The unit applies to those engaged in specialist procurement and contracting roles and is equally applicable to those in broader logistics roles.
Elements and Performance Criteria
1 Plan for category management
1.1 Identify and assess organisational structures and business requirements from corporate planning documents in the context of suitability to adopt category management approaches for procurement and contract management.
1.2 Develop and use effective communication strategies to engage with internal stakeholders, external and market stakeholders about category management approaches, product/services to be category managed, market and supply chain conditions.
1.3 Develop a category management plan based on category management principles for each category to be managed that includes outcome based, transparent and manageable performance metrics for category managed items and services.
1.4 Obtain senior management approval for the category management plan.
1.5 Develop outcome based processes and guidelines to support category management.
1.6 Identify staff skills and training and development opportunities related to category management and incorporate these into professional development plans.
1.7 Identify and interrogate organisational Enterprise Resource Planning (ERP) and document management systems in order to gather and analyse data pertaining to the level of spend on various procurement types.
2 Define categories
2.1 Identify and analyse current procurement options adopted by the organisation and other procurement options that are available in the marketplace.
2.2 Identify market, procurement and contract management trends, opportunities and risks relevant to categories.
2.3 Identify and engage relevant internal stakeholders to assist in defining categories.
2.4 Define procurement categories using a recognised basis.
2.5 Identify and implement appropriate systems to support category and contract managers.
3 Implement category management
3.1 Develop market strategies for categories and act on them as appropriate to the organisation.
3.2 Implement the category management plan.
3.3 Implement strategies to manage and maintain productive relationships with identified suppliers.
3.4 Resolve operational issues raised by contract users and suppliers.
3.5 Capture and analyse data from a range of sources about the category performance against the performance metrics on a regular basis and report category performance to appropriate corporate systems.
3.6 Regularly review buying organisation, industry and market category positions to identify trends, opportunities and risks and adjust direction as indicated by the results of the review.
4 Review category management
4.1 Review and monitor performance metrics on a regular basis to ensure efficiency and effectiveness is achieved and maintained in category management processes.
4.2 Consult appropriately with stakeholders, provide performance feedback and recommend corrective or improvement actions as necessary.
4.3 Monitor buying organisation, industry and market performance and ensure organisational strategies are modified where appropriate.
4.4 Monitor staff skills and provide appropriate skilling upgrades.
communication skills to:
consult and negotiate with the marketplace, contractors and stakeholders
network, within probity boundaries, with the marketplace, contractors and stakeholders
develop a business case
interpret complex documents, such as contracts, legislation and policy guidelines
research skills to:
gather and analyse organisational data
gather and analyse market data
gather and analyse stakeholder requirements
review and apply legislative, regulatory and policy requirements
identify, analyse and predict trends
change management skills to:
plan, monitor and implement change management strategies
garner support from management
promote change within the organisation
measure and monitor performance
teamwork skills to:
model effective team management approaches
support professional development and learning in team members
respond to diversity
respond to and manage issues that arise
initiative and enterprise skills to:
apply the content of complex documents such as contracts, legislation and policy guidelines
ensure compliance with legislative and mandated policy requirements including OH&S and environmental obligations, sustainability and corporate social responsibility practices and principles in the context of planning procurement and sourcing outcomes
ensure compliance with complex government policy and inter-governmental agreements
interrogate corporate systems, such as Financial Management Information Systems (FMIS ) or asset management system to obtain data
analyse complex supply chains to identify risk, vulnerability and legality
seek and interpret market reaction
develop effective performance measurement metrics
planning and organising skills to:
undertake research and business analysis
plan procurement processes in alignment with organisational and business outcomes
document procurement planning decisions and anticipated outcomes
manage and update procurement plans and sub-plans in line with organisational, strategic and budget planning documents
apply complex strategies to develop organisational plans, including corporate, budget and procurement plans and sub plans
learning and development skills to:
stay abreast of best practice models relevant to procurement, contracting, logistics and enterprise market management
remain current with legislation, regulation, policy, government agreements and relevant legal decisions
technological skills to:
understand systems architecture
identify needs from ERPs
exploit organisational ERPs
develop and manage electronic commerce
exploit market opportunities and initiatives in electronic commerce
Commonwealth, state and/or territory, or local government legislation, regulation, policies, practices, procedures and guidelines in relation to:
public sector obligations (e.g. Codes of Conduct)
other relevant topics
international treaties relevant to trade and procurement practices
government and inter-governmental policy and agreements in relation to procurement practices
principles and practices associated with Corporate Social Responsibility (CSR), sustainability and environmental issues as applicable to procurement and market behaviours
complex and strategic planning for a range of outcomes
research and analysis as applied to complex outcomes, trends and predictions of markets and procurement changes
decision making processes and methodologies
probity principles and issues
codes of conduct, codes of practice and standards of individual behaviour relating to procurement decisions
government procurement environment
micro and macro-economic issues applicable to market behaviours and the impact of procurement
legal issues and determinations impacting on procurement
implications for the organisation and for the market (suppliers) of key procurement strategies and/or arrangements
whole of life costing considerations and value for money
financial, costing and accounting issues relevant to procurement and contracts
cultural issues relevant to procurement and industry development in specific markets or market sectors
The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment
Competency must be demonstrated through an ability to predict future organisational needs from the market, based on the analysis of past and current organisational and market data. A clear understanding of commercial and business trends and behaviours is required. Current planning, emerging legislative, regulatory, social, business and market trends must also be assessed in order to predict future market activities. Strategies must be developed to facilitate appropriate arrangements for category management planning and implementation to complement and enhance the achievement of organisational outcomes in a more efficient and effective manner.
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Assessment must confirm an ability to:
access and use Enterprise Resource Planning systems such as financial, tender planning, HR, asset management
access and use relevant accounting information
develop and use effective performance metrics related to category management
develop and use effective category management strategies to achieve objectives
identify and apply the people skills relevant to category management
gather and analyse complex financial, business and market information and develop procurement, market and supplier profiles
identify and interpret complex legislation, regulation, policy, including international treaties, principles of CSR, sustainability, environmental and social trends
contribute to complex planning documents which support core business and organisational and government outcomes
assess local and international markets, indentify trends and develop strategies to ensure organisational market placement necessary to meet future needs
contribute to and implement category management strategies and processes within an organisation based on analysis of the characteristics of the category
consider both qualitative and quantitative factors in reaching decisions or recommendations
Consistency in performance
Competency can be demonstrated by providing evidence of undertaking a range of relevant work tasks in an actual or simulated procurement environment on a least two separate occasions.
Context of and specific resources for assessment
This unit of competency is to be assessed in the workplace or a simulated workplace environment.
Participants may need to access:
sample data on finance, procurement and markets to analyse and then to build recommendations
corporate planning documents including strategic procurement, finance, technology, logistics and human capital planning
current information relevant to CSR, sustainability, environment and social legislation, trends and expectations;
relevant market information
workplace scenarios and case studies relating to organisational expectations for future and strategic development of core business
emerging market trends, such as PPPs, strategic alliances, electronic commerce, holistic service solutions, engaging the corporate sector to deliver on behalf of or instead of government
Case studies that incorporate challenges on which to develop strategies to deal with future sources of goods and/or services and the methods that may need to be employed to secure future requirements.
Method of assessment
Suggested assessment methods include:
questioning to assess understanding of key subject matter areas, such as research, analysis, markets, legislation, planning, decision making, communication and mechanisms to plan and implement category management
preparing written reports evidencing the candidate’s review of strategies and approaches adopted by other government and non-government organisations to planning and implementing category management
preparing business cases or other similar documents for approval of category management approaches
developing category management plans
preparing category performance reports
contributing to and implementing sound category management strategies and planning outcomes based on analysis and reviews
demonstrating research, communication, consultation and negotiation skills
In all cases, practical assessment should be supported by questioning to assess underpinning knowledge and those aspects of competency which are difficult to assess directly. Questioning techniques should suit the language and literacy levels of the candidate, but not compromise the integrity of the assessment.
Guidance information for assessment
Evidence must be gathered over time in a range of contexts to ensure the person can achieve the unit outcome and apply the competency in different situations or environments. Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended.
PSPETHC501B Promote the values and ethos of public service
PSPGOV507A Undertake negotiations
PSPLEGN501B Promote compliance with legislation in the public sector
PSPOHS501A Monitor and maintain workplace safety
PSPPROC503B Manage contract performance
PSPPROC504B Finalise contracts
PSPPROC505A Manage procurement risk
PSPPROC506A Plan to manage a contract
PSPPROC507A Plan for procurement outcomes
PSPPROC508A Make procurement decisions
PSPPROC509A Participate in budget and procurement review processes
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Corporate planning documents may include:
government white papers or similar
strategic procurement plans
Annual Procurement Plan
Suitability may include:
natural product or service placement/fit into a category
fit to structures of the buying organisation
fit to industry, market or other organisational regimes
level of expenditure warrants creation of a category approach
level of strategic importance of products/services warrants creation of category approach
Category management means:
Manage groups of similar contracts e.g. ICT or Leasing
Communication strategies consider:
Internal stakeholders may include:
procurement and contract management staff
users of the goods and services
financial management staff
asset or fleet managers
logisticians, including materiel logisticians
Human Resource Management staff
External and market stakeholders may include:
industry peak bodies
users of the goods and services (if these are not internal)
Category management plan may include:
objectives to be fulfilled over the life of the contract
definition of the benefits to be achieved
approaches to communication with stakeholders
category baseline analysis
risk management plan including clear descriptions of risks identified, mitigation actions and responsibility assigned
outcome based performance metrics
Category management principles means:
recognising that categories have unique characteristics that need to be managed differently
Outcome based means:
focused on what the organisation intends to achieve, rather than on what the contract is producing (output)
Performance metrics may include:
measures of efficiency
measures of effectiveness
specific measures of spend, timeliness, quality
internal measures such as staff turnover
qualitative measures such as ease of dealing with the supplier and nature of the relationship
Senior management may include:
Board of Directors
program and Project managers
key operations managers
Staff skills may be:
general work skills (such as communications, use of technology etc)
discipline specific work skills (such as accounting, procurement, IT, commerce, marketing)
category specific work skills (such as knowledge of travel or office machinery)
qualifications whether required for legal reasons or beneficial)
Enterprise Resource Planning (ERP)and document management systems may include:
an integrated information system that serves all work areas within an enterprise. An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources
document management systems may range from manual paper based filing systems to automated systems
Level of spend includes:
all resources, direct and indirect, consumed in:
acquiring goods and services
managing the procurement process including managing contracts
value, volume and breakdown of spend
Procurement options may include:
outright acquisition and ownership
holistic service solutions
Public Private Partnerships (PPP)
Trends, opportunities and risks relevant to categories includes:
specific trends related to a particular category (such as travel, IT, office machinery or similar) as opposed to general market trends
discretionary and/or essential nature of supply
availability of replacement goods/services for contingency supply if category supply fails (eg due to force majeure or supply chain issues)
Recognised basis may include:
industry or service based categories such as travel, fleet, software, utilities etc
business unit/functional breakdown
degree of price flexibility for goods/services
nature/sophistication of supplies
Appropriate systems should consider:
Market strategies may include:
approaches to best exploit the potential of the supply market for the achievement of outcomes
awareness of changing market conditions
understanding of and possible changing of the buyer organisation’s positioning in the market to best achieve outcomes
Strategies to manage and maintain productive relationships may include:
stakeholder expectations and needs analysis
start up workshops with suppliers
regular performance workshops
issues tracking and resolution
communications plan and contract management plan
Sources may include:
IT systems including financial, tender publishing systems, HR systems and others
internal stakeholders such as end users, procurement staff etc
external stakeholders such as suppliers
benchmarking with other organisations
Category performance may include:
risks and issues
spend levels and patterns
value obtained and benefits tracking
constraints and limitations
supplier provided reports which:
identify improvement opportunities
measure supplier performance
measure buyer performance
benefits tracking activities which identify:
progress on continuous improvement opportunities
progress on category objectives
off contract spend analysis, and remedy mechanisms to be progressed
significant open issues and associated corrective action plan
Trends, opportunities and risks may include:
Efficiency and effectiveness may include:
best use of resources to produce results with little wasted effort (efficiency)
achievement of results that contribute to the organisation’s goals (effectiveness)
linkages between outputs of the category and achievement of organisational outcomes
Consult appropriately may include:
method of consultation
frequency of consultation
style, tone and level of content
Organisational strategies may include:
products and/or services
holistic solutions and outsourcing
Procurement and Contract Management
This unit contains employability skills.