How to Manage RFQ’s

Job shops, including MTO, ETO, and the different variations, deal with RFQs on a daily basis. An RFQ is a Request for Quote. There are various terms that describe a similar process; for instance, an RFP or Request For Proposal.  

RFQs have a dual meaning based on the hat you wear. If you are a customer that requires widgets to be made by a supplier, then you submit an RFQ to that supplier. Sometimes, an RFQ is submitted to suppliers based on the needs of the RFQ from a customer. The supplier then responds to the RFQ. The result of an RFQ should be giving accurate pricing back to the customer in a timely fashion. This is critical in being awarded that job. Quoting and estimating is where the pricing will be calculated accurately and efficiently.

One great tool that an ERP system offers is the ability to track RFQs throughout the process. RFQs start off in draft mode and are assigned to an estimator. As the estimator begins to work on the RFQ and come up with detailed costs and pricing, the status changes to “in-process”. This gives management the ability to see all RFQs that are in-process, which gives an accurate view of the work load. Once the RFQ is complete, an approval process can begin by moving it to a “pre-approval” and, finally, “approved” status. Lastly, the RFQ can be submitted to the customer with confidence that the quote was accurately made with the all proper approvals in place.  An advantage of tracking RFQs through their workflow is to have traceability, the analytics of time spent, number of RFQs that received a response, and capture rates. An ERP system should be able to efficiently track this workflow and create graphical, real-time management dashboards with minimal effort. Once the RFQs have been responded to, the waiting begins. When you are awarded the RFQ, it flows through the manufacturing process based on the up-front effort to track the RFQ. ERP systems should automatically calculate the capture rates of RFQs in order to record proper analytics for both the estimators and customers.

MIE Solutions Inc. provides an all-inclusive RFQ to Quote to Order workflow that is efficient and easy to use.