Cost savings and added value in procurement

At the beginning of the procurement process, it is important to understand the requirements for the services or products to be procured as well as possible. During this phase, an idea of the desired contract construct and a tactical or strategic supplier relationship should also be developed.

In contrast to the RFQ, the aim of the RFI is to identify suitable suppliers. The requirements should therefore not be limited to technical specifications, but should also take into account aspects of the corporate culture in order to identify and qualify high-quality suppliers.

The qualification of potential suppliers can take place in various ways, such as through the involvement of current or former suppliers, market research or independently received supplier offers. A detailed qualification process can be very time-consuming, but ensures that suppliers fulfil all requirements in the subsequent commercial bidding process.

Taking the time at the beginning of the process will save time in later stages of the process, when you can focus solely on negotiating final contract terms. The result of the qualification process should be a shortlist of 3 to 5 providers who will compete in the commercial bidding process.

The Request for Proposal is usually not clearly separated from the RFQ - Request for Quotation - in the linguistic usage of those involved in purchasing. In a three-stage process (RFI - RFP - RFQ), initial commercial offers from shortlisted suppliers are obtained in this phase on the basis of communication within the framework of the RFI and supplementary service descriptions (e.g. SLAs - Service Level Agreements), for which the supplier's consent is required for a contract to be concluded.

An RFX process with the RFQ upstream RFP process offers the opportunity to integrate desired innovations from bidders in the final requirements matrix and thus in the commercial bidding competition and to better understand and take into account the pricing processes.

For suppliers, this process offers the opportunity to demonstrate their ability to reduce costs and optimise products. In the event that different product variants are presented by several suppliers, it is necessary for the buyer to obtain more precise information on these variations. This is the only way he can then decide on the best variant, taking feasibility into account.

In the case of different product specifications, it is also important that the requirements of the users are actually based on the requirements of their own company and not on the specifications of a supplier. If it is a new tender for a product that has already been purchased, the possible expense of a change should also be taken into account. However, this is also often used as a blanket argument against costly but sensible cost optimisation.

The final step of the RFX process is the RFQ phase, in which the buyers obtain offers from the pre-selected producers, usually as part of a formal tender. At this point, no more changes are made to the requirements, as these have already been fully optimised during the RFP. The final commercial and contractual negotiations are then conducted on the basis of the tender results, usually with the most favourable supplier.