Yesterday we explained how, just from an RFI perspective, many S2P “e-Negotiation” or “e-Sourcing” platforms kicked you when you were down and reeling from an unnecessarily intensive, and painful, supplier discovery process — a process that should be mostly automated (as per our lead up articles). But, as we all know, the RFI is just the first stage of the process.
Once a supplier passes the RFI, you need to
- actually create the RFP
- determine if you are going to invite a supplier to the RFP (and monitor the process once you do)
Generally speaking, creating an RFP is no walk in the park either as the platform is even less likely to contain a relevant RFP template, especially if you are sourcing direct materials or custom manufactured products and need details on processes, raw materials, warranty, maintenance, and delivery methods as well as detailed cost breakdown models. If the RFI process was manual and painful, the RFP will be ten times as manual and painful.
You will have to:
- identify the relevant bill of materials for each product (and possibly build them from scratch)
- identify the non-cost information required at each level (raw material, source, quality specs, etc.)
- identify the cost models required at each level (and possibly build them from scratch)
- identify the roll-up models for costs and quality scores
- identify the evaluation models that you will use
- put all this together into a cohesive and comprehensive RFI
When all you should have to do is:
- identify the products you are sourcing
Since a modern system, especially one built for easy direct material sourcing, should automatically, for each product:
- pull in the relevant bill of materials
- identify the relevant non-cost information based on the compliance requirements noted in the RFI and organizational policy
- identify the relevant cost models based on the bill of materials (and preferred production processes)
- build the roll-up models based on embedded intelligence in the platform and defined relationships between the different levels of the BoM
- apply a standard evaluation model for the category to the RFI
- … and integrate all of this into a comprehensive RFP for your manual review
Once you have this RFP, you need to determine if you still want to invite the supplier, especially if you have more potential suppliers than you really need.
And, right now, platforms don’t help you here at all.
You see, you only want to invite the supplier if there is a chance you will actually make an award to the supplier in this, or a future, event. If the quality is too low, the prices are too high, the necessary services do not exist, or the necessary culture is not present, the RFP process will be a waste of time on both sides.
Now, you might say that there’s no way to know this before going through the RFP, but is that really the case?
But we’ll take this up in the next part of this series.