- What would it mean to you if you could increase the speed and quality for the RFQ process?
- Could you better drive your supplier base if you had time to send more RFQs to new potential suppliers?

RFQ Templates and eSourcing systems
Most companies doing sourcing activities send out RFQs, Request For Quotations, to their suppliers on order to gather necessary information for a sourcing process. A common problem is that the RFQs do not have a standardized format. This can cause problems such as mandatory questions and requests being left out, difficulties to compare data from different suppliers, information from the same company is compared differently due to misaligned historic RFQ processes or by done by different employees. This leads to inefficiency, lack of control and most likely missed savings.

A first step to gain control of the RFQ process is to create a common template for the RFQs. Here is an example of how an RFQ can be built up:

1. Confidentiality clause

2. Introduction and purpose

3. Describe the RFQ procedure and time plan

4. Background and description of the project

5. Terms and general agreement

6. Quality management & Cooperate Social Responsibility

7. Operations and capacity management

8. Cost management

9. Development capabilities

10. Production capabilities

11. Project plan

12. Price information and cost break down

When creating the RFQ it is a good idea to have a general purchase agreement to use. Browse the general purchase agreement and get an understanding of which paragraphs are most important. Add these requests to the RFQ in order to understand if your suppliers can comply with them or not.

If your company does several RFQs per year you have probably realized the time it takes to review and compare all answers manually. Even though you have an RFQ template there are most probable different variants from your suppliers which again could create inefficiency and lack of control. To further increase efficiency and control you should consider implementing an eSourcing system.

An eSourcing system is a tool that helps you obtain RFQ answers from different suppliers in the same format and in one single portal. There are several benefits of using eSourcing:

· Streamlining the sourcing process

· Reducing cost by maximizing supplier competition

· Easy comparison on different items between different suppliers

· Possibility to compare historic quotes

· Creating a repository for sourcing information – perfect to use when recruiting new or changing employees

There are many different vendors to choose from when selecting an eSourcing tools. Some examples are: Ariba (http://www.ariba.com), IBM – Emptoris (http://www-01.ibm.com/software/procurement-solutions/emptoris/) and Moai ( http://www.moai.com/solutions/solutions_completesource.asp)

Common pitfalls

- Companies do not have a standard RFQ framework leading to inefficiency and lack of control

- When creating an RFQ template – the terms and conditions in the general purchase agreement are not considered, meaning that you could select suppliers to your shortlist who will never comply to your legal requirements.

- When selecting an eSourcing tool, not all stakeholder requirements are considered leading to lack of usage