ISM Leadership and Transformation in Supply Management LEAD Exam Practice Test

Answer : A

To address inconsistencies in reporting cost reductions, the best approach is to discuss balanced scorecards with the supply management team.

Balanced Scorecards: This management tool helps align business activities with the vision and strategy of the organization, improving internal and external communications, and monitoring organizational performance against strategic goals.

Comprehensive Evaluation: By implementing balanced scorecards, the supply management department can create a comprehensive evaluation framework that includes both cost savings and cost avoidance, ensuring consistent and accurate reporting.

Goal Setting: Balanced scorecards facilitate setting specific, measurable targets for team members, enhancing accountability and performance tracking across different dimensions of cost management.

Kaplan, R.S., & Norton, D.P. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business Review Press.

Niven, P.R. (2006). Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results. John Wiley & Sons.

Answer : C

The new employee in the supply management department has developed good rapport with the team and has gained business knowledge but is struggling with the ERP system. One-on-one training is the best approach to enhance the employee's ERP skills. This method provides personalized instruction, allowing the trainer to address specific questions and challenges faced by the employee. Leadership and transformation management documents emphasize the importance of tailored training methods to effectively develop employees' skills. Personalized training can accelerate learning and ensure the employee becomes proficient in using the ERP system. Reference highlight the benefits of hands-on, direct interaction in training, which can be more effective than generic online modules or manuals for complex systems.

Answer : D

Record/Database Management Overview: Policies governing records and databases are influenced by various factors, including storage location.

Impact of Storage Location: Where records are stored affects accessibility, security, compliance with regulations, and disaster recovery plans. This is crucial for ensuring data integrity and availability.

Considerations: Storage location impacts the physical security, environmental controls, and redundancy of records. It also determines the compliance with data protection laws and regulations.

Long-term Impact: Proper storage ensures that records are protected against loss, unauthorized access, and environmental damage, supporting effective management and retrieval processes.

Reference: Best practices in record management, as outlined in ISO 15489-1:2016 (Information and Documentation -- Records Management) and resources from the Association of Records Managers and Administrators (ARMA), emphasize the importance of secure and compliant storage locations for records management policies.

Answer : C

The junior buyer observing a senior buyer conduct various sourcing events is an example of shadowing.

Shadowing: This method involves one individual observing the day-to-day activities of another, gaining insights into their tasks and responsibilities. It is an effective way to learn through observation and informal mentorship.

On-the-Job Learning: Shadowing provides practical exposure to real-world scenarios and decision-making processes, which is crucial for developing the skills of a junior buyer.

Knowledge Transfer: This method facilitates the transfer of tacit knowledge, which can be difficult to acquire through formal training programs alone.

Noe, R.A. (2017). Employee Training and Development. McGraw-Hill Education.

Goldstein, I.L., & Ford, J.K. (2002). Training in Organizations: Needs Assessment, Development, and Evaluation. Wadsworth.

Answer : C

Scenario Overview: The supply manager is part of a cross-functional team managing critical parts. Despite the supplier's strong record in quality and pricing, frequent follow-ups and expedited shipping are issues. The supply manager assembles data and discusses risks, leading the team to explore alternative suppliers.

Stakeholder Engagement Definition: This involves effectively communicating with and involving stakeholders in decision-making processes to ensure their needs and concerns are addressed, leading to better decisions and outcomes.

Application in Scenario: The supply manager engaged stakeholders (the team) by presenting data on supplier performance and highlighting potential risks. This facilitated informed discussions and helped align the team's perspective towards considering alternative suppliers.

Outcome: Through stakeholder engagement, the team identified alternative suppliers with comparable pricing and quality but better delivery reliability, achieving a successful outcome.

Reference: Stakeholder engagement is a key principle in project management and strategic sourcing, as outlined in the Project Management Institute's (PMI) PMBOK Guide and supply chain management literature such as 'Supply Chain Management: Strategy, Planning, and Operation' by Sunil Chopra and Peter Meindl.

Answer : C

Definition of Direct Cost: Direct costs are expenses that can be directly attributed to the production of a specific product or service. This includes raw materials, labor, and any other costs directly associated with manufacturing.

Highly-Customized Computer Part: The customized nature of the computer part makes it a direct cost because it is a specific component needed for the product assembly.

Relevance to Production: Since the part is essential for the assembly of the product, its cost is directly traceable to the product, fitting the definition of a direct cost.

Reference: Cost accounting literature, such as 'Cost Accounting: A Managerial Emphasis' by Charles T. Horngren, defines and discusses the classification of direct costs and their importance in product costing.

Answer : D

A policies and procedures manual is an example of a before-the-fact management control. Before-the-fact controls are proactive measures designed to guide employee actions and prevent issues before they arise. Leadership and transformation management documents stress the importance of establishing clear guidelines and procedures to ensure consistent and compliant operations. A policies and procedures manual provides detailed instructions and expectations for employees, helping to prevent deviations from standard practices. Reference emphasize that such manuals are essential tools for maintaining control over organizational processes and ensuring alignment with strategic goals.