Creating An RFQ That Gets Results
By Frank Russo, Guest Blogger
Creating an RFQ (Request for Quote) or RFP (Request for Proposal) is the first step in selecting a new or existing supplier to produce a high quality part with a reasonable price point at your time of need. An RFQ is your initial communication with potential suppliers to express your expectations for a job, so a well-crafted RFQ is essential to the sourcing process.
So why not just email a couple of suppliers with a few details and an attached drawing?
In the supplier discovery process, a well-crafted RFQ is the key to a profitable partnership for both you and your supplier. When your supplier is crystal clear on your design intent, their work is streamlined. Your groundwork and a comprehensive RFQ will lead to a supplier who can meet your product requirements, and minimize the potential for cost overruns and missed delivery deadlines.
But, how can you create an effective RFQ?
Here are 3 easy steps to a structured RFQ that gets results.
1. Clearly Communicate Your Expectations and Compare Apples to Apples
- Detailed RFQs allow suppliers to prepare accurate quotes that minimize the potential for cost overruns, delivery delays and products that don’t meet your requirements.
- A comprehensive RFQ also allows you to evaluate the value of different suppliers, because sourcing a part is not just about price.
- A solid RFQ opens a dialog between you and prospective suppliers to address design and manufacturing issues, as well as material options.
- Provide a level playing field for potential suppliers. When utilizing a standardized RFQ platform, buyers can efficiently compare quotes since they have been prepared using the same procedure and format resulting in “apples to apples” comparable quotes.
- If you are pressed for time, take advantage of an expedited RFQ feature such as Fabricating.com’s “Easy RFQ” where your detailed RFQ is prepared for you.
2. Build An Informative RFQ
Creating a complete, informative RFQ will save you heartache downsteam during the bidding and manufacturing process resulting in competitive, comparable quotes, and a choice of proficient suppliers with the qualifications and bandwith to produce your product to spec … saving time, expense, and your product quality.
Here are the key ingredients to communicate your requirements:
- Introduction and Executive Summary – This section describes the overall requirements and expectations for the job, including the end use of the product.
- Business Overview (RFQ Header) – The business overview includes more detail about the intended end use for the product and any standards and certifications that must be met. Also include order details, quality requirements and delivery information here.
- Detailed Specifications – Cover all product details and requirements in this section, such as product drawings, engineering tolerances, milestones, deliverables and timelines, technical or business requirements.
- Terms and Conditions – Add terms from your standard contracts regarding payments, financing, warranties, delivery penalties and other terms suppliers need to be aware of prior to quoting.
- Selection Criteria – Articulate your priorities and the criteria used for supplier selection. These fine points would include the supplier’s ability to meet regulatory or industry standards, their experience in manufacturing products for your industry, or meeting a tight deadline.
- Contact Information – List company and contact information for questions and clarifications.
- Submission Information – Provide the deadlines and method for submitting quotes.
3. Fast Track to the Right Supplier for the Job
As we have stated, a well-written RFQ puts you in charge of the quoting process. Here are some tips for a successful quoting process.
- Customize Each RFQ – Create an individual RFQ specifically for each project. Do not run the risk of copying details from another RFQ that are not applicable to the current job.
- Don’t burden the RFQ with boilerplate information. Using a template format helps your team input all the pertinent information and makes it easier for suppliers to comprehend your requirements.
- Be Specific about your Product – Be specific and thorough when describing your product. Make sure the supplier understands the end use of the part or product, the features you require, the materials you want to use, the manufacturing process and the tolerances you require.
- Organize Your Information– The RFQ should be well organized so suppliers can locate pertinent information easily.
- Use common terms and explain uncommon language. Every company has acronyms and terms unique to its products and processes. Don’t assume people outside of your plant understand your lingo, so the best policy is to avoid using those words.
- Articulate the Nuances – Your end product has a specific application use, so be clear about the product requirements for that use. For example, if your part needs to perform well in salt water environments, include the information in your materials section and the process section. It is also important for the supplier to recognize that special fabricating and welding methods are required, in addition to specific alloys suited to salt water environments.
- Make Your RFQ Data-rich – In the case of an RFQ, more data is clearly better. Be sure to include detailed specifications, engineering drawings, requirements and any other information about the product and end use.
Your RFQ is Perfect … Now What?
Once you complete your detailed RFQ, the next step is to distribute it to potential suppliers. It is also very important to have a method to communicate with them throughout the quoting process. There are a number of tools available to assist in distributing RFQs. Online marketplaces provide sophisticated features and tools to help you manage interactions with suppliers during and after the quoting process, as well as managing dialogue and progress once the job has been awarded. Many of these tools provide additional flexibility for you to access a number of qualified suppliers, with the ability to limit or expand the list of suppliers who receive the quote.
Creating an RFQ that gets results will help you to forge successful supplier relationships that are mutually beneficial partnerships, collaborate to solve challenges and save you the time, expense, and poor product quality of unexpected surprises.