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What is an RFQ?

RFQ stands for Request For Quotation. It is a sourcing document used to solicit pricing from suppliers. Most often RFQs are issued to known suppliers, although it is not a requirement. When they are sent out to unknown suppliers it is usually done to (i) identify new suppliers, or (ii) to satisfy a three-bid rule in the company or organization.

The typical RFQ details items requiring pricing. Detail is not needed when you are buying well-known items. These RFQs are also known as "Commodity" RFQs. When the sourcing activity requires a lot more detail then the RFQ process is often used as an introductory document after which supplemental documents, managed by products like Aestiva RFX, can be utilized.

The Types of RFQ Business Processes

There are two types of RFQ processes; those for sending out RFQs and those for receiving RFQs. In this wiki we discuss the processes associated with sending RFQs, not receiving them.

It is important to note that receiving RFQs is a difficult process to automate since RFQs typically come from external systems with varying formats. When receiving RFQs, often the best option is to cut & paste the RFQ data into templates (MS Word or Spreadsheets you set up in advance) without the use of special software.

Sending RFQs, on the other hand, are often automated. There are two major types of RFQs; commodity and non-commodity RFQs. Commodity RFQs are automated using products like Aestiva RFQ. Non-commodity RFQs are automated using products like Aestiva RFX.

The Best RFQ Software

There are a lot of automation opportunities if you send RFQs. RFQs can be generated using standard Purchase Order systems. They can be generated with more sophisticated "Sourcing RFQ" systems that manage the sending, deadlines, on-line responses, and later, the side-by-side comparisons of the supplier responses.

The Best RFQ software provides all of the above and integrates with your purchasing processes so, once a supplier has been determined, the RFQ can be flipped into a Requisition and/or a Purchase Order, and later automatically sent to accounting.

See Also

What Is An RFX, Purchase Order Software, The RFQ Process