January 10th, 2018
purchasing and supply – Formal Requisitions of Supplier information
Identification of the potential suppliers paves way for the buyer to make formal requests to such suppliers for relevant information. Such requests may take three formats. Firstly, buyers can make a Request for Information (RFI). An RFI seeks market information on the options available to the buyer to meet his or her needs (Biel, 2009). Typically, such requests inquire from the supplier about his products and their differentiating factors from the other offers in the market. Responses to such requests are generally limited since buyers would usually respond where they believe that the RFI would lead to a subsequent award of the contract (Biel, 2009). Secondly, the buyer can make a request for proposal (RFP), which usually comprises a request made with the knowledge of the market, but seeking input from the prospective suppliers on how they can meet the buyer’s need (Biel, 2009). In such cases, the contract will mainly be for a complex process or product where the buyer needs the supplier’s input and expertise on the best option for meeting the terms set out in the RFP.
A third form of request is for a quote (RFQ). In this request, the buyer is not only knowledgeable of the market, but also knows the exact specifications of the supplies that he seeks. Accordingly, the buyer sends requests to the supplier to provide their bids on the terms at which they would provide such specific products (Biel, 2009). Due to the specificity of such requests, prolonged negotiations are a rarity in RFQs.
Go to part six here.