Automating your RFQ process means being able to send RFQs automatically to multiple vendors electronically. Your vendors are able to respond to the quote online, updating information in SAP Business One in real time.
In short, your customers can compare quotes, and place a PO (purchase order) on the best option, i.e. price, and this information gets automatically entered into SAP Business One.
Steps to Automating RFQ
Step 1: Setting Up Master Data
Vendor Master Data: Start by making sure that the complete vendor information is keyed into SAP Business One. It should include contact information, payment terms, delivery details, and contact person.
Material Master Data: Make sure that you have updated your system with the latest information on your materials – which includes the specifications, MOQ, price, availability and vendors.
Step 2: Creating a Request for Quotation (RFQ)
Initiate an RFQ: Click on the Purchasing module within SAP Business One and select the option to create a new RFQ.
Input Requirements: Make sure that you enter the complete information when creating an RFQ. Be as specific as possible and do not leave out important details like quantities, delivery deadlines, and delivery instructions.
Choosing Vendors: Once all information is entered into the system, select the vendors that you would like to send the RFQ to. SAP Business One allows you to select multiple vendors so that you can choose from one that provides you with the most optimal bid.
Step 3: Distributing the RFQ
Automate Distribution: You can use SAP Business One’s automated distribution feature to send the RFQ to your selected vendors. There is no need to manually email them to individual vendors as the system is able to send emails or EDI (Electronic Data Interchange) messages to vendors.
Track Responses: Once you have sent out the RFQs, the system will also be able to track which RFQ has been sent and received. You can then track and monitor responses via SAP Business One itself.
Step 4: Evaluating Vendor Quotations
Compare Quotations: Once you receive quotations from vendors, you can easily evaluate each one of the quotations from within the system itself. Compare each of the quotations in terms of price, quality, delivery timeframe, and any other criteria you have.
Analyse Vendor Performance: Additionally, you can always check back on the vendor’s performance with historical data within the system. You want to make sure that you are selecting a reliable and trustworthy vendor, hence past information will be helpful to assist you in making current decisions.
Step 5: Selecting the Best Quote/Bid
Automated Recommendation: If you prefer to have the system select the best quotation, you can specify predefined criteria such as price, delivery timeframe, and past performance metrics. This allows the system to automatically select the winning quote based on your predefined criteria.
Approval Workflow: To further automate the process, you can create an approval workflow where selected quotes and vendors are reviewed and approved by relevant stakeholders before it is finalised. This adds a layer of cross-checking before the decision is made final.
Step 6: Creating Purchase Orders
Generate Purchase Orders: Once it is approved, the quote can be converted into a purchase order. The seamless conversion from RFQ to purchase order minimises human error and mistakes. It does not require manual data entry and can be completed with a click of a button.
Send Purchase Orders: Once the purchase order has been created, the system can automatically send it to the selected vendors through the system. This eliminates the need for manual email sending with attachments which are cumbersome and prone to human-errors.
Step 7: Monitoring and Reporting
Track Order Fulfillment: Since everything is created within the system, you can also use the system to track the status of the orders, delivery dates, and the overall performance of the vendor. All these data can be used to improve and fine-tune future purchasing process.
Generate Reports: Reports can be created on each journey within the RFQ process. All these data can be used to improve and fine-tune future purchasing process.
For more information on how to automate your RFQ process in SAP Business One, please contact us for a consultation.
FAQ
Q: What is RFQ in procurement?
A: An RFQ (Request for Quotation) is when a company asks vendor for prices on specific products and/or services. Vendors send their quotes, and the company compares them to choose the best option. It is a way to gather pricing before making a purchase decision.
Q: Why do RFQ?
A: Typically when a company does a Request for Quotation, the company is looking for solutions that includes prices, timelines, specifications, delivery options. This allows the company to choose the best overall approach for their needs.
Q: What is RFQ document?
A: An RFQ document is a formal request sent by a company to suppliers, with a specific request asking them to provide a quotation for their specific product and/or services. It will include all pertinent information about the request including quantities, pricing, delivery instructions, timelines and other terms.
Q: RFQ vs RFP?
An RFQ (Request for Quote) is a document to ask a vendor the price, detailed specification, delivery timeline, and availability of a specific product or service. An RFP (Request for Proposal) is a document that proposes a project to solicit bids from vendors – usually slightly more ‘open-ended’ to suggestions and fresh ideas. The key difference is that RFQ is used when you know specifically what product or services that you are looking for (and need full details of price, availability, delivery timeline, specs), while RFP is used when you need a product or service but are open to proposals or ideas.
