Automation of RFQ process for manufacturing companies

Why is the manufacturing sector automating request for quotation (RFQ) processes?

How much time do your employees spend preparing requests for quotation, searching for the right vendors, and comparing the offers received? Even if a company has an extensive supplier database, every non-standard request requires drafting messages, sending them to the appropriate companies, and then analyzing responses, which are often sent in long PDF files. All of this makes the RFQ (Request for Quotation) process consume much more time than it should.

What happens if the employee responsible for the request goes on vacation, misses a message, or a supplier's response ends up in the spam folder? Without an implemented system for handling RFQ processes, it is difficult to track the status of individual requests and keep an eye on deadlines. As a result, delays in purchasing necessary materials or parts can even lead to production downtime.

Automation of sending requests for quotation helps eliminate many of these problems – it streamlines the preparation and sending of requests, the collection of responses, and the comparison of offers. This allows employees to focus on choosing the best purchasing terms instead of manually handling the entire process. We will describe how such an automated process for sending and monitoring requests for quotation could look in the next paragraph.

How does a procurement request system improve the RFQ process?

Automating the RFQ process is not just about streamlining the sending of requests for quotation, but primarily about implementing a system that connects production staff, the purchasing department, and administration in one place. As a result, information about requirements, vendor offers, and completed orders flows automatically between departments, reducing errors, delays, and the need for manual data transfer.

What could such a process look like?

1. Submitting requests by production employees

A production employee submits a request via a dedicated form, specifying the required product, delivery deadline, technical parameters, and the area the purchase concerns, e.g., equipment maintenance. All information goes directly into the system, ensuring the purchasing department receives the complete data needed to prepare the request for quotation.

2. Automatic preparation and sending of requests for quotation

The purchasing department uses a dedicated order management panel to select suppliers from the company database. The system automatically prepares emails based on the submitted request and sends them to the selected suppliers. The system also allows sending a single request to multiple companies, which significantly speeds up the collection of offers and enables their subsequent comparison.

3. Managing the supplier database and offers

The system allows for adding new suppliers to a shared database and gathering information on past cooperation. Employees can rate delivery punctuality, product quality, and communication. This allows the company to gradually build a database of verified suppliers, meaning subsequent requests for quotation do not require searching for new contractors every time.

Additionally, in more advanced solutions, it is also possible to automate the process of searching for new suppliers. This can work via a built-in AI chat that, based on criteria entered by employees, searches the internet to find the most suitable companies. This way, employees do not have to manually search for products, as they receive a ready-made list of potential suppliers in just a few moments.

4. Automated collection and analysis of supplier responses

By integrating with your email inbox, the software automatically logs supplier responses and assigns them to the relevant inquiries. The system can also extract prices, delivery dates, and product availability from the body of emails and PDF attachments. RFQ automation goes beyond simply saving this information to a database; it transforms it into structured, standardized data that staff can easily organize and compare. This allows offers submitted in different formats to be analyzed in one place, eliminating the need for manual data entry. Automation can also be expanded to handle information received through other channels, such as SMS or phone calls, provided they are properly recorded.

It is also possible to build a negotiation management module – by gathering all offers in a single application, employees can see which suppliers are worth negotiating with for a better price. To facilitate this, the system can send automated emails.

5. Real-time status monitoring

Thanks to a shared system, employees in all involved departments have access to up-to-date information about the purchasing process. They can check whether a request has been sent, whether a supplier has submitted a quote, and whether an order has already been placed. Automation and real-time data synchronization reduce the need to contact the purchasing department to check on a status.

If a seller does not send their quote within a specified timeframe, the RFQ automation system can automatically send them an email reminder.

6. Archiving purchase history and full process control

The system maintains a history of requisitions, sent RFQs, supplier responses, and placed orders. Why is this important? Imagine a situation where a production employee writes down a request on a piece of paper and hands it to the purchasing department, but the delivered product turns out to be incorrect. Who made the mistake – the production employee, the person placing the order, or the vendor? Without a documented history, it is difficult to determine. Thanks to RFQ process automation, all information and actions are archived in the system, making it easy to check at what stage an error occurred and who was responsible for specific tasks.

Excel or a dedicated system?

Many companies use Excel spreadsheets to manage RFQs, and there is certainly nothing wrong with that as long as it does not negatively impact work efficiency. For smaller businesses where only 2-3 people are involved in the RFQ process, using a simpler solution may even be more cost-effective. Working together on a single file should not cause major problems, and controlling changes is relatively easy.

However, the situation becomes complicated when a dozen or even several dozen employees use the same spreadsheet. It then becomes difficult to determine who deleted important information from row 345 and why gaskets of the wrong size were ordered yet again (with 10 pieces already sitting in the warehouse that no one needs but returning them is not cost-effective). It sounds absurd, but many manufacturing companies operate exactly this way – processes scale up, but the system (or rather, the lack thereof) remains the same as it was at the start of operations.

It is worth remembering that implementing dedicated software is not just about automating the sending and monitoring of RFQs, but also about greater data security and better control over the entire purchasing process. An RFQ process managed in such a system is measurable and transparent – you can monitor its progress in real-time, check the history of changes, and easily determine who requested a given product and who was responsible for the subsequent stages of the order.

Summing up – how can you automate the RFQ process in a manufacturing company?

First of all, it is worth starting by checking which activities in your company take the most time and cause the most problems. Perhaps your purchasing department staff spends hours on the phone with suppliers, responses to inquiries end up in spam and go unnoticed, or perhaps the biggest challenge is communication between the purchasing and production departments?

Once you have identified the problematic areas, it is worth starting with a so-called quick win, which means automating the part of the process whose improvement will bring the company the greatest benefits with relatively little effort.

Remember that the software presented in this article is just an example of what an automated process for sending and monitoring RFQs can look like. In your company, improving the purchasing process may require a completely different approach. It is not always necessary to implement a new system – sometimes it is enough to appropriately expand existing solutions, for example, by allowing employees to continue using Excel but integrating the spreadsheet with other company systems and automating data flow. Automation does not have to mean giving up your current ERP or other company tools. In many cases, new functionalities can be integrated into the existing environment, allowing employees to continue using solutions they are already familiar with.

If you want to find out what RFQ automation could look like in your company, contact us and schedule a free consultation with a business process automation specialist: https://www.sagiton.pl/en/contact