Today’s post is by Heather Powell, Project Manager for SafeSourcing

As we wrap up this 6-part series on RFx strategies, looking specifically at RFQs the past two days, we will take a look at some strategies that successfully increase the two most important aspects of every project you run; value results, supplier participation.   The two are separate but both must be achieved to truly create a successful project.

Today we will focus on how to drive supplier participation in your events.

Details, Details, Details- In the RFQ, send an invitation to potential suppliers containing in a detailed list or description of all relevant parameters of the intended purchase, such as:

• Personnel skills, training level or competencies
• Part descriptions/specifications or numbers
• Quantities/Volumes
• Description or drawings
• Quality levels
• Delivery requirements
• Term of contract
• Terms and conditions
• Other value added requirements or terms
• Draft contract

By breaking the mold, you can typically have 8-10 suppliers or more participate in your project. They are all actively participating within the RFQ in a set timeframe, which is usually 15 minutes, but can be adjusted with a line item count of over 25 items.  Within the 15 minutes, suppliers can lower their bid pricing an unlimited amount of times. Like sealed bidding, suppliers cannot see one another’s pricing. There is only one way they know they have a low quote on an items and that is by a low quote indicator. 

Missing Pieces- An easy way to establish your specifications and already have base pricing is from your RFP! Many times you already have a list of suppliers that are educated on entering pricing within the system. The RFQ gives the supplier the opportunity within the live event to see if they have any low quotes and to “sharpen their pencils” to lower their pricing if they wish. From this event you can potentially award a business based on the pricing, or offer another supplier you may feel fit your business better the opportunity to negotiate their pricing closer to what the lowest bidder provided. This is a win-win for you and the future supplier.

Training and Communication – Suppliers should be trained on how to use the eProcurement system, how to place their bids, to look for the low quote indicator, and at the same time communicated with on questions and the pricing and products and services you are looking for. The overall goal is to get the best value for your company, and so suppliers should have an opportunity to enter in notes within the RFQ live event. This additional information can offer you even more additional savings, i.e. if you purchase 1,000 cases rather than 900, additional discounts, or other value added services such as waived for the first 6 months of a 1 year contract if awarded the business. These additional notes can provide and overall benefit, rather than just a low price wins.

If we go back to our original example of owning a building you would like to turn into a distribution center, we have discussed an RFI to understand what your needs could be, an RFP to collect further information and pricing proposal, and an RFQ to compress than pricing from the list of supplier who participated in the RFP.  It would be recommended in this last stage to run your line items as a complete list of materials rather than an item by item list, total cost of freight, total installation pricing- which could include teardown pricing or to have it as its own line item. These four items represent the largest spend items of your proposal and have the opportunity to lower your pricing 5, 10, 15, or even 20% from the original RFP pricing.

Determining what stage of the RFx process to begin with and how to assemble those pieces can be a difficult puzzle to put together especially if your procurement team is already swamped. A good Stratgeic Sourcing partner, however should be able to help you put these pieces together in a way that requires less time and resources from your procurement department than doing it yourself.   For more information on how we can help you with this process from gathering external and internal data to running RFIs, RFPs and RFQs or for more information on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Today’s post is by Heather Powell, Project Manager for SafeSourcing

You have read a lot of information on how to create a successful RFI and RFP.  In today’s blog we take you through the Request for Quote and the best way to build the best, quickest, and most successful RFQ.

An RFQ as  defined by www.businessdictionary.com  is “a document used in soliciting price and delivery quotations that meet minimum quality specifications for a specific quantity of specific goods and/or services. RFQ are usually not advertised publicly, and are used commonly for (1) standard, off-the-shelf items, (2) items built to known specifications, (3) items required in small quantities, or (4) items whose purchase price falls below sealed-bidding threshold. Suppliers respond to a RFQ with firm quotations, and generally the lowest-priced quotation is awarded the contract.”

Though this is the industry standard of what an RFQ means, today we will be digging into each of these to validate their merit. We will expand upon them, heighten them, and discuss how to expect increased value within an RFQ. With online eProcurement tools you can give suppliers an indicator of where they stand and give them an opportunity to lower their pricing should they choose. In standard practice this is done by phone calls or e-mails and one at time. It is very time consuming and does show some lower savings, but not with the rate of success online tools can provide.

Let’s take a closer look at the points to the definition above.

Standard, off-the-shelf items. This is a standard misconception of procurement departments everywhere.  The fact is that virtually any product or service can be taken through the eRFx process.  We have over 427,000 suppliers within our database to invite to participate in bidding on whatever your items or service may be and we have experience successfully running events in every part of the organization from HR, to Legal, to construction, to IT.

Items built to known specifications. While this is a valid point, it is also the biggest reason why projects are never taken out; no beginning specifications.  At SafeSourcing we help build a specification to fit the current need and in those in the future. By covering all of your needs and taking into consideration all of the moving parts that affect your items, for example, freight, fuel surcharges, additional fees, hourly rates to name a few, you can achieve results that are comprehensive enough to allow you to make strong decisions well after the project has been completed.

Items required in small quantities. There are no limits to quantities within the RFQ we help you build. There are no limits at all, including number of items to have the suppliers bid on. That being said there are always strategies that go with every event so that you end up with the most information you can get while allowing suppliers to focus on those areas you are most concerned with.   This is part of the service that you should be taking time to consider as you develop your sourcing projects.

Items whose purchase price falls below sealed-bidding threshold. The pricing we recommend within your RFQ would be analyzed by our team based on your historical spend, also taking into account any price indexes that can affect future pricing increases. Using your historical spend and any additional information, a max quote is established that the suppliers must meet first. We recommend a set price decrement, meaning once a supplier inputs their pricing at the max quote or lower, they must lower their pricing by that decrement amount, already showing lower pricing than what you currently are paying or price avoidance of future price increases. This is the start to showing you savings.

Knowing the differences between historical RFQ strategies and changes that are resulting in stronger results is the beginning of assembling the right structure for your project.  Tomorrow we will discuss, practically, how this is accomplished.

For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Today’s post is by Heather Powell, Project Manager for SafeSourcing

Today, we wrap of the review of the Request For Proposal stage of the RFX process looking at a view of how to transition the information you get from an RFI into an RFP.

In our example within the RFI, owning a new or used facility to turn into a distribution center, you may know where you want the racking, how much racking is required-this would include a set materials listing, the details of labor to install new materials and remove and re-rack another area. All of these details are required for the suppliers to bid the job appropriately. Within a very detailed RFP there are fewer chances for over or under bidding from the suppliers. The quality of an RFP is very important to successful project management because it clearly delineates the deliverables that will be required.

The details you receive from a RFI can be used to build your specifications. You have learned and verified from multiple suppliers the details you need to complete the project. You may also learn from an RFI details you hadn’t thought about, for instance in the racking project: if you are in California you will be required to have a seismic analysis done. This can be completed, but for an additional charge from the supplier. Suppliers may have similar products, but may not be compatible to other supplier’s materials, in other words their product will be proprietary and not interchangeable if a repair needs made in the future. These details and more need to be inserted into your new RFP.

So how can you combine a RFI with a RFP? Simply you have a lot of knowledge about a product, project, or service, but you have used the same supplier for a very long time and are unclear of who new potential suppliers could be. You would combine the RFI by asking the questions specifically related to the new potential suppliers; who are they, where are they located, what is their business structure, who the contacts are, what areas or locations can they service, what are their references, etc.  Combined with the specifications and details of the RFP, you will get an overall picture of who the company is, what they can or cannot provide, and what their pricing structure will be.

Now you have an idea of how to collect information on a project you may know little about within a RFI and you now know how to collect a RFP with the information you do know, but do you know how to compress pricing? How do you receive pricing within a RFP and ask the suppliers to lower their pricing? Stay tuned to the next part in this blog series where dive into the controversial Request for Quote, how it can be more than just a low-price only tool.

SafeSourcing can help you with your needs in creating, running, and reporting on a RFP for any item, project, or industry need. We can do this all electronically in your set timeline, and report it back to you in an easy and understandable package where you will be able to see the apples-to-apples comparison. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Today’s post is from our newest customer services manager Dennis Nicoletti

Today’s post is by Dennis Nicoletti, Manager of Customer Service at SafeSourcing. Dennis wants to know if you’ve ever been told “I am sorry, but there is nothing else I can do.” 

There’s no doubt you’ve been on the receiving end of lousy/bad customer service a time or two. You’ve come to a company with questions only to be told by a monotone voice to press this or click that until you arrive once again to your starting place with no help at all. Or worse, you’ve reached some uncaring CSR (Customer Service Representative) who calls you by name but delivers nothing to address your concerns or answers your question(s) satisfactory.
Back in the day…you were raised with basic good manners and along the way ever joined a service group, like the scouts or 4-H (do you remember?), then you’ve got the groundwork for providing excellent customer service. The foundation you need is one of courtesy, caring and an attitude that lets your customers know that you they matter-and that you care. There are skills and technologies that can help you put it all into practice.

Making the most of every opportunity – Whatever your company does, no matter how you do it, you make a promise to each and every customer that darkens your door. The consumer pays you something, and you promise to provide a product or a service. There are multiple pledges of benefits and quickness. Customer service involves living up to your word on these matters, but it really shines when something goes wrong.

The table has turned – Now you find yourself on other side of the equation. You own a business or you manage a department and you want your customers to be happy, to come back for more products or services, and even more importantly; tell others great things about your company. So what should you do?

Mistakes are opportunities — An unhappy customer will become a loyal consumer if you fix his/her complaint and do it quickly. Eighty percent (80%) of these folks will come back to you if you’ve treated them fairly. That percentage rises even higher if you respond immediately.

Aligned Sales and Service Departments – At SafeSourcing we created the framework for our company to keep sales and service closely tied together. Each department shares in the goal of excellent customer service. Authority to resolve problems is what people need to keep customers happy.

If you’re procurement team is searching for the right company to treat you with great importance while helping you to reduce costs, you need not go any further. We at SafeSourcing are committed to helping our customers and can assist you by explaining our strategies for assisting departments that historically have not wanted outside “help.”  For more information on these strategies or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.  We look forward to your comments. 

We look forward to and appreciate your comments