Request For Quotes (RFQs) are a necessary evil.

When I was speaking to an operator in South Africa, he explained to me how overwhelming his days were.

He processed hundreds of RFQ line items every day. His team sent their RFQs to over one hundred people on an email list.

I could hear the frustration in his voice.

He was stressed, overwhelmed, burnt out.

After decades of doing it this way, he was reluctant to change. But clearly, it wasn’t working.

His days were stuck processing RFQs.

Have you felt the same way?

Recently we met with a larger regional operator in the United States. She and her team send over 900 RFQ line items per day.

The biggest issue her team faces is they don’t have a great material partner they feel that can fully support them.

They also have difficulty sourcing and managing their daily material needs.

We see a trend here. It doesn’t matter how many “suppliers” you send your RFQs too.

There’s no correlation between having numerous vendors and generating the results you seek.

More suppliers add more complexity.

Simplify Your RFQ Distribution

If I was going to look at your RFQ processes, the first thing I would diagnose is its complexity.

You may think sending it to an extensive contact list is easier, but in fact, it’s on the contrary.

You’ll have to sort through and review all the quotes. 

All the emails!

It likely if you have a large RFQ contact list that some vendors you don’t know, so you’ll ignore them.

Others aren’t reliable, so you can’t work with them, and you’ll get plenty of responses saying “no quote.”

Finally, you’ll review all the items that were quoted and likely make a decision based on price, which is a terrible idea (see the next section on this topic).

To simplify your RFQ processes, you’ll need to cut the waste. 

Remove the contacts whom you won’t send a purchase order (PO) to from your distribution list.

If you're not willing to send a PO to them, then don’t use their quotes as a good benchmark on market pricing.

The next step is to streamline how you distribute your RFQs — sending emails one at a time is daunting.

You’ll receive multiple replies for each email.

If you send ten separate RFQs to ten different contacts, you’ll get over thirty emails back.

Now imagine if you sent it to more than ten people.

Instead, consolidate your RFQs into as few emails as possible.

Let’s say your maintenance team sends you a requisition order for ten items for your DHC8 fleet.

Create one RFQ, for those ten items and send them to five contacts.

This will reduce the number of emails you have to process.

Don’t send your RFQs one-by-one to a massive email distribution list.

Insanity will ensue.

A quick word on eCommerce. It’s great for some operations; it’s even better if you’ve taken advantage of a just-in-time expendable/consumable strategy.

It’s rather unhelpful if you need 24/7 human support, the opportunity to reduce cost from consolidating, need to speak to someone about price, and frankly, to build a relationship that’s built on trust.

It has its place, but it won’t replace amazing human support.

Don’t Make Choices Based On Price Alone

I’ve spoken to thousands of procurement and supply chain professionals over the last decade.

The decision to purchase is always a mixed debate. Some procurement professionals feel that buying the cheapest priced goods is how they’ll make their purchasing decisions.

Others understand that it’s the lowest overall cost that has the most significant impact on an operation.

Being the VP of Acquisitions for over a decade, working with hundreds of operations, and seeing the results, reducing cost is much more useful than chasing a cheap price.

You never find better, faster, and cheaper in the same offering.

With the lowest price comes less human support, poor quality, increased order shipment issues, and a myriad of possible other scenarios.

When you invest in reducing your overall cost, you generate more impactful results for you and your operation.

An example of reducing cost is by consolidating your orders, which reduces processing and shipping costs.

If you consolidate, you’ll be able to negotiate better material pricing, so it’s a win/win all around.

There are many ways to reduce your total costs, and that should be what you ultimately seek in your RFQ process.

Work With Someone Who Creates Value For You And Your Company

The last, but most important thing you can do to simplify your RFQ processes, is to work with a trusted material advisor.

These are people and organizations who have the following characteristics:

1. They do what they say they’re going to do.

2. They don’t give you false information to get an order. We call this the bait and switch.

3. They’re honest.

4. They’re respectful and polite.

5. They give you valuable advice even though you may not always agree.

6. They challenge you in ways that make you think of better, more efficient ways to do things.

7. They have a high degree of integrity.

8. They’re smart and knowledgeable.

9. They possess the ability for effective written and verbal communication.

By working with someone who has such characteristics, they’ll help your operation achieve the results it seeks and make your working life SO much better.