Procurement or Sourcing professionals often raise RFQ's (Request for Quote) to get quotes from suppliers or sometimes to look for new potential suppliers to come forward and submit his offer. Even today most of the small and medium-size business still conduct sourcing events manually, that means they get an indent request from the end-user group in their company. Buyers compile an email that describes what they are looking to buy and sends a bunch of emails to approved or new suppliers that they have in their database.
A study conducted by eSupplierGlobal found that out of 15 RFQ email sent to suppliers only 3-4 quotes are received on average by the Buyer, there are several reasons that the RFQ's don't convert into meaningful quotes or offer, here's the outcome of our research.
- We noticed that most of the procurement or sourcing managers don't have formal training in creating RFQ's professionally; they mainly forward the information which is received by the user team to the suppliers. In most cases, the user team provides minimal specifications, which requires a lot of two and fro communication with User-Buyer-Supplier, creating a delay in communication, and in such cases Suppliers miss the quote deadlines or even interest to quote.
- Most of the suppliers we spoke to don't follow up for additional questions/information which would require to compile a quote. Thus it is advisable for the Buyer before sending an RFQ they should proofread or analyze the specification which they would share to suppliers requesting for a quote. By adding specific information like product Delivery date, Location, Packaging type, Terms & Condition, or any other relevant information which the supplier should know before sending a formal quote is helpful.
- There are two types of sourcing, Part number base or Specification-based sourcing. If you are looking to source a standard product of a given make, it's ideal to get exact part number or model number so the supplier can quote immediately without delay as they have price list handy to check and price.
- Items that are custom built or source as per specification, buyers should get involved with the user group and have a detailed discussion before finalizing all the relevant specification details and use drawings sheet where ever possible to allow suppliers to understand what exactly are looking to source.
- If the Buyer is looking to Buy the product/service for the first time, they should conduct online research to find qualified suppliers and should have valid supplier contact email address to whom they would send the RFQ email, finding new suppliers is a tedious task for Buyers as there are no more printed Yellow pages or Industry-specific trade directory's available today.
Using a smart eSourcing tool allows Buyers to built RFQ, which is more effective as Buyers can use the tool's ready to use RFQ templates, it saves time. Additional features include New Supplier Discovery, with no additional buyer effort required, simply create a detailed RFQ with specification/drawings and let the AI tool sends your RFQ details via email to potential suppliers. For Suppliers, it easy as well. They submit their quotes online, while Buyers with a click can create quote compression statement in MS Excel.