Create and process a request for quotation

  • 4 minutes

The request for quotation (RFQ) process invites suppliers to bid on specific products and/or services. The RFQ is a document that an organization issues when it wants to purchase products, and it chooses to invite companies so that they can submit competitive bids. This unit explains how to create request for quotations in Supply Chain Management.

When you want to buy an item that more than one vendor can supply, you would issue an RFQ. To do so, you need to create the request for quotation, select the vendors that you want to reply to the RFQ, and then send the RFQ to the vendors. The request for quotation states the required response time (expiry date).

The RFQ process includes the following tasks.

  • Create and send a request for a quotation to one or more vendors.
  • Receive and register request for quotation replies.
  • Transfer the accepted request for quotation replies to a purchase order.

You can start the RFQ process manually on the Request for quotation page from a list page or details page. Alternatively, you can start it automatically from a planned purchase order or a purchase requisition.

For example, the purchasing agent performs the following tasks:

  1. Create the RFQ case for an item and then send it to the vendor(s). Then, a procure agent enters the vendor reply information for the RFQ. Alternatively, if the vendor is configured to use vendor collaboration, the vendor can reply to the RFQ from the vendor collaboration portal.
  2. Keep the original RFQ information.
  3. Add the new received vendor RFQ information.
  4. Perform a comparison of the best total price received from the vendor RFQs.
  5. Select the vendor RFQ with the best total price.
  6. Select and enter a reason code to reject the other vendor RFQs.

Set up RFQs

Before you can create requests for quotations, you must set up RFQ information in your system. The four basic steps for setting up RFQs are as follows.

  • Define request for quotation parameters.
  • Set up default request for quotation reply fields.
  • Set up update parameters for quotation lines.
  • Define request for quotation number sequences.

Define RFQ parameters

To set up request for quotation parameters, follow these steps.

  1. Open Procurement and sourcing > Setup > Procurement and sourcing parameters.
  2. Select the Request for quotation FastTab.
  3. Select the Purchase type. The purchase type that you select is the default value for new RFQs. You can override the value on each request for quotation. The choices are Purchase order or Purchase agreement. You can’t select a purchase requisition manually.
  4. Enter the default days to add to the system date expiration in the Days offset field.
  5. Optionally, you can turn on the Working days option to only use working days from the company calendar when you’re calculating the expiration date instead of all calendar days.
  6. Select a default value to apply to requests for quotations in the Mode of delivery, Delivery terms, and Terms of payment fields.
  7. Select a trade agreement journal to apply by default for RFQs in the Default trade agreement journal field.
  8. You can lock RFQs when you send them. This approach enforces an amendment process where you can change the RFQ case and then send it by finalizing the amendment process through a wizard. If a purchaser should enter a bid for the vendor, the purchaser should be able to edit the vendor's bid.
  9. You can select a template for the email with the amended RFQ that goes out to the vendor contact. The email template can handle %xxx% tags, where text that you provide in the wizard can replace the tags.

Define how to update the RFQ lines when the RFQ header updates

Specify whether you want to update RFQ lines and RFQ reply lines automatically when you modify the RFQ header and the RFQ reply header.

For each field, select one of the following options.

  • Never - The system doesn’t update the lines when you update the request for quotation header.
  • Always – The system updates the lines automatically when you update the request for quotation header.
  • Prompt - When the prompt appears, you can decide whether to update the lines or not.

The Sales tax group field applies only to RFQ replies.

Issue an RFQ

You can create requests for quotations manually, or you can issue them from planned purchase orders and purchase requisitions. You can create RFQs for the Purchase order and Purchase agreement types.

If you create the RFQ from a purchase requisition, the system automatically assigns the Purchase requisition type to the request for quotation. For RFQs with the type of Purchase order, the system creates inventory transactions that have the receipt status of Quotation receipt when you create the RFQ lines. For RFQs of the type Purchase agreement, no inventory transactions occur.

Go to the Procurement and sourcing > Requests for quotations > All requests for quotations page, which contains the following sections:

  • Filter options for the Buyer group and Vendor account, in addition to the standard list page filters
  • A grid with each RFQ case
  • Vendors FactBox, which displays each vendor that’s associated with the selected RFQ case

RFQ statuses

The Lowest status and Highest status columns display the status of the order lines with the lowest and the highest status, respectively. The statuses in the hierarchy are as follows:

  • Created
  • Sent
  • Received
  • Accepted
  • Canceled
  • Rejected

The RFQ vendor column displays the status of the vendors that you select for the RFQ case header. The statuses are:

  • None - No vendors are selected for the RFQ case.
  • Single - A single vendor is selected for the RFQ case.
  • Multiple - Two or more vendors are selected for the RFQ case.

The reply statuses on the RFQ reply page in Supply Chain Management are:

  • Not started
  • Vendor updates
  • Purchaser updates
  • Submitted by Vendor
  • Submitted by purchaser

Note

You can only enter the vendor's reply on a dedicated page that you access from the Vendor collaboration interface or the Request for quotation page by means of the Edit reply action.