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Request for quotation (RFQ)

Request for Quotation (RFQ) describes the process for requesting a formal offer. What sounds grandiose is actually known to every buyer: a business partner is asked to submit a legally binding offer.

Request for Quotation (RFQ) describes the process for requesting a formal offer. What sounds grandiose is actually known to every buyer: A business partner is asked to submit a legally binding offer on the basis of which a purchase contract can be concluded. This sales contract can be a single order, but also a longer-term framework or call-off agreement. RFQ is therefore a fundamental tool in both operational and strategic purchasing.

The origin of this process lies in the legal basis, because a sales contract of any kind cannot be concluded unilaterally, but requires both an offer and an acceptance by the other party. The offer can be in the form of an order catalog and request the buyer to draw up a sales contract; or in the form of the aforementioned formal offer. All relevant agreements are made in the offer process. The buyer tells the seller the desired quantities, lot sizes, delivery dates and, as the most important factor, the exact type and quality of the desired product.

In case of new business relationships, technical changes or products outside the usual catalog, it is usually advisable to first clarify the feasibility of the product via a "Request for Information (RFI)".

If all relevant parameters are clear to the seller, i.e. the supplier, he submits an offer which, in addition to the data already mentioned, primarily states the prices and feasible delivery dates. In addition, there are the commercial contractual agreements, i.e. the payment terms, discounts, bonuses and the freight and delivery terms. Legal issues often arise here, because a seller usually offers on his "general terms and conditions of sale". The buyer, on the other hand, will try to place an order and thus a sales contract under the terms and conditions of his own company.

If a framework agreement is even negotiated, further agreements such as contract duration, minimum purchase quantities, non-disclosure agreements, standard delivery times, contractual penalties, penalties for late payment and extension options are an essential part of the negotiations. In case of operational purchasing, the focus lies clearly on delivery dates and prices.

However, there are great advantages for both strategic and operational purchasing if the RFQ process is handled directly via the inorder ERP system. Existing article and drawing numbers can be integrated directly into the request. The offer parameters received, including prices, lot sizes and delivery times per product, can in turn be fed directly into the database. The system specifies the format so that all relevant data can be imported directly and without any transmission or conversion losses.

inorder helps to structure the inquiry process and to map the contractual agreements in a practical way. If the data is imported correctly, purchasing can generate its orders directly on this basis. Duplicate entries, manual transmission and thus the risk of formal errors and loss of time are reduced to a minimum.

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