SCM 406 Exam 1 2026/2027 Updated
Version | Comprehensive Study Guide,
Verified Questions & Detailed
Rationales for Top Performance
Major Strategic Procurement Decisions - ANSWER-To identify, select, and develop
suppliers
To measure supplier performance
To foster collaborative buyer-supplier partnerships
To supply globally and/or locally
To promote sustainability among global suppliers
To be socially responsible in the supply chain
SCM 406 topics - ANSWER-Economic Impact
1. Challenges (BSR, Supplier Evaluation & Selection)
2. Tools (JIT, Six Sigma, ISO 9000)
Environmental & Social Impact
3. Opportunities (global sourcing, environmental sustainability, CSR)
Why is procurement a critical business area? - ANSWER-1. Consumes a large
portion of company resources
2. Reinforces and/or weakens the company's brand
,3. Directly impacts profitability of the enterprise
How much do we spend in procurement? - ANSWER-Procurement holds the
company's wallet
*Procurement Costs/% of Revenue on Procurement:
-IBM: $42.4Bn/52%
-ChevronTexaco: ~$17Bn/~16%
-Dell: $26Bn/82%
-Delta Airlines: $7Bn/50%
-etc
Can procurement endanger a firm's brand? - ANSWER-2019: excessive temporary
workers in Foxconn
2017: Illegal overtime by school-age interns in Foxconn
2015: Student workers in Dell suppliers' facilities
2013: 1,100 people died in the collapse of Bangladesh factory supplying Apple
(labor and safety rights)
2010-12: the scandal involving high suicide rates at Foxconn's factory, a supplier of
Apple (working conditions, safety wages)
Stock market reaction to supply chain glitches - ANSWER-supply chain disruptions:
-7.2%
excess inventory: -6.9%
product introduction delays: -12.8%
,How does purchasing work? - ANSWER-Corporate Strategy >
Purchasing Strategy>
Supplier Relationship Mgmt, Supplier Development Programs, Global Sourcing,
Risk Mgmt, Sustainable Purchasing
1st step to making procurement decisions - ANSWER-knowing the corporate
strategy
ex. Walmart- low cost; Amazon- on time delivery and flexibility
Why might a supply chain professional be the best candidate for CEO? - ANSWER--
visibility to the entire supply chain
-synchronizes efforts cross-functionally
What are the main characteristics of a successful supply chain professional? -
ANSWER-influencing skills
developing leaders & teams
customer-centrism
results orientation
emotional fortitude
How can we expand the Supply Chain brand? - ANSWER-Balance Strategy and
Tactics- SC strategy and vision development
Balance Cost and Revenue- innovation and revenue
Emphasize Inspirational Leadership- not just technical
, What are the major challenges that supply chain professionals face in their
positions to be promoted to the top mgmt/CEOS? - ANSWER-View SC as tactical,
cost-focused, technical
Not traditional path to CEO
Purchasing leader characteristics - ANSWER-Influential, Capable, Innovative
Council of SCM Professional (CSCMP) - ANSWER-one of the preeminent worldwide
professional associations of SCM professionals
Mission: to lead the evolving SCM profession by developing, advancing, and
disseminating SC knowledge and research
Institute for Supply Management (ISM) - ANSWER-largest supply management
association in the world as well as one of the most respected
Mission: to lead the supply management profession through its standards of
excellence in research, promotional activities, and education
> 40K professionals
The Association for Operations Management (APICS) - ANSWER-global leader and
premier source of the body of knowledge in supply chain and operations
management, including production, inventory, materials mgmt, purchasing, and
logistics
Mission: to build and validate knowledge in SC and operations mgmt. Enable our
community of members, affiliates, and customers to lead in the global
marketplace.
Version | Comprehensive Study Guide,
Verified Questions & Detailed
Rationales for Top Performance
Major Strategic Procurement Decisions - ANSWER-To identify, select, and develop
suppliers
To measure supplier performance
To foster collaborative buyer-supplier partnerships
To supply globally and/or locally
To promote sustainability among global suppliers
To be socially responsible in the supply chain
SCM 406 topics - ANSWER-Economic Impact
1. Challenges (BSR, Supplier Evaluation & Selection)
2. Tools (JIT, Six Sigma, ISO 9000)
Environmental & Social Impact
3. Opportunities (global sourcing, environmental sustainability, CSR)
Why is procurement a critical business area? - ANSWER-1. Consumes a large
portion of company resources
2. Reinforces and/or weakens the company's brand
,3. Directly impacts profitability of the enterprise
How much do we spend in procurement? - ANSWER-Procurement holds the
company's wallet
*Procurement Costs/% of Revenue on Procurement:
-IBM: $42.4Bn/52%
-ChevronTexaco: ~$17Bn/~16%
-Dell: $26Bn/82%
-Delta Airlines: $7Bn/50%
-etc
Can procurement endanger a firm's brand? - ANSWER-2019: excessive temporary
workers in Foxconn
2017: Illegal overtime by school-age interns in Foxconn
2015: Student workers in Dell suppliers' facilities
2013: 1,100 people died in the collapse of Bangladesh factory supplying Apple
(labor and safety rights)
2010-12: the scandal involving high suicide rates at Foxconn's factory, a supplier of
Apple (working conditions, safety wages)
Stock market reaction to supply chain glitches - ANSWER-supply chain disruptions:
-7.2%
excess inventory: -6.9%
product introduction delays: -12.8%
,How does purchasing work? - ANSWER-Corporate Strategy >
Purchasing Strategy>
Supplier Relationship Mgmt, Supplier Development Programs, Global Sourcing,
Risk Mgmt, Sustainable Purchasing
1st step to making procurement decisions - ANSWER-knowing the corporate
strategy
ex. Walmart- low cost; Amazon- on time delivery and flexibility
Why might a supply chain professional be the best candidate for CEO? - ANSWER--
visibility to the entire supply chain
-synchronizes efforts cross-functionally
What are the main characteristics of a successful supply chain professional? -
ANSWER-influencing skills
developing leaders & teams
customer-centrism
results orientation
emotional fortitude
How can we expand the Supply Chain brand? - ANSWER-Balance Strategy and
Tactics- SC strategy and vision development
Balance Cost and Revenue- innovation and revenue
Emphasize Inspirational Leadership- not just technical
, What are the major challenges that supply chain professionals face in their
positions to be promoted to the top mgmt/CEOS? - ANSWER-View SC as tactical,
cost-focused, technical
Not traditional path to CEO
Purchasing leader characteristics - ANSWER-Influential, Capable, Innovative
Council of SCM Professional (CSCMP) - ANSWER-one of the preeminent worldwide
professional associations of SCM professionals
Mission: to lead the evolving SCM profession by developing, advancing, and
disseminating SC knowledge and research
Institute for Supply Management (ISM) - ANSWER-largest supply management
association in the world as well as one of the most respected
Mission: to lead the supply management profession through its standards of
excellence in research, promotional activities, and education
> 40K professionals
The Association for Operations Management (APICS) - ANSWER-global leader and
premier source of the body of knowledge in supply chain and operations
management, including production, inventory, materials mgmt, purchasing, and
logistics
Mission: to build and validate knowledge in SC and operations mgmt. Enable our
community of members, affiliates, and customers to lead in the global
marketplace.
