OEM Procurement professionals eventually need new suppliers for some outsourced part or assembly and a request for quote (RFQ) will be issued to potential candidates. Some of the responding companies may be completely unknown, which adds to the substantial risk and time all this involves. We believe it would be valuable to increase the number of usable responses to your RFQ’s, and we can offer some suggestions to do just that!
Adding some features to your RFQ will give you more useful responses, and possibly wonderful long term supplier candidates. In fact, we plan a much more comprehensive treatment of this issue soon in a white paper. We hope you will contribute to this important topic. Please share your thoughts on our blog.
Proficient Sourcing’s mission is to bring excellent supplier candidates to procurement professionals quickly and without obligation. We work hard to understand as much of what the buyer seeks as we can, and then search our resources to find candidates that match those needs as closely as possible. When RFQ’s are is issued, we have observed and experienced several things that reduce the likelihood of finding excellence; especially if long term relationships are desired.
First of all, the easiest change is to be certain you clearly present the date on which you want a response. We are amazed at how often this is omitted, and then on occasion an answer misses the unknown deadline. In a few cases, the “late” bid would have won the business. So if you are not including a “quote by” date, you run the risk of not receiving responses in time for your considerations.
This does not absolve suppliers who issue RFQ bids on their own schedule. Apparently a published date does not register in some companies. However, this is one thing Proficient Sourcing works to correct and we are usually able to either convince the candidate bid on time or at least forecast when a bid will be available so the buyer can adjust to the extent possible.
Another date that might be easy to incorporate is when a PO decision is expected. We understand what happens at the OEM end could take many different twists and turns. Thus, the elapsed time from RFQ response to PO decision can vary widely. If you identify very briefly what that duration is expected to be, you may save lots of phone calls and emails asking when something is to happen.
This simple step could also lead to a very good company bidding that would otherwise not do so. For example, if the supplier candidate is temporarily slammed, they may forego bidding on something very attractive. If they knew a decision might not happen for some time, that would eliminate the temporary capacity bind and a bid would be more likely to occur. Conversely, if someone bids expecting a fast decision, delaying that decision might result in a potential supplier no longer available to accept a PO.
While on the subject on RFQ dates, another possibility you might want to avoid is missing the candidate who cannot meet the stated due date—this time. If you are interested in gathering new potential supplier candidates with RFQ responses, then you might consider including a way for someone to respond who cannot meet your date. For example, add “if you cannot meet the due date, is this project otherwise in your wheelhouse? Please comment”. No telling how such an open question might be answered, but you could find a valuable supplier candidate for the future.
As mentioned earlier, these are but a small sample of the many actions we have observed that would likely increase RFQ responses and potentially improve your supply chain. We expect to share more of these in subsequent newsletters, and would very much appreciate your comments in our blog.