The RFQ process is a standard business practice within the supply chain that ensures a buyer is getting the best value and best suppliers for the products they need.
A Request for Quote (RFQ) gives a supplier the opportunity to sell the most products at an appropriate price point, taking variables in product, volume, and region into account. Buyers typically submit RFQs in a detailed invoice or proposal-style format.
Most frequently, electronics manufacturing professionals commission an RFQ when they know what exact part or item they need and inquire into the price of the material. The RFQ is not only one of the most frequent operations carried out by every purchasing and supplier manager, but also one of the most tedious and complicated.
The response to an RFQ often entails manual and laborious data entry practices, unnecessary with technical solutions available today. Distributors, manufacturers, and suppliers unnecessarily waste thousands of hours and millions of dollars tackling orders and requests because of manual and inefficient processes.
When buyers and suppliers approach the RFQ process smartly and efficiently, it can be the most powerful way in which they see a substantial return in money and labor for electronics procurement.
Each year, a growing number of technologies affect the electronic component supply chain and help modernize these manual process. When appropriately managed, the RFQ process is used to provide consistent information across functional and geographic silos, increasing the engagement of stakeholders across the organization, and saving time and resources while eliminating errors.
Why Automate the RFQ Process?
Without automating the RFQ process, suppliers burden themselves with an onslaught of data and no way of efficiently sorting through thousands of lines of critical information.
Automation not only streamlines processes but provides for the collection of large amounts of data. When companies use this data intelligently, they can learn more about consumer behavior, buying patterns, and their organizational efficiencies. This, in turn, can lead to making strategic decisions based on actual, real-world data and taking advantage of all opportunities to grow the business as soon as they arise.
What are the key steps in the RFQ Process for distributors, contract, and component manufacturers?
The RFQ Process for electronic parts purchasing relies on speed and accuracy to quickly transmit proposals and orders between distributors and manufacturers. Most likely, whoever processes and responds to requests the fastest, is most likely to win the business.
The RFQ process for the electronic parts industry follows the timeline below:
(1) Process intake of the RFQ (turning a manual file into actual data)
(2) Process the RFQ itself (confirming part numbers, fetching prices, fetching spec data, confirming factory capacity and ATO, etc.)
(3) Business intelligence, data availability across the organization.
When selecting a supplier:
- For the electronic parts industry, sometimes only a small number of distributors have the necessary part a buyer requires.
- While the supplier selection might be small, responding to proposals quickly and with competitive pricing is necessary as competition can be fierce.
When confirming receipt of RFQ request, many times a soft request is needed by a distributor to confirm the following:
- Communicating physical specs of parts
- Communicating/confirming pricing
- Communicating//confirming inventory or ATO (Available to Order) for the timeframe of the RFQ (which might be months or years)
- Communicating delivery data
- Communicating Quality or Compliance requirements (for government or regulated orders).
There are countless points throughout the RFQ process where distributors, manufacturers, and suppliers have the potential make mistakes with RFQ intake and output. When it comes to the RFQ process speed and accuracy dictates the winner in most cases. Manually tackling thousands of lines of data is avoidable the Orbweaver Platform.
With automated solutions like Orbweaver Connect and Advance, users can streamline the process, aggregate data instantly, and cut the review time by more than half. Recently, KEMET saw RFQ efficiencies execute up to 1000% faster with automation solutions for the RFQ process.
To learn more about the automating your RFQ process, request a free demo with the Orbweaver team today.