The procurement process is all about creating reliable, resilient, and sturdy supply chains, while improving time, efficiency, and savings. This combination of goals is achieved through various procedures and processes that can be standardized, customized, and fulfilled all through procurement software. With the help of knowledgeable employees empowered to use it of course. RFQ is an abbreviation for a process in procurement, RFQ meaning: request for quote.
RFQ’s are typically only sent to a select group of suppliers to which the procurement team has already narrowed down. These suppliers, normally, have met a certain amount of prerequisites that make them qualified participants in the reverse-auction. Having a select group of suppliers is a huge benefit to the procurement team, as they can be certain that whomever wins the bid will meet a certain quality-standard.
Once received by suppliers, the RFQ will be processed and returned with an estimated quote on the goods or services the procurement team is seeking. The RFQ meaning can alter slightly from company to company depending on how they employ the process.
On one hand, some companies choose to send out an RFQ by itself. Meanwhile, others will use an RFQ as a first step to an RFP, or request for proposal. Many organizations will even follow this up with a reverse-auction to ensure they achieve the best possible price on their contract.
The RFQ is an important process in the overall procurement lifecycle. As with all of the integral procedures within the overall procurement department; organizations need to ensure a firm grasp on the best practices, and industry standards related to the RFQ processes and procedures.
RFQ Meaning: Request for Quote Best Practices
Building a top-tier procurement team means understanding the ins and outs of each main process and procedure within the procurement department. Especially in current day and age with supply chains as stressed as ever, procurement teams need to be empowered with efficient and strategic solutions.
Technology has become almost an extra limb to us as a society, and it’s integration in business operations is crucial to staying competitive in today’s market. With RFQ software procurement teams can automate the RFQ process, and integrate it seamlessly with other procedures in the procurement cycle.
This means building real efficiency into the company’s RFQ process that leads directly into RFP’s and reverse-auctions. All-in-all, saving time, money, and labor-hours which drastically reduces the procurement overhead, and improves procurement savings. Using RFQ software, like that provided by ProcurePort, is an industry standard that improves and empowers procurement teams to achieve the greatest levels of efficiency yet.
While RFQ’s and RFP’s are similar in nature, and sometimes an RFQ can lead to an RFP, there are some distinct differences. For instance, an RFQ is normally designed for a company seeking a quote on a more generic contract of goods or services, with a known quantity. Meanwhile, an RFP can be formatted to be more suitable for niche projects, and one-off projects that are more unique in nature.
In either instance, implementing an RFQ software makes managing the RFQ process from start to finish easier, and more efficient. The tools included in the RFQ software make creating an RFQ to send to a select list of vendors simple and swift. On top of that, the software makes managing incoming quotes, and transitioning RFQ’s into the next steps of the procurement life cycle easy and intuitive.
A Summary of the RFQ Process
There are a few key takeaways in understanding the RFQ meaning, the related best practices.
First, the RFQ can be a precursor to an RFP, or a stand-alone process. Secondly, the RFP and the RFQ processes are slightly different in function. RFQ’s are designed for more standard contracts with known quantities, whereas RFP’s are better suited for unique projects. Third, using an RFQ software is the best way to empower your procurement team to achieve optimal levels of efficiency and savings.
Visit ProcurePort today and start exploring the best and most effective procurement software solutions on the market. ProcurePort professionals are ready to answer your questions, and offer custom solutions for any procurement need. ProcurePort is the premier place to learn about best practices, industry standards, software solutions, and virtually everything procurement. Stop by, and see for yourself.