ISM\'s Newest Professional Credential

1. “The CPSM (Certified Professional in Supply Management) – The Key to
Effective Supply Management”
James D. Reeds
C.P.M., CPSM, CFPIM, CIRM, CPCM
President, Learning Solutions International
and
Past President, ISM Silicon Valley, Inc.
Introduction:
It has been said, quot;Language is the dress of thought.quot;1 This is especially true
today, as the tumult of global business requires that Supply Management
professionals constantly expand and upgrade their competencies and skills.
The very term, Supply Management is a reflection of this simultaneous
dilemma and challenge. It is a dilemma because it is a relatively new term or
conceptual framework that requires serious rethinking of what the concepts of
purchasing, procurement, strategic sourcing, contract management, supply
chain management, logistics, and other related terms mean. It is a challenge,
too, for both business enterprises and individuals professionals in these fields
to grasp a way forward in the contexts of personal growth and development and
what business needs in its Supply management talent pool to remain
competitive and profitable. This article will suggest that the concept of Supply
Management, as offered by the Institute for Supply Management (ISM) most
accurately meets the growth and development needs of professionals
responsible for these historically varied yet related disciplines. Likewise, a
more precise understanding by business enterprises of Supply Management
and its Body of Knowledge is no less a high priority. Further, ISM’s new
professional credential, the Certified Professional Supply Manager (CPSM),
offers a serious framework for a more thorough understanding of Supply
Management.
A Definition of Supply Management:
The Institute for Supply Management (ISM) defines Supply Management1
as:
The identification, acquisition, access, positioning, management of
resources and related capabilities the organization needs or potentially
needs in the attainment of its strategic objectives.
During the development of its new professional credential, The CPSM – [Certified
Professional in Supply Management], ISM added the following fourteen
components to the definition2:
Supply Management Components.4
1

2. Disposition/Investment Recovery
Distribution
Inventory Control
Logistics
Manufacturing Supervision
Materials Management
Packaging
Product/Service Development
Purchasing/Procurement
Quality
Receiving
Strategic Sourcing
Transportation/Traffic/Shipping
Warehousing
The addition of these fourteen components effectively helped to set the
‘boundaries’ of the Supply Management Body of Knowledge (BOK) framework.
This clarification has identified the functional areas and processes of a business
necessary to effectively manage its supply chains, supply networks and value
chains.
Why Supply Management?
In a March 10, 2008 article in the Wall Street Journal, “Beyond Buying,” Supply
Management thought leaders Larry C. Giunipero, Robert B. Handfield, and
Douglas L. Johansen offered a rationale for the imperative of a Supply
Management framework5:
Traditionally, these managers have been little more than purchasing officers.
They dealt with a relatively small group of familiar suppliers, and had few overall
goals beyond squeezing out as many price cuts as possible. Now, as companies
globalize and outsourcing spreads, supply-chain managers must make decisions
involving networks of partners in far-flung corners of the world. Meanwhile, a
fierce competitive marketplace is driving companies to collaborate with suppliers
to help them develop products more quickly and reduce waste in the supply
chain. Technology is also pushing suppliers and clients closer, making it easier to
keep tabs on orders and share information. Specifically, supply-chain managers
must be able to handle increasingly complex and critical technology. They must
know how to source jobs globally, and be familiar with the ins and outs of various
markets. They must have strong management skills, to handle everything from
building relationships with suppliers to creating in-house teams to solve
problems. And they must be trained in making crucial strategic decisions, such
as when to turn to suppliers for help in lowering the total cost of a product.
A survey conducted as a part of the Wall Street Journal article highlighted the
expanded skills needed to effectively manage today’s supply chains6:
2

3. The percentage of surveyed supply-chain managers saying the
following skills or approaches are required by the rapid
transformation of their field
MANAGING TECHNOLOGY
Electronic procurement/reverse auctions 39%
Integrated systems and collaboration 38%
Internal systems integration 36%
BUILDING TEAMS
85%
Strategic relationship management
Cross-functional/virtual teams 43%
Customer relationship building (internal/external) 33%
FINDING SUPPLIERS GLOBALLY
Outsourcing Services 40%
23%
Global Sourcing Strategies
Training approaches for global environment 21%
BIG PICTURE VIEW
Strategic cost reduction 63%
Greater focus on total cost in supplier selection 46%
Strategic vs. tactical orientation 42%
Broader general business skills 35%
Supply-chain business process focus 34%
The Institute for Supply Management (ISM) - Certified in Supply
Management Professional (CPSM): A Focus on Talent and Skills:
In order to meet the daunting skills challenge, the Institute for Supply
Management (ISM) began a methodical campaign to move away from the
various, confining concepts inherent in the term, ‘purchasing’ (and similar
traditional terminology) to a more precise reflection of the needs of business and
professionals in the field. In 2003, this meant a change in the identity of ISM
itself: from the National Association of Purchasing Management, to The Institute
for Supply Management. Following this change, the design and delivery of an
advanced professional credential was deemed necessary. The decision to
implement a more rigorous professional credential, the Certified Professional in
Supply Management (CPSM) was inaugurated, with the first pilot exams offered
in the spring of 2008.
Along with an expanded Body of Knowledge, The requirements for the CPSM
were also advanced well beyond those of its earlier professional credential, the
Certified Purchasing Manager (C.P.M.). The minimum criteria for the CPSM
qualification are7
Three years full-time, professional supply management experience
•
(nonclerical, nonsupport).
A Bachelors’ degree from a regionally accredited institution or
•
international equivalent.
3

4. Pass Three CPSM Exams:
•
o Exam 1. Foundation of Supply Management
o Exam 2. Effective Supply Management Performance
o Exam 3. Leadership in Supply Management
OR if you are a C.P.M. in good standing, pass a single Bridge Exam8.
•
A Breakdown of the CPSM Body of Knowledge through each of it three
examinations is a useful indicator of how the new competencies/skills required to
lead Supply Management is instructive:
Exam 1: Foundation of Supply Management
Section Name # of Questions
Cost & Finance 32
Contracting and
32
Negotiation
17
International
14
Social Responsibility
20
Sourcing
Supplier Relationship
35
Mgmt.
150
Exam 2: Effective Supply Management Performance
Section Name # of
Questions
Forecasting 19
19
Logistics
19
Materials and Inventory Mgmt.
26
Organization/Dept. Assessment
15
Planning
12
Project Mgmt.
19
Product Development
21
Quality
150
4

5. Exam 3: Leadership in Supply Management
# of
Section Name
Questions
Leadership 96
32
Risk and Compliance
37
Strategic Sourcing
165
A casual review of the CPSM examination Body of Knowledge (components are
termed ‘Tasks’ by ISM) reveals a heavy emphasis on areas of leadership,
strategy formulation and execution, and strategic sourcing, as well as ‘new’
knowledge areas such as Project Management and Risk Management and the
host of competencies related to Logistics, Material and Capacity Management,
Inventory Management and Advanced Planning.
ISM’s CPSM credential is one sure way to help ensure that the concept of Supply
Management gains a sure foothold in the formulation of business enterprise
strategies as well as in the career development roadmaps of professionals in the
field.
To reinforce this thinking, ISM offers the definition of just what traits characterize
a Supply Management Professional9:
A supply management professional is an individual who provides leadership by
aligning resources to define and satisfy diverse internal and external customer
needs through the acquisition and ongoing management of materials and
services.
The Way Forward
Either as a professional in the traditional fields of purchasing, procurement or
other similar fields or as a business enterprise that seeks to remain
competitive and grow in profitability, there must be a reframing of thought of
what is required to embrace the concept of Supply Management. Such a new
framework goes well beyond the traditional optimization of internal functions
and processes within a firm. It especially means a new outward focus
outward and into a firm’s supply chains, supply networks, and value chains.
One sure approach for an individual to add value to their career development
and growth is to attain the CPSM credential. Even if this goal may not be
possible for all, at least seek an in-depth Understanding of the ISM CPSM
Body of Knowledge.
5

6. For business enterprises, the best approach is to encourage the development
of Supply Management competencies and skills among its supply
Management professionals. The CPSM credential, and/or a demonstration of
the competencies of the CPSM Body of Knowledge should be reflected in the
personal mastery or KPI metrics of its Supply Management professionals.
For Further Reading:
The Supply Management Handbook. 7th edition. Joseph Cavinato, Anna E.
Flynn and Ralph G. Kauffman, Eds. McGraw-Hill. New York, N.Y. 2006. ISBN 0-
07-144513-7.
Foundation of Supply Management. Joseph R. Carter, and Thomas Y. Choi.
ISM Professional Series. Institute for Supply Management (ISM). Tempe,
Arizona. 2008. ISBN 978-0-9815770-2-9.
Effective Supply Management Performance. Darin L. Matthews, and Linda L.
Stanley. ISM Professional Series. Institute for Supply Management (ISM).
Tempe, Arizona. 2008. ISBN 978-0-9815770-1-2.
Leadership in Supply Management. Anna E. Flynn, Ph.D. ISM Professional
Series. Institute for Supply Management (ISM). Tempe, Arizona. 2008. ISBN
978-0-9815770-0-5.
Endnotes:
1
Samuel Johnson, The Lives of the Eminent English Poets: Cowley. Lives of the English Poets
(1779-81).
2
Carter, Joseph R. and Thomas Y. Choi. Foundation of Supply Management. ISM
Professional Series. Institute for Supply Management (ISM). Tempe, Arizona. 2008. P. vii. See
also: Cavinato, Joseph L., “Supply Management: ISM’s Leadership View,” in The Supply
th
Management Handbook. 7 edition. Joseph Cavinato, Anna E. Flynn and Ralph G. Kauffman,
Eds. McGraw-Hill. New York, N.Y. 2006. pp. 7-8.
3
CPSM Study Guide. Exam 1. Foundation of Supply Management. Robert B. Handfield,
Ph.D. Editor. Institute for Supply Management (ISM). Tempe, Arizona. 2008. p. ix.
4
“ISM Supply Management Definition and Related Components”. ISM, Tempe Arizona.
November 17, 2007.
5
Giunipero, Larry C., Robert B. Handfield, and Douglas L. Johansen, “Beyond Buying,” The Wall
Street Journal. March 10, 2008. Dr. Giunipero is professor of marketing and supply-chain
management at Florida State University's College of Business. Dr. Handfield is Bank of America
university distinguished professor of supply-chain management at North Carolina State
University's College of Management and director of the Supply Chain Resource Cooperative. Mr.
Johansen is a doctoral student at Florida State University's College of Business.
6

7. http://online.wsj.com/article/SB120468020097412051.html
6
Ibid.
7
Certified Professional in Supply Management (CPSM) Program FAQs.
http://www.ism.ws/certification/content.cfm?ItemNumber=5723&navItemNumber=5719 - FAQ1
8
The CPSM Bridge Exam is three-hour examination that spans the Body of Knowledge of the
CPSM designed to help “Bridge” qualified Certified Purchasing Managers (C.P.M.s) to the CPSM
credential who have maintained their eligibility through ISM (i.e. are in ‘good standing’).
9
CPSM Study Guide. Exam 1. Foundation of Supply Management. Robert B. Handfield,
Ph.D. Editor. Institute for Supply Management (ISM). Tempe, Arizona. 2008. p. x.
7