Optimize RFQ processes
How to make supplier quotations comparable
An RFQ (Request for Quotation) is a structured request in which a company invites several suppliers to submit a quotation for a clearly defined scope. The RFQ process covers every step from scope definition through quotation submission and price comparison to award. Its outcome goes far beyond price. The award also determines which supplier will handle initial sampling for a part and supply it in series production. A well-structured RFQ process therefore delivers both: comparable prices and confidence in quality.
RFQ, RFI and RFP: What is the difference?
RFQ, RFI and RFP are three types of supplier request, collectively referred to as RFx. They differ in how far the requirement has already been defined, and in procurement they often follow one another.
RFI (Request for Information)
An RFI is used to explore the market. The company requests general information on suppliers’ capabilities, capacities and certifications, and uses it to build a shortlist of suitable suppliers.
RFP (Request for Proposal)
An RFP is used when the objective is fixed but the approach is still open. Suppliers propose a concept and price it. RFPs are typical for complex services, development scopes or service contracts.
RFQ (Request for Quotation)
An RFQ requires a fixed specification. All suppliers receive the same scope, including parts, quantities and delivery terms, and submit a quotation for it. Because the scope is defined, the quotations are directly comparable, and the decision comes down to price, terms and supplier quality.
How does an RFQ process work?
An RFQ process runs through six phases, from scope definition to award. Each phase lays the foundation for the next. If a phase lacks structure, making up for it during the comparison takes considerable effort.
- Define the scope
Procurement and engineering jointly define what is being requested: parts with specifications, drawings and supporting documents, along with the price breaks. Price breaks are essential because price advantages shift depending on the call-off quantity. A complete scope avoids follow-up questions and amendments later on. - Select and invite suppliers
Only suppliers qualified for the scope are invited. The basis for this is the supplier self-assessment, valid certificates and the existing supplier evaluation. All suppliers receive the same scope in the same structure, with a binding submission deadline. - Collect quotations
Suppliers enter their quotations per part and price break, including lead time and terms. Questions are answered centrally, so all bidders work from the same information. - Compare quotations
The comparison sets quotations side by side per part and price break. Only then does it become clear which supplier is actually more competitive at which quantity. Missing items also become immediately apparent. - Negotiate
Based on the comparison, selected quotations move into negotiation. Suppliers revise their offers, and the comparison updates with each new version. - Award
Ideally, the award is made part by part. In a sourcing event covering multiple parts, individual items go to different suppliers. All bidders receive feedback, including those not awarded. The award marks the start of initial sample approval, and the supplier relationship moves into series production.
When are supplier quotations truly comparable?
Quotations are comparable when all suppliers respond to the same scope in the same structure and the comparison is based on the same data. In practice, this depends on five factors:
- Consistent structure: Suppliers tend to respond in their own format, whether as a PDF, an Excel file or free text. A predefined quotation structure per part and price break makes quotations readable side by side without any manual transfer.
- Consistent price breaks: If a supplier deviates from the requested price breaks, their price can no longer be benchmarked directly. Binding price breaks in the request scope ensure that every price is measured against the same quantity.
- The same information for everyone: Handling questions by email quickly leaves bidders with different levels of information. When communication runs centrally within the RFQ, everyone calculates on the same basis.
- Comparison without manual transfer: Copying quotations into a comparison spreadsheet by hand leads to errors and competing versions. A comparison generated directly from the submitted quotations stays up to date and auditable.
- Evaluation per part: A total price across all items hides where a supplier is strongest. Comparing per part reveals this and enables an award that assigns each item to the right supplier.
This makes price, lead time and terms comparable. The open question is whether the lowest bidder can also deliver the quality required for series production.
Why does supplier quality belong in the award decision?
The award is a decision for a series supplier, not just for a price. Otherwise, whether the supplier reliably delivers the required quality only becomes clear during initial sample approval or with the first complaint. An award decision is therefore only robust when quality data is factored in before the contract is awarded.
Three types of information are key:
- Supplier self-assessment: It documents the supplier’s capabilities, capacities and processes and serves as the basis for the RFQ invitation.
- Certificates: Valid certifications such as IATF 16949 or ISO 9001 are a prerequisite for series suppliers. An expiring certificate needs to be on the table before the award, not after.
- Supplier evaluation: KPIs on quality, delivery reliability and collaboration show how an existing supplier has performed in practice.
When this data sits in the same system as the RFQ, procurement and supplier quality make decisions on the same basis. The price comparison shows who offers the lowest price, while the quality data shows who can reliably supply series production. In inforum Supplier Management, supplier self-assessment, certificate management, supplier evaluation and initial sample approval come together in one system, making the RFQ one step in an end-to-end supplier process. The RFQ software from inforum covers request, price comparison and award from start to finish.
Wondering whether a standalone RFQ tool is enough or whether end-to-end supplier management makes more sense for your RFQ process? Talk to our experts about your requirements.
Questions about the RFQ process
What is an RFx process?
The RFx process refers to the multi-stage supplier request made up of RFI, RFP and RFQ. The stages often run in sequence: the RFI explores the market, the RFP clarifies the approach, and the RFQ obtains binding prices for a fixed scope. For series parts with a clear specification, the process often starts directly with the RFQ.
Who is involved in the RFQ process?
Procurement leads the RFQ and is responsible for price and terms. Engineering defines the specification and requirements for the parts. Supplier quality contributes the quality perspective, covering supplier self-assessment, certificates and supplier evaluation. The award decision becomes robust when all three work on the same RFQ.
Can the RFQ process be automated?
Yes, especially the recurring steps. Invitations, deadlines, the comparison per part and price break, and feedback to all bidders can all be handled within the system. In inforum, the award automatically sets all unsuccessful quotations to rejected and notifies the suppliers. The award decision itself remains with procurement.
Which software supports the RFQ process?
Options for the RFQ process include standalone procurement solutions, ERP functions and supplier management systems. The difference lies in how the RFQ is embedded. RFQ software within a supplier management system links the request directly to supplier self-assessment, certificates, evaluation and initial sample approval. inforum takes this approach.