RFQ (request for quote) is a business process in which a company or public entity requests a quote from a supplier for the purchase of specific products or services. RFQ generally means the same thing as Call for bids (CfB) and Invitation for bid (IfB).
Up until the 1990s, these kinds of requests were issued on paper, over the phone, by fax or by email, which made apples-to-apples comparisons among different suppliers difficult and time consuming.
Various terminologies used in sourcing and purchasing/procurement world are as follows:
ERFx – Electronic Request For (x) – “x” can be a proposal, Quotation or Information.
RFI – Request for Information – An RFI is commonly used to collect information about products, services, or suppliers. It typically precedes the other RFx processes listed below and is used to help a buyer to shortlist potential suppliers to evaluate. An RFI can be used with any of the RFx processes. This is generally used when a primary buying entity uses consulting firms or third party resources to collect information BEFORE they put together official RFP/RFQ.
RFP – Request for Proposal – This document’s purpose is intended to collect a third-party provider’s products, solutions, pricing, and capabilities in the form of a pricing proposal. An RFP should include the guidelines, instructions, and forms necessary for the applicant to submit a proposal. The end goal of this document is to invite suppliers to make a bid. Many of the services industries including IT, Banks and others tend to use RFP for their sourcing processes.
RFQ – Request for Quotation – After a shortlist of qualified suppliers is determined, an RFQ is issued to a subset of suppliers for a quote on the products or services and is typically used to make an award decision. Most Engineering and manufacturing companies tend to use RFQ
RFT – Request for Tender – A formal request asking for offers from potential suppliers to supply clearly defined goods or services or works. There are often highly technical requirements and a prescriptive solution. Government and Municipalities as well as aerospace companies tend to use RFT. RFT is more rigid in that submissions from suppliers tend to be binding in nature.
MESH started as a captive solution developed by a fast growing supply chain company, MES for it’s internal use. Initial product was developed in 2013/2014 and has been modified since to be used for almost 4,200 RFQ’s, 400+ suppliers and used by 100+ team members. When customers started to be intrigued by the product and expressed willingness to have access to it, MES spun off this product and team into an independent company in 2020 – MESH Works.
MESH Works is a state-of-the-art sourcing platform, developed with just buyers and commodity managers in mind, especially for engineering and manufacturing companies. Unlike most of the sourcing products in the market focused on reverse auction and events, MESH aspires to be an enterprise software, which becomes a part of the workflow and daily use system for buyers. Learn more at www.meshworks.com.