L5M6 Exam Dumps : Category Management

The two most important factors when assessing supply chain risks are Severity and Likelihood. These are typically measured on a scale [e.g., 1–5], with the product of the two giving a risk score.

Severity measures the potential impact on the organisation if the risk materialises. For example, supplier insolvency may severely disrupt operations.

Likelihood assesses the probability of the event occurring.

The combination of severity × likelihood determines whether a risk is low, medium, or high, and informs mitigation strategies.

Other options are less central:

Location may influence likelihood but is a sub-factor.

People involved is not a formal assessment criterion.

Cost can be a consequence but is part of severity, not a separate factor.

Using severity and likelihood ensures risks are prioritised based on both impact and probability, allowing category managers to allocate resources effectively.

[Ref: CIPS L5M6 Study Guide, p.40 – Risk assessment and mitigation protocols]

Leverage items [low supply risk, high financial impact] are best suited for e-auctions. Buyers can use competitive bidding to drive down prices when multiple suppliers exist.

By contrast:

Bottleneck items [low value, high supply risk] are not suited as choice is limited.

Strategic items require partnership and collaboration, not price-only competition.

Non-critical items don’t justify the effort of auctions.

[Ref: CIPS L5M6 Study Guide, p.97 – Kraljic Portfolio Matrix]

The three key enablers are People, Tools, and Technology. Each plays a distinct but interconnected role in making category management effective:

People: Skilled category managers and cross-functional teams provide the expertise, negotiation skills, and stakeholder engagement needed for success. Without trained professionals, strategies cannot be executed effectively.

Tools: Analytical frameworks like Kraljic’s Matrix, spend analysis, TCO, and risk assessment tools enable informed decision-making. These provide structure and evidence for procurement strategies.

Technology: Digital platforms such as e-procurement systems, data analytics software, and supplier relationship management [SRM] tools support efficiency, transparency, and scalability.

By contrast, options such as “Place” and “Environment” are not formal enablers within CIPS’s framework. While environmental and cultural context matter, they are not listed as the three foundational enablers.

The study guide emphasises that category management can only be effective when these three enablers work together—skilled people using appropriate tools and supported by the right technology.

[Ref: CIPS L5M6 Study Guide, p.6 – Enablers of Category Management]