Stressed out supplier - RFP Response

The Dreaded RFP Response

by Vendor

 

Stressed out supplier - RFP ResponseAs a vendor or supplier of product or services, one of the biggest challenges in today’s marketplace is finding the time to respond to the constant stream of information requests arriving in your inbox each week. Your responses need to be professional, representative of your organization, accurate and detailed enough to ensure you are shortlisted for potential projectsThese information requests may include price and delivery inquiries, product specifications, tenders or quote requests, and-most time-consuming of all-the dreaded RFP response which is likely the most time consuming task out of all the inquiries presently filling up your inbox. RFPs continue to rise in popularity because many organizations now use them as a catch all tool for handling internal requirements submitted to the purchasing department.

When the purchasing team doesn’t receive a clear scope or specification, they often issue an RFP in hopes that a vendor will propose a solution. What is frequently overlooked by the Buyer is the amount of time and effort required for the Vendor to prepare a strong RFP response. You can’t blame them—purchasing teams have their own fires to put out—and most suppliers accept that responding to a request for proposal is simply a cost of doing business. Can you reduce the cost of responding to RFQs and RFPs? Yes and no, and we’ll address that shortly.

As a vendor you should keep track of your success rate and the approximate cost of preparing your response. If you are spending $10,000 to submit a response and being awarded a $150,000 contract then you can clearly justify your ROI. If you are spending the same $10,000 to be awarded a $15,000 contract then not so much unless it leads to further work or a long term relationship with a new client.

I am not sure most companies can answer how much it costs to deliver a RFP response or tender call however I do know that if they can find a way to do this quicker, save money and achieve better results then everyone would consider doing it. Having a clean versus cluttered response is a start and taking the time to have more than one person review the RFP request are two solid ways of improving your chances. While every RFP response requires a unique approach, many components can be standardized.

Your company references, testimonials, company bio, contact coordinates, past project successes, financials, safety and equipment lists can be prepared ahead of time. Other areas like your cover letter can also be saved in a format which allows you to tweak and go. All these pieces will help you get your responses out quicker and quicker means cheaper.

Since 2008, RFQPro has been helping both Buyers and Suppliers succeed with the request for quote and request for proposal process by providing web-based RFQ Software and editable procurement related word templates to help users expedite this process and improve departmental productivity. Why start from scratch? Visit the RFP Response Page for more details.

Vendor Inventory

by ContractVendor

There are many types of arrangements aka vendor contracts you can enter into with your suppliers. If you are looking at employing a partnership philosophy, one to consider is Consignment Buying. What is consignment buying or vendor owned inventory? A definition of vendor owned inventory or vendor managed inventory (VMI) is when a supplier (the company you purchase from) maintains an inventory bank in the buyer’s facility which is under the buyer’s control. The buyer assumes responsibility for perpetual activity or accounting for withdrawals or usage of stock from the consignment inventory, payment for quantities used and notification to the supplier of the need to replenish inventory. Verification of quantities remaining in inventory is jointly done at periodic intervals.

This strategy has advantages for both the supplier and buyer. The buyer benefits by having reduced inventory investment which can free up funds for capital or other investments and the supplier is assured supply or captive volume. This type of partnership arrangement is often used in the distribution industry.

Some of the other benefits the buyer gains is it removes or eliminates the risk of obsolescence. Obsolescence is often overlooked and it is when the inventory no longer meets your requirements and therefore is returned or sold as surplus. Under a consignment arrangement, the Vendor still owns it therefore they assume the risk.

There is a cost associated with tying your vendor into a consignment arrangement. You can be assured that you will be paying more for your inventory vs a spot buy for the same goods but as a business owner you have to weigh the pros and cons and make your decision based on your existing financial and staffing requirements. For some, the opportunity of using your capital elsewhere, eliminating dealing with obsolete stock, managing the inventory surpasses the extra cost incurred or paid for vendor inventory.

What should a consignment contract look like? What should be included? Stay tuned or subscribe to our feed as the next post will answer these questions and provide further insight on sample consignment or vendor managed inventory agreements.

How To Succeed With Tenders

by All TemplatesVendor

Nine (9) Simple Suggestions to Improve Your RFP Response(s)

Preparing outgoing tenders are skills which are a critical component of the professional buyer’s job description, however, responding to a tender or RFP is a critical component to the success of any business. If you fail to succeed at receiving the award as a result of your tender responses it is  likely you will not be in  business very long.

Nine (9) simple suggestions which will increase your chances at winning more tenders.

  1. Pre-Game Preparation: We love the sports or game analogy and preparing to respond to a RFP or a tender is no different. Prior to the game, athletes are practising and completing training to ensure they are successful on game day.  Responding to a tender request is no different. Preparation is key and there are many areas you can prepare ahead of time or prior to responding to a RFP or RFQ request.
  2. Training or investing in learning will always result in a great rate of return and improve chances! Keep all certifications and credentials current and readily available.
  3. Tender responses almost always require details or specific profiles on your team, approach and methodology, management, price and past experience.
  4. With the often restricted timelines to complete the tender response, it is crucial that time is allocated to ensuring the best possible solution to the project’s requirements is presented at the best possible price.  Most effort needs to be dedicated to providing a solution and not a re-hash of past experience.
  5. Obviously, a successful track record of implementing or past experience in similar activities will be evaluated and contribute to your success or failure for any tender.  But this doesn’t imply spending countless hours to locate and compile a summary of past experiences is time wisely spent – this can be done now and on an ongoing basis.
  6. All tender requests are likely to call for an array of details which exhibits your experience in past or similar activities.  Information required almost always consists of the activity name, location and duration, client, project value, key personnel by name and title, and a synopsis of the activity.
  7. Aggregating this activity is clearly destined to be a challenge if it requires searching for staff and past associates for details, relying on memory, etc.  The answer is to encourage the habit of compiling relevant information as soon as a project begins, and keeping the information current.
  8. This can be made even easier by capturing information from the start of a project consistent with how a future tender might require the information presented.
  9. Major organizations request a Project Data Sheet (PDS) for each project example that you are including with your tender response.  This is often a single page that captures all the information required in the evaluation of your response.