Supply management concepts: Effective management of all sources of supply requires an understanding of the components of the total cost of ownership and the considerations in deciding whether to source an item internall y or externally. It also requires an understanding of the types of relationships that can exi st between a firm and its suppliers, the development of supply plans, and supplier relationship management. Knowledge in this area encompasses: 1. Total cost of ownership 2. Make versus buy analysis 3. Range of buyer-supplier relationships 4. Developing supply plans 5. Supplier relationship management (SRM)
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References: 1; 2 (1–6); 3 (1–2, 6–7, 9); 4 (1, 5–8); 5 (1, 3, 5, 8–9, 12), 11
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II. Supply Chain Strategy, Design, and Compliance This section addresses considerations in the design of a competitive supply chain, the processes that support the organization’s strategy, improvement of the sustainability of the organization and its trading partners, and compliance with applicable regulations. Exam questions covering this area will include elements related to the following: A. Sustainability: Designing and operating a supply chain requires an understanding of the concepts of sustainable business practices and how to adapt and apply them to a specific supply chain. Knowledge in this area encompasses:
3. ISO 31000—risk management principles and guidelines C. Globalization: Managing globally di spersed sources of supply and demand requires an understanding of the requirements for operating in m ultiple countries and for moving goods and funds among countries. Knowledge in this area encompasses:
1. Triple bottom line (TBL)—considerations related to conservation and stewardship a. Economic o Micro and macro considerations o Leading and lagging economic indicators Balancing short-term and long-term o performance b. Environmental ISO 14000—environmental o management systems Governmental regulatory compliance o Industry-specific guidelines and o standards o Impact of supply chain decisions c. Social o ISO 26000—guidance for social responsibility o Corporate social responsibility considerations 2.
United Nations Global Compact
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Global Reporting Initiative (GRI)
B. Risk management: Designing a robust supply chain requires recognizing the sources and f orms of risks, the magnitude and potential impact of each, and methods of mitigating each form of risk. Knowledge in this area encompasses: 1. Identification, mitigation, and response to risk a. Forms of risk b. Assessing the risk in a supply chain c. Mitigating significant risks d. Responses to events
Security and regulatory concerns a. Risk of loss of tangible and intangible assets b. Complying with import and export requirements c. Costs and benefits of participating in security partnerships d. Costs and benefits of meeting sustainability regulations e. Product traceability and configuration management
1. Effects of globally dispersed supply and demand a. Export and import participants b. Currency considerations c. Harmonized tariff schedule (HTS) d. Total, or landed, cost of acquisition 2.
Free trade zones a. Definition b. Benefits c. Requirements
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Trading blocs a. Definition b. Effects on supply chains within the bloc c. Effects on supply chains that extend outside the bloc
4. Operational considerations a. Exporting issues b. Importing issues c. Incoterms 5. Implications of globalization a. Legal and regulatory considerations b. Acceptable standards of conduct c. “Glocalization” D. Logistics: An understanding of the total effect that globalization and supply chain management has on inbound and outbound logistics is important. An understanding of trade-offs among warehousing, transportation, and logistics services’ decision making is also required. Knowledge in this area encompasses:
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1. Transportation a. Transportation objectives and considerations b. Stakeholders in transportation decisions c. Modes of transportation d. Considerations in mode selection 2. Warehousing a. Warehousing objectives and considerations b. Warehouse capabilities c. Automated material handling 3.
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Role of technology in supply chain management a. Information system architecture b. Use of information technology in the supply chain c. Comprehensive supply chain management system d. Need for timely and accurate data
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Key application tools a. Enterprise resources planning (ERP) systems b. Advanced planning and scheduling (APS) systems c. Supply chain event management (SCEM) d. Warehouse management systems (WMS) e. Transportation management systems (TMS)
Transportation and warehousing trade-offs a. Public/private b. Owning/leasing assets c. Capacity constraints
E. Managing the supply chain: Managing the supply chain requires an understanding of the dynamics of supply and demand and the need to balance efficiency and responsiveness in the supply chain. It also requires a set of comprehensive measures that are agreed upon and used by the organizations in the supply chain. Knowledge in this area encompasses: 1.
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Indicators of supply chain performance a. Customer-focused metrics b. Financial metrics c. Operational metrics d. Other key performance indicators (KPIs) Responsive versus efficient supply chains a. Attributes of an efficient supply chain b. Attributes of a responsive supply chain c. Supply chain fit with the organization’s market requirements Sales and operations planning (S&OP) a. Relationship to business plan (strategy and economics) b. Reviewing performance c. Evaluating demand levels d. Evaluating supply capability e. Reconciling demand, supply, and financial plans
F. Technology: An understanding of technologies that enable designing, tracking, operating, and communicating among trading partners within a supply chain is necessary. The correct application of appropriate technology is needed for efficient and effective supply chain management. Knowledge in this area encompasses:
3. Data acquisition and communications tools a. Interface devices b. Data communications methods c. Databases—hierarchical/relational/network d. Acquisition and use of data e. Automatic identification technologies 4. Supply chain design and optimization tools a. Supply network design b. Supply network optimization 5. Inter-organization integration tools a. Information technology in collaborations and joint processes b. Standardization c. Challenges 6. Electronic business a. Enabling virtual organizations b. Internet-enabled supply chains c. E-business considerations d. Business-to-business (B2B) commerce and business-to-consumer (B2C) sales G. Influencing and prioritizing demand: A thorough understanding of how the members of a supply chain can influence demand and how they may need to prioritize demand when necessary is required. Knowledge in this area encompasses: 1.
Designing products and services a. Standardization b. Modularization c. Simplification d. Customization e. Sustainability considerations f. Design and development collaboration
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2. Marketing a. Market research b. Demand generation c. Influencing demand
2. Developing and implementing SRM strategies a. Steps in implementing SRM b. Managing risk 3.
3.
Selling
4.
Matching customer orders to supply a. Need for matching b. Approaches to matching 4.
H. Customer relationship management (CRM): Effective customer relationship management includes understanding the underlying concepts; enabling technologies; and requirements for improved demand management, customer service, and alignment of customer-facing processes and resources. Knowledge in this area encompasses: 1.
2.
Developing and implementing CRM as a strategy a. Components of CRM strategy b. Aligning CRM strategy and product or service life cycle c. Creating a CRM strategy d. Developing CRM strategy for various types and segments of customers
J.
Using technology to implement CRM a. Benefits of using a customer data warehouse b. Sales force automation c. Keys to successful CRM implementation
I.
Supplier relationship management (SRM): Successful implementation of supplier relationship management requires an understanding of the underlying concepts, the enabling technologies, and the requirements for improved management of sources of supply. Knowledge in this area encompasses: 1. Supplier selection a. Corporate social responsibility (CSR) b. Negotiations c. Internet-enabled sourcing d. Contract performance e. Alignment with supply chain needs
5.
Measuring SRM
6.
Challenges in implementing SRM
Inventory planning and control: Inventories throughout the supply chain must be planned, located, and controlled for effective supply chain management. Managing inventories in turn requi res an understanding of the total costs of maintaining and not maintaining inventory and the techniques for planning and controlling inventory. Knowledge in this area encompasses: 1.
Inventory planning a. Locations of inventory b. Levels of inventory
2. Inventory control a. Determining order quantities b. Ordering systems c. Safety stock and safety lead time d. Organization of storage locations e. Methods of tracking inventory f. Methods for assessing inventory accuracy
3. Measuring customer service a. Response to inquiries b. Order processing c. Level of service d. Product or service quality e. Customer satisfaction 4. Challenges in implementing CRM
Creating alliances with suppliers a. Characteristics of a successful relationship b. Commitment required for a successful alliance c. Steps in creating and maintaining an alliance Using technology to implement SRM a. Components of a SRM system b. Portals and trading exchanges c. Processes enabled by SRM d. Effects of SRM on the firm and its suppliers
References: 1; 2 (7–10, 16); 3 (1, 3–5, 8–11, 12–13, 17); 4 (1–9); 5 (2–12, 14–15); 6; 8; 9; 11 III. Implementation and Operations This section addresses managing and balancing supply and demand by measuring, analyzing, and improving supply chain processes. Exam questions will include elements related to the foll owing: A. Supply chain dynamics: Managing supply chains requires an understanding of the dynamics of supply and demand and the need to balance efficiency and responsiveness in the supply chain. It also requires a set of measures that are agreed upon and used by the organizations in the supply chain. Knowledge in this area encompasses:
12 ©2014 APICS The Asso ciatio n for Operation s Management
1.
Sources of variability in demand
2.
Sources of variability in supply
3.
Synchronizing supply and demand
o
Order-status reporting
2. Capturing and communicating point-of-sale data a. Capturing data at point-of-sale b. Sharing demand data among trading partners
4. Metrics B. Managing supply from internal sources: Managing supply from internal sources requires an understanding of the operations planning and control processes. Knowledge in this area encompasses: 1.
E. Continuous Improvement: Enhancing the competitiveness of a supply chain requires an understanding of the techniques and tools of continuous improvement and the appropriate application of each. Knowledge in this area encompasses:
Operations planning and control a. Implementation of sales and operations planning (S&OP) b. Controlling priorities c. Materials and inventory d. Capacity management
1.
Continuous improvement philosophies a. Lean b. Six sigma c. Theory of constraints (TOC) d. Total quality management (TQM)
2.
Communicating requirements and priorities
2.
3.
Measuring performance a. Operational measures b. Financial measures
Continuous improvement tools a. Basic seven tools of quality (B7) b. Seven new tools (N7)
3.
Sustainability tools a. Life cycle assessment b. ISO 14001 c. Global Reporting Initiative (GRI) d. Sustainability scorecards
C. Managing supply from external sources: Managing supply from external sources requires an understanding of the basic purchasing processes, selecting suppliers, and evaluating suppliers. Knowledge in this area encompasses:
References: 1; 2 (11–-16); 3 (9–11, 14–15); 5 (2, 4, 7, 12); 7; 8, 9, 11
1. Communicating requirements and priorities
Key Terminol ogy
2. Supplier performance management a. Ethical and legal considerations b. Negotiations c. Contract issues d. Internet-enabled sourcing e. Scorecards and performance metrics
An understanding of the following list of terms is recommended. The list is intended to be thorough but not exhaustive. The candidate is also expected to be familiar with the definitions of terms identified in the content outline. Definitions of these terms can be f ound in the APICS Dictionary, 14th edition.
3. Supplier certification a. Customer and supplier benefits b. Third-party certification c. Supplier certification process
A active tag advanced planning and scheduling (APS) agent alliance development anticipation inventories assemble-to-order automatic identification and data capture (AIDC) available-to-promise (ATP)
D. Implementation of demand plans: Requires an understanding of the methods for prioritizi ng and fulfilling demand. Knowledge in this area encompasses: 1.
Demand prioritization a. Time fences b. Allocation of supply c. Measures of customer service levels Fill rates o Lead-time monitoring o
B balanced scorecard blanket purchase order buffer business intelligence business-to-business commerce (B2B) business-to-consumer sales (B2C) CSCP Exam Cont ent Manual 13
business process management (BPM)
H harmonized system classification codes horizontal marketplace hypertext markup language (HTML) hypertext transfer protocol (HTTP)
C capable-to-promise (CTP) cash-to-cash cycle time collaborative planning, forecasting, and replenishment (CPFR) configuration management system consortia trade exchanges (CTX) content management applications continuous replenishment cost of quality cross-docking cross-selling customer relationship management (CRM) customer service ratio cycle time
I incoterms independent demand information system architecture interplant demand intranet inventory optimization software inventory valuation inventory velocity inventory visibility ISO 14000—environmental management systems ISO 26000—guidance for social responsibilit y ISO 31000—risk management principles and guidelines
D database management system (DBMS) data cleansing data dictionary data normalization data warehouse define, measure, analyze, improve, control (DMAIC) process demand forecasting demand management demand planning demand pull demand shaping design for the supply chain distribution inventory distribution requirements planning (DRP)
J joint replenishment system joint venture K kaizen kaizen event kanban keiretsu key performance indicator (KPI) L landed cost legacy systems level of service level strategy life-cycle analysis line haul costs
E electronic commerce (e-commerce) electronic data interchange (EDI) electronic document electronic product codes (EPCs) end-of-life management enterprise resources planning (ERP) environmentally responsible business environmentally responsible manufacturing environmentally sensitive engineering extensible markup language (XML) extranet
M
F feedback file transfer protocol (FTP) fill rate G Global Reporting Initiative (GRI) global strategy glocalization 14 ©2014 APICS The Assoc iation fo r Operation s Management
make-to-order make-to-stock market demand market research market share master production schedule (MPS) middleware mix forecast modular design strategy modular system multicountry strategy multisourcing
O
T ordering cost order losers order qualifiers order winners outsourcing
tactical buying tariff third-party logistics (3PL) total cost of ownership (TCO) trade bloc trading bloc transportation management system (T MS)
P Pareto analysis partnership passive tag pipeline inventory planning horizon portal private trading exchange (PTX) product differentiation product family product life cycle pull system push system Q
U universality V value-added value-added network (VAN) value chain value stream value stream mapping vendor-managed inventory (VMI) virtual trading exchange W
quality function deployment (QFD) quick response program (QRP)
warehouse management system (WMS) waste web services
R radio frequency identification (RFID) rapid replenishment return on assets (ROA) return on i nvestment (ROI) reverse auction reverse logistics reverse supply chain risk pooling
S seasonality semipassive tag service industry service-oriented architecture (SOA) single-source supplier software-as-a-service (SaaS) sole-source supplier sourcing spend management stockkeeping unit (SKU) strategic alliance strategic planning strategic sourcing subcontracting supplier certification supply chain event m anagement (SCEM) supply chain m anagement (SCM) supply chain risk supply chain visibility
X XML (extensible markup language)
Supplemental Glos sary
The following concepts, not found in the APICS Dictionary, 14th edition, will be helpful in preparing for the CSCP examination. Global Trade Management: The management and optimization of shipments across international borders including: ensuring compliance with all international regulations and documentation, streamlining and accelerating the movement of goods, while minimizing the global supply chain costs within and outside of the organization.
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Bibliography All test candidates should familiarize themselves with the following references for this examination. The recommended references pertaining to the diagnostic area are listed at the end of each section of the content outline. All of these references are av ailable from the APICS Bookstore. 1. APICS Dictionary, 14th ed., 2013. 2. Bowersox, Donald, David Closs, and M. Bixby Cooper. Supply Chain Logistics Management, 4th ed., McGraw-Hill, 2010. 3. Crandall, Richard, William Crandall, and Charlie Chen. Principles of Supply Chain Management, CRC Press, 2010. 4. Ross, David F. Introduction to Supply Chain Management Technologies, 2nd ed., CRC Press, 2010. 5. Simchi-Levi, David, Philip Kaminsky, and Edith Simchi-Levi. Designing & Managing the Supply Chain, 3rd ed., McGraw-Hill Irwin, 2008. 6. United Nations Global Compact: Corporate Sustainability in the World Economy. 2011. UN Global Compact Office. http://www.unglobalcompact.org/docs/news_events/ 8.1/GC_brochure_FINAL.pdf 7. UN Global Compact Management Model: Framework for Implementation. 2010. Deloitte Touche Tohmatsu. Welcome message by Georg Kell. Foreword by John Connolly. http://www.unglobalcompact.org/docs/news_events/ 9.1_news_archives/2010_06_17/UN_Global_Compa ct_Management_Model.pdf 8. The G3.1 Guidelines. Global Reporting. http://www.globalreporting.org/resourcelibrary/G3.1Sustainability-Reporting-Guidelines.pdf 9. GRI Sustainability Report Guidelines—Reference Sheet. http://www.globalreporting.org/resourcelibrary/G3.1Quick-Reference-Sheet.pdf 10. Security Risk Assessment for Transport Operators: A practical guide for small to medium-sized organisations. 2012. Department of Transport, Planning and Local Infrastructure. http://www.transport.vic.gov.au/__data/assets/pdf_fil e/0010/67699/security-risk-assessment-guide-fortransport-operators.pdf 11. Additional reference materials that are relevant to the CSCP body of knowledge can be found at apics.org/cscp. Questions appearing on the exam may be based on these addi tional references. Internet links cited in the bibliographic references above can be found in a more usable format on the APICS website at apics.org/cscp.
16 ©2014 APICS The Assoc iation fo r Operation s Management
Sample Questions The following ten questions are similar in format and content to the questions on the CSCP exam. These questions are intended for practice—that is, to enabl e you to become familiar with the way the questions are asked. The degree of success you have in answering these questions is not related to your potential for success on the actual exam, and should not be interpreted as such. Read each question, select an answer, and check your responses with the explanations on pages 19–20. 1. Which of the following is the primary advantage of using web-based electronic data i nterchange (EDI) for communication of transactions? (A) (B) (C) (D)
There is more flexibility in transaction formats. It lowers the cost per transaction. It eliminates translation of transactions. A larger number of transactions are supported.
(C) Sales force automation (D) Artificial intelligence 6.
(A) (B) (C) (D) 7.
8.
(A) (B) (C) (D)
perform its shipping and receiving functions. produce and deliver a major subassembly. provide payroll services. act as a sales agent in another country.
4. Which of the following is an expected benefit of implementing supply chain event management? (A) It will reduce the need for supply chain performance reporting. (B) It will improve forecasting accuracy. (C) It notifies partners when a deviation from plans occurs. (D) It reduces the cost of communications between partners. 5. Which of the following applications would enable a company to detect patterns in the preferences of a customer segment?
Which of the following types of inventory is used to protect against variations in supply and/or demand?
Which of the following is typically a characteristic of strategic sourcing? (A) It includes automation of contract management processes. (B) It reduces the price of goods and services. (C) A supplier receives all of the company’s orders for a product or product family. (D) The focus of the relationship is on large transactions.
it depends on customer perception. there are many quality philosophies. it is everyone’s responsibility. quality targets change frequently.
3. An example of the use of a third-party logistics (3PL) company would be when a company contracts with another company to
recovers its investment in plant and equipment. manages assets to generate cash flow. converts inventory into sales. collects on sales to customers.
(A) Cycle stock (B) Transportation inventory (C) Safety stock (D) Anticipation inventory
2. Quality remains an elusive concept in most organizations because (A) (B) (C) (D)
Cash-to-cash cycle time is a measure of how efficiently a company
9.
Which of the following measures would be most appropriate for trading partners to use to assess the delivery performance of the manufacturer of items built to forecast? (A) Percentage of items shipped within the final assembly lead time. (B) Percentage of orders shipped complete within 24 hours of their receipt. (C) Number of items shipped within 24 hours of their receipt. (D) Revenue from orders shipped in a week.
10. Which of the following is an expected benefit of collaborative supply chain m anagement? (A) (B) (C) (D)
Maximizing the performance of the firm Reducing the number of competitors Increasing scope of operations Synchronizing supply and demand
(A) Business intelligence (B) Advanced planning system CSCP Exam Cont ent Manual 17
Answers to Sample Questions
5.
A (IIH2) A is the best choice because business intelligence applications collect, organize, and analyze information. Use of these appli cations on customer data would allow the c ompany to detect patterns in the data. B is not the best choice because advanced planning systems address operations rather than customers. C is not the best choice because sales force automation does not capture or organize the data required to detect patterns in customer preferences. D is not the best choice because artificial intelligence applications are intended to learn and reason like humans to address specific problems.
6.
B (IA5) B is the best choice because the definition of cash-to-cash cycle time is that it is an indicator of how efficiently a company manages assets to improve cash flow. It is the inventory days + accounts receivable days – accounts payable days. A is not the best choice because cash-to-cash cycle time does not consider the investment in plant and equipment. C is not the best choice because it is limited to the inventory days com ponent of cash-tocash cycle time. D is not the best choice because it is limited to the accounts receivable component of cash-to-cash cycle time.
Note: References to the content outline appear in parentheses. 1. B (IIF1) B is the best choice because a web-based EDI system would eliminate the cost of a private or value-added network. A is not the best choice because the EDI transaction formats are independent of the network used for transmission. C is not the best choice because the transactions still must be translated to and from the standardized format. D is not the best choice because the standards are independent of the transmission method used. 2. A (IIIE) A is the best choice because the customers are the ultimate judges of quality and they may have differing requirements and priorities. B i s not the best answer because the philosophies have similar definitions of quality and address how to improve it. C is not the best choice because the fact that it is everyone’s responsibility has nothing to do with the concept of what is quality. D is not the best choice because targets should change once they have been achieved. 3. A (IE2) A is the best choice because a 3PL company is a company that manages part or all of a company’s product delivery operations and shipping is part of the product delivery operations. B is not the best choice because neither producing the subassembly nor delivering it is part of the company’s product delivery operations. C i s not the best choice because payroll services are not a part of the company’s product delivery operations. D is not the best choice because selling does not necessarily include any delivery operations. 4. C (IIF2) C is the best choice because supply chain event management monitors the supply chain and notifies designated individuals when specified events or exceptions occur or when trends are recognized. A is not the best choice because it enables performance reporting but does not reduce the need for it. B is not the best choice because supply chain event management itself does not affect any specific appli cation. D is not the best choice because supply chain event management does not directly affect the amount or cost of communications among partners.
7. C (ID) C is the best choice because safety stock is maintained to protect against variability in either supply or demand. A is not the best choice because cycle stock is related to lot sizing. B is not the best choice because transportation inventory is i nventory that is in transit between locations. D is not the best choice because anticipation inventory is inventory held to cover trends or planned events, such as promotions or plant shutdown. 8. A (II) A is the best choice because strategic sourcing focuses on the long-term relationship and, from an information technology perspective, typically includes automation of contract management. B is not the best choice because the focus is on the total cost of ownership rather than on the quoted price. C is not the best choice because strategic sourcing can include contracting with more than one partner for a part or family of parts to reduce the risk of disruptions. D is not the best choice because the focus of the relationship is on a long-term relationship between the partners rather than on individual transactions.
18 ©2014 APICS The Asso ciatio n for Operation s Management
9. B (IIIB3) B is the best choice because the items are being produced to forecast and should be shipped from stock shortly after receipt of the order. A is not the best choice because the final assembly lead time should not be needed before shipment because the items are produced to f orecast. C is not the best choice because it is a measure of the number of items shipped and there is no indication of the actual number of items that were ordered. D i s not the best choice because revenue is a financial measure, but does not indicate delivery performance. 10. D (IIIA) D is the best choice according to the APICS Dictionary definition of supply chai n management. A is not the best choice because SCM should improve the performance of the entire chain, not a single member of the chain. B is not the best choice though it may be an outcome of collaborative supply chain management. C is not the best choice because there is no direct relationship between collaborative supply chain management and the scope of operations for one of the partners.
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apics.org
