Organizations often get into problems with their suppliers. Starting from slow delivery to bad quality of goods, irregular supply chain and high prices have a negative impact on the success of an organization. So, the entrepreneur has to decide how it can overcome such issues, how the lowest possible price range can bring the best possible product. She also has to make sure that the needs of her business are fulfilled on a timely basis. The company can reach a solution by beginning the relationship with her supplier with a competitive bidding process. In this article, we will discuss about documents for Request for Proposal (RFP) and strategies of project management. The framework and process of Request for Proposal is discussed in this chapter.
- The competitive bidding process tries to come across the best possible quotes for services or goods from vendors. The process is calculated by utilizing common set of standards. The RFP is also called Invitation to Tender or Request for Information.
- The Request for Proposal was a formal document that underlines the data regarding the company and the details of the services and products that are to be sourced from outside vendors. It states the requirements that vendors have to remember while responding to the bid and also states how the organization reviews the proposals it receives.
- Request for proposals are very time consuming for both suppliers and company, thus, they should be used carefully. For complex assignments, however, they can be considered the most effective way to source the services or products.
Using Request for Proposal
- Those who purchase should not use Request for Proposal while requesting for only pricing data from suppliers or if they only want to be a part of a competitive bidding activity.
- Request for Proposal may be an efficacious way to source, but it should not be utilized when cost is the only evaluation criteria.
- It should be used when a project is really complicated and deserves a proposal from a supplier.
- They are useful to devise innovative approaches to issues. It should be kept in mind that the Request for Proposal may take a lot of time and thus, can lead to delay in the completion of the assignment.
- Therefore, it is suggested that it should be used only when the advantages of receiving supplier proposals are more than the extra time it takes to create the Request for Proposal.
Advantages of Request for Proposal
- If the process of Request for Proposal is handled properly, the company will have a good control over the project risks for a complicated project.
- The company will also realize the benefits that it can gain while the project is going on.
- By utilizing the Request for Proposal, suppliers are also encouraged to put forward organized proposals that are evaluated using a methodology, which is quantifiable.
- By using a Request for Proposal, the suppliers come to know that the situation is going to be competitive. The bidding activity which is competitive in nature is at times the best procedure available for getting the best value and the best price.
- A Request for Proposal also provides the purchaser and stakeholders of the project the capability to understand the track of the project and the approach the suppliers utilize to execute it.
Disadvantages of Request for Proposal
- There are many disadvantages of using Request for Proposal
- They are very time consuming for the person who is making the purchase.
- Request for Proposal is time consuming as far as suppliers are concerned. Some suppliers will look at it and choose not to be part of it. These suppliers may also lose interest and feel that reduced chance of winning hinders from investing the time that is needed to create the proposal.
- It is often difficult to exactly summarize the needs of the project. This leads to poor responses from supplier or bad pricing. This is because the supplier was not exactly aware of the requirements of the project and what the company wanted to buy.
- It can be tough to exactly assess the responses of the supplier to a Request for Proposal. This is due to the reason that they can be elaborate or need special knowhow to evaluate.
Main Features of Request for Proposal
# Services or goods descriptions
The Request for Proposal should have a logical and comprehensive description of the services or goods that are required. In most cases of Request for Proposals, the services or goods are complicated and tough. Thus, they are difficult to describe elaborately. Yet, a proper description of these services or goods will aid in developing a highly focused proposal.
# A summary of problems in business
There should be a clear description of the issues of the business that are the reason behind this specific buy. It should be mentioned in maximum a couple of paragraphs and should provide suppliers an overview of the sourcing assignment and the reason behind its initiation.
# Miscellaneous data required for proposal
At times, there is extra data that suppliers will require in order that they can create a proposal. This data is generally the information about the internal operations of the company that the writers of the proposal will require. This data may consist of demand projections, usage metrics, internal survey outcomes and data of recent performance. The reason for this section is not to render suppliers with very little or a lot of data. In fact, it is to render them with the data that they require.
# Approach Suggestions
For Request for Proposals, in which the person buying know what she needs, it can make sense to suggest a track for the suppliers. Many organizations will not have this department as they are searching for creative ways to look at the problem and do not want to compel suppliers into a pre-planned framework.
To Wrap Up
From this article, it can be deduced that the Request for Proposal documents helps a business to get the best products at the best price.