Top 4 Best Practices to Improve RFQ Processes in Supply Chain Management

The administration of the movement of goods and services is referred to as, Supply Chain Management (SCM). This includes all procedures that turn raw materials into finished commodities. And it’s an essential part of most businesses’ success stories.

One area of SCM that can quickly become a bottleneck for Retail and Consumer Packaged Goods companies, is Requests for Quotation (RFQs).

In this blog we’ll look at a typical RFQ process, the reasons why RFQs can cause delays in the Supply Chain, and how we can improve RFQ communication between partners, suppliers, and manufacturers.

What is a Request for Quote (RFQ)?

A Request for Quotation (RFQ) is a competitive bid document used to invite suppliers or contractors to submit price bids for items or services with standardized or repeatable specifications.

What Do Common Request for Quote (RFQ) Processes Look Like?

A typical RFQ process consists of 3 steps:

• Preparation
• • Creating the RFQ
  • Preparing documentation
  • Listing plausible vendors
  • Risk assessment
• Management
  • RFQ distribution
  • Reviewing vendor responses
  • Drawing contract
• Deal Closing
  • Negotiating and signing
  • Courtesy responses

How Can We Improve RFQ Processes?

In Retail and CPG, most buyers and suppliers have unique variations in their RFQ processes, which have developed over time. This means that there are often overlaps in communication, delays, and rework caused by subtle differences in processes.

We can help to minimize these issues by centralizing and standardizing RFQ processes as part of an overarching Supply Chain Management solution.

Centralizing Product and Related Data Access

Most mistakes, delays, and omissions in the product development and selection process result in higher expenses, quality difficulties, missed sales, and inventory build-ups. PLM Supply Chain Management unites all internal and external stakeholders, from merchandisers and buyers to product development, quality, designers, and sourcing and suppliers.

A centralized hub for managing RFQ processes means that all interactions are standardized, variances are much easier to identify.

Make Data Sharing Simple, Safe, and Efficient

Whether you’re an CPG brand manufacturer, retailer, or a supplier, you’re used to handling multiple contracts at any given time. Many of the interactions throughout those projects will generate some documentation. And each organization has different processes, storage methods and communication lines. How often do you find yourself searching for a document when the digital paper trail goes cold?

By unifying storage within a single platform, each stakeholder throughout the supply chain has simple, appropriate access to the information they need. This way, there’s no need to tailor specific operations and routines to manage external communications. And there’s no risk of transactional data loss.

Planning for Demand Variance

Demand variance planning gives buyers, merchandisers, and sourcing teams real-time visibility into OTB (open to buy) and forward planning.

Product planning loops in the most up-to-date estimated numbers from operations, and the plan variance report gives buyers, merchandisers, and sourcing teams real-time visibility into OTB (open to buy) and forward planning.

Having the ability to integrate into existing enterprise systems is critical for organizations to enable a single source of truth so that buyers can get visibility into this critical information when working with supplier throughout the RFQ processes.

Ultimately, the key to any supplier-facing system is that you have a holistic view of all the necessary information and are able to make informed decisions.

Sustainability and Social Responsibility

In the last decade we’ve seen several Consumer-Packaged Goods (CPG) companies held publicly to account for their practices. But today, more headlines are filled with news of these companies’ efforts to put socially responsible, sustainable practices in place.

Businesses must be aware of their carbon footprint throughout the supply chain and consider the environmental impact while selecting suppliers in order to thrive. Aim to build policies and procedures that will benefit not only your employees and your company, but also the community.

Always-on, always up-to-date, standardized supply chain communication is the best way to maintain traceability and to ensure that suppliers and partners meet with your, and your customers, requirements.

TECHNIA Exchange Hub provides the ability to create a library of different forms of documentation, such as specifications, terms and conditions, etc. This collateral is not specifically tied to a given RFQ but is accessible to suppliers to view and collaborate against. With Workflow, when a document is updated or introduced, relevant suppliers receive notification.

In Our Experience…

Building simple, reliable, and efficient RFQ processes is crucial to the broader context of Supply Chain Management. It’s also key to ensuring traceability throughout the supply chain – something that more and more consumers are becoming concerned with.

TECHNIA Exchange Hub is an affordable, flexible, and secure solution that can help you to improve RFQ processes, B2B supplier collaboration and corporate transparency. Why not request your free trial today?