Article 33 - RFQ

Article 33 - RFQ


Article 33: What is the Request for Quotation (RFQ) process?

What is an RFQ?

A Request for Quotation (RFQ) is a formal invitation sent to potential suppliers asking them to submit bids for providing materials or services[1]. It's a structured approach to vendor selection that ensures transparency and competitive pricing.

When should I use the RFQ process?

  • New material procurement: When you're buying something for the first time
  • New vendor evaluation: When seeking alternative suppliers
  • Company policy compliance: When purchases exceed certain value thresholds requiring competitive bids
  • Cost optimization: When you want to ensure the best possible pricing

What does the RFQ process include?

  1. Create RFQ - Define requirements and specifications
  2. Send to multiple vendors - Distribute to potential suppliers
  3. Receive quotations - Collect vendor responses and bids
  4. Compare proposals - Analyze pricing, terms, and conditions
  5. Select supplier - Choose the most suitable vendor
  6. Award contract - Formalize the agreement

What are the business benefits?

  • Competitive pricing: Multiple vendors compete for your business[2]
  • Transparency: Formal process ensures fair evaluation
  • Risk mitigation: Multiple options reduce supply risk
  • Cost savings: Competition typically drives down prices
  • Better terms: Vendors may offer improved conditions to win business

Which SAP modules are involved?

  • MM (Materials Management): Handles RFQ creation and quotation management
  • FI (Financial Accounting): Records financial commitments and comparisons

PP (Production Planning): For production-related material requirements


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