Hackett Group Content

How to Put Together a Comprehensive RFP (Part 2)

Any time a company bids out a key category, the goal should be maximizing the value received from the supplier. Therefore, buyers need to receive a well-structured and comprehensive bid from suppliers that will allow the buyers to select the best overall supplier. In making this effort to select the best possible supplier, efficiency is crucial. Buyers must develop an RFP and evaluate the responses in a timely manner in order to keep pace with their other purchases and responsibilities. If buyers decide to ignore this advice and select their suppliers primarily based on price, their suppliers’ performance will continue to vary just like Eli Manning’s QB rating.

Effective Supplier Evaluation: The Price is Right… How about the Supplier?

Many companies today are trying to move procurement towards a more competitive and efficient bidding process. Some of these companies have policies that require buyers to solicit a specific number of bids when procuring certain items, and oftentimes, that selection process may be entirely centered on price. Some buyers might simply ask three suppliers to send in a price for a certain item. Others may take the next step and send out a formal RFP (Request For Proposal) with several qualitative and quantitative criteria for the suppliers to fill out. A common issue is that despite sending out a formal RFP, the buyers still select the supplier based solely on price, while ignoring other critical qualitative factors.

Procurement’s Role in M&A

Procurement is an oft overlooked but critical function in any merger. Forecasted synergy savings are commonly not achieved in an integration because rigorous processes and activities are not properly planned, understood, and executed. However, with proper oversight of processes and activities before the deal is closed and immediately afterwards, Procurement can ensure that it delivers the synergy savings that CEOs and CFOs look for. The best way to approach integration is to think about the work in several different waves: pre-deal closing, during the first 100 days, and continuous improvement.