The RFQ process in manufacturing, from request to purchase order

The RFQ process runs from a buyer’s request for quotation to an accepted purchase order: the buyer sends a defined requirement, the supplier decides whether to bid, clarifies gaps, estimates the cost and submits a quote with its assumptions and validity, and the buyer compares quotes and places an order. The last step, checking that the purchase order matches the quote, is the one most often skipped and the one that causes the most expensive disputes.

RFQ, RFP and RFI

For made-to-print parts the RFQ is the norm. An instant quote is the same request answered by software, and the steps below still happen, compressed into seconds or handed to a person when the request needs one.

Step 1: the buyer prepares the request

A good RFQ package removes questions before they are asked.

When items are missing, suppliers either ask (slow) or assume (risky). A buyer who wants comparable quotes from several suppliers gains most from a complete package, because every supplier then prices the same thing.

Step 2: the supplier logs, acknowledges and triages

Log the request with its deadline and documents, and acknowledge it the same day with the date you expect to quote. Then decide whether to bid at all. Estimating is skilled work; time spent on jobs you will not win or should not take is time not spent on those you will.

With a bid threshold of 3.0, this request goes ahead, though the low capacity score says the lead time needs care. The weights and threshold are the shop’s own choice; the value is in deciding the same way every time. Track your win rate by score band to see whether the threshold is in the right place, as described in quote win rate.

Step 3: clarify

Read the model and drawing together and list every question before you send any. One message with six questions is answered faster than six messages. Typical questions:

• The model and drawing disagree. Which revision governs?
• A tolerance is tighter than the feature needs. Is it critical?
• A material is specified by trade name. Is an equivalent grade acceptable?
• The finish note is ambiguous. Which surfaces, which colour, which standard?
• A thin wall or deep pocket will be hard to make. Would a small change be acceptable? DFM feedback here often saves the buyer more than any discount.

Record the answers against the request; they become assumptions on the quote.

Step 4: estimate

Cost the route: material, set-up, machine time, labour, consumables, outside processing, overhead, risk and margin. How to quote a manufactured part walks through the method with a full example, and lead-time pricing covers what to do when the requested date needs a rush.

Step 5: review and submit

A second person checking the quote catches the misread drawing note and the missing finish, the errors that arithmetic checks miss. Then send the quote with:

• price per quantity, with set-up or NRE shown where it matters;
• lead time in working days, and when the clock starts;
• quote validity;
• the drawing revision and specifications priced;
• assumptions from the clarification step;
• exclusions: what is not included, such as inspection reports or freight;
• terms, or a reference to your standard terms.

Step 6: evaluation, negotiation and award

The buyer compares quotes on price, lead time, quality record and risk, not price alone. Expect questions, requests for alternative quantities, and sometimes a request for a best and final offer. If the requirement changes, re-quote rather than adjusting the price by feel; a new revision may change the route.

Record the outcome, won or lost, with the reason if the buyer gives one. Lost quotes are the cheapest market research a shop gets.

Step 7: from purchase order to confirmed order

When the purchase order arrives, compare it with the quote before you confirm. Quality managers often call this contract review; ISO 9001 requires a review of the customer’s requirements before a supplier commits to supply.

Resolve every difference in writing, then send an order acknowledgement. Work started on an unchecked PO is work at risk.

Where RFQs usually go wrong

Most of these are not estimating errors. They are gaps between the steps, where information known at one stage did not reach the next. A single record per request, holding the documents, the questions and answers, the quote and the outcome, closes most of them.

How long does each step take?

That depends on the part, the shop and the buyer, so measure your own. The useful numbers are the time from request to acknowledgement, from request to quote, and from quote to decision. If quotes routinely take days for parts the shop makes every week, the routine ones are candidates for instant pricing, leaving people for the requests that need judgement.

Quotometry handles the routine end of this process: the buyer uploads a model, sees DFM checks and a price, and orders, with requests that need a person routed to an inbox for manual review and orders delivered by signed webhook and e-mail, as described on the orders page.

Questions people ask

• RFQ
• Quote validity
• Win rate
• Lead time
• DFM
• Tolerance
• STEP