What RFQ Means?
“RFQ” stands for “Request for Quotation.” It is a standard business process wherein companies invite vendors or service providers to bid on specific products or services. An RFQ typically will detail the quantity and specific specifications required for a product or service, allowing the vendors to provide a price quote for the work.
What are the differences between RFQ and RFP?
“RFQ” (Request for Quotation) and “RFP” (Request for Proposal) are both procurement methods used by organizations to solicit offers from vendors and service providers. While they may seem similar, they have distinct purposes and are used in different scenarios. Here are the main differences between an RFQ and an RFP:
|Feature||RFQ (Request for Quotation)||RFP (Request for Proposal)|
|Purpose||To obtain pricing for well-defined items or services.||To solicit proposals for complex projects where how the service or solution is delivered is as important as the cost.|
|Focus||Price and compliance with specifications.||Overall solution, including strategy, approach, and value.|
|Complexity||Low to moderate. The requirements are specific and clear.||High. The requirements may require a detailed explanation and could include various components.|
|Specifications||Detailed and exact; vendors quote on the same specs.||High-level or functional; vendors may propose different approaches.|
|Evaluation Criteria||Primarily price, assuming all specifications are met.||A combination of price, strategy, technical solution, and vendor capability.|
|Document Format||Often shorter and to the point.||Usually longer with detailed instructions for submitting a proposal.|
|Outcome||A purchase order for the goods or services.||A detailed contract, including terms, timelines, and service levels.|
|Usage||Typically used for commodities, off-the-shelf items, or simple services.||Typically used for services, complex purchases, or when the problem or solution is not clearly defined.|
This table provides a general comparison, but it’s important to note that in some instances, an RFQ might also contain elements of an RFP if there’s a need for some level of detail on the approach or methodology, particularly for services. Similarly, an RFP might sometimes be more focused if the buying organization has a clear vision of the solution it requires.
RFQ Example for Construction Industry Download for Free
RFQ Example for Manufacturing
RFQ Management Process in ERP
At ERPixel we provide ERP solution for construction and manufacturing companies. The RFQ management process is described below.
|1. Creation||Users create an RFQ by filling in supplier details, product descriptions, quantities, and expected prices in the Purchase module. Duplicate functionality is available for recurring RFQs.|
|2. Sending||The RFQ is sent to suppliers via email directly from Odoo, with an auto-generated PDF attachment of the RFQ. Supplier contact information is utilized from the stored database.|
|3. Receiving Quotes||Responses from suppliers are input into the system manually or through electronic integration. Odoo allows for comparison of different supplier quotes for the RFQ.|
|4. Conversion||The chosen RFQ is converted into a Purchase Order with one click, with details carried over to the PO. This PO is then subject to the company’s internal approval workflow.|
|5. Tracking||Odoo provides a status overview of each RFQ and PO, including draft, sent, bid received, and PO stages. Automated reminders for supplier responses can be set up.|
|6. Integration and Reporting||The system integrates with Inventory and Accounting modules, automatically updating records upon PO confirmation. Reports can be generated to assess the RFQ process.|
|7. Vendor Management||A supplier database is maintained within Odoo, including detailed information that can be referenced when creating new RFQs.|
|8. Customization||Odoo allows for customization of the RFQ process to match specific business needs, including custom fields and stages.|