Very few purchasing professionals will admit they enjoy the task of writing an RFP, we would much rather dedicate our efforts to the negotiation process, closing a deal or other areas which justify our existence.
Save yourself the stress and your employer the money by utilizing one of the many RFP and RFQ sample templates in one of our bundles. RFQPro provides more sample RFP Forms than any other online provider and we are proud to provide this service to both our procurement and supplier clientele.
RFQ45 – RFP is another sample template form and it can be used for software services. Here is a brief look (page 2 and 3) or preview of this 10 page RFP template.
Payment terms are an area in the RFQ process which is often overlooked or forgotten. Some commonly used payment terms would be Net 30 days, 2%/10 Net 30 days and there are many more. (To help get a better understanding we have included a glossary of payment terms you can download for free at the bottom of this post). So, what do these imply and is it something a Buyer should be paying attention to as part of the award process?
When generating a RFQ or RFP, most buyers will place the majority of their efforts on the product, FOB Point and other commercial aspects of the quotation and doing such is absolutely right but one evaluation point which is often overlooked or not considered in the overall award process are the payment terms. Buyers will often accept or assume the standard Net 30 days offered is not worth analyzing.
Using Structured Questions to Drive Vendor Improvement and Collaboration
The process of evaluating vendors is an ongoing task which every purchasing department should be performing at regular intervals. In this process, you are inviting dialogue or communication with your vendors, which is always good.
What types of questions should you ask your vendors? Ask questions directly related to areas which require improvement and do not neglect to mention areas which the vendor is excelling or performing well at.
Remember, the goal is to help your vendor improve their service levels and how they do business with your company. In return, the vendor might even offer something which will make both your organizations more efficient!
In Part A, we have provided a verbal question you might ask during your interview. In Part B, we have some examples of questions which are asked internally and completed prior to the actual vendor interview. See Delivery issue in Part B.
Part A
Do you have a recognized Quality Assurance program implemented?
Is system in effect?_________ Is procedure written? __________
Other questions can be related to the internal review. Example:
Out of XXX shipments this year we have identified a poor performance rating in the Delivery category because you have used an incorrect carrier. Have the vendor explain why.
Maybe, the carrier you are requesting on your purchase order does not service that region or possibly the message is not getting to the vendor’s shipping department. In the latter, our experience is if you refuse to pay freight charges because the vendor did not ship as instructed, they quickly get the message and future shipments will be as instructed.
Part B
1.
DELIVERY
Points
Weight
Total
On time arrival or service
90
.18
16.2
Conformance to packaging specifications
89
.10
8.9
Correct carrier used
59
.02
1.12
SUB TOTAL
.30
26.3
2.
QUALITY
Conformance to specifications
90
.15
13.5
Commitment to improve quality
90
.12
10.8
Quality of information (documentation)
90
.03
2.7
Claims and credit returns
87
.02
1.74
Environmental
92
.08
7.36
SUB TOTAL
.40
36.1
Rating Points
0 – 19
Not Applicable
20 – 39
Not Acceptable / No Compliance
40 – 59
Poor Performance
60 – 79
Good / Minimum Expectation
80 – 89
Very Good
90 – 100
Excellent Performance
Weighting Vendor Performance to Reflect Operational Priorities
Any effective vendor performance evaluation relies on a clear weighting system and rating scheme that measures Price, Delivery, Quality, Quantity, and Service. These categories form the backbone of most procurement scorecards, but the relative importance of each one cannot be standardized across organizations. Only the owner or procurement lead can determine the appropriate weighting, because they best understand which product classes and service elements are most critical to operational viability.
The emphasis placed on quality versus delivery, or service versus price, will vary not only from company to company but also from vendor to vendor. A supplier providing mission‑critical components may require a heavier weight on quality and delivery reliability, while a commodity supplier might be evaluated more heavily on price and service responsiveness. The weighting system should reflect these nuances so that the final score accurately represents the vendor’s true impact on your operations.
Open and honest dialogue should be completed annually with your primary or key vendors and should be documented to allow for review and accountability. If you are interested in a comprehensive Vendor Performance Template you may wish to review RFQ30 which is in our Premium, Vendor and Mega packs.
