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 industry 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 business operations, 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 and Component Manufacturers waste thousands of hours and millions of dollars as the result of manual and inefficient processes.
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Best Practices for RFQ Intake & Response
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. 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 and Component Manufacturers?
The RFQ Process for electronic parts relies on speed and accuracy to quickly transmit proposals and orders between buyers and sellers. Most likely, whoever processes and responds to requests the fastest, is most likely to win the business.
The RFQ Intake process for the Electronic Industry looks something like this:
- Manipulate incoming data, usually received in a manual flat file or un-editable document (PDF), into something you can work with or that your system can ingest.
- Process the RFQ itself by confirming part numbers, fetching pricing columns, fetching spec data, confirming factory capacity, etc.
- Obtain business intelligence and competitive data available across the organization.
- Evaluate alternate part numbers and packaging options, limited by the customer’s pre-authorized approved list and preferences.
- Take into account allocation, stock-outs and planned obsolescence.
- Internally communicate the RFQ opportunity for pipeline forecasts and market determination.
- Identify potential duplicate quote opportunities across the organization so that aggregate market opportunities are not overly inflated.
- Also identify duplicate opportunities presented in different global regions so that internal competition does not reduce profits unnecessarily.
- Determine a price (finally).
- Price approvals may be required and alerts provided for high value line items or promotional considerations.
- The response data needs to be collected and manipulated into the form required by the customer for the RFQ response.
- Archiving of RFQ responses and internal decision support data so that future quotes may benefit from past efforts.
There are countless points throughout the RFQ process where Distributors and Component Manufacturers have the potential make mistakes with RFQ intake and response. 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 significantly. 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.