Strategic Sourcing professionals typically include the RFP as part of the process to effectively source materials and reduce prices. In my role I frequently review RFP documents, and have been on the receiving end of many RFP’s for strategic sourcing services. Often I find that the “one size fits all” approach to creating an RFP does not produce the best overall value or result.

For instance, I don’t know how many times I have read an RFP that asks “What are your company’s annual sales?” What does an answer to this question really tell a strategic sourcing professional? Depending on the scoring methodology, a company with $10 billion in sales that has not run a profit in 5 years and severe risk of closure could get a higher grade than a $1 billion dollar company with consistent 20% growth.

I’ve found the Yes or No approach of an RFP to have drawbacks as well. For instance, I recently saw an RFP that asked a series of Yes/No questions, including “Does your product include a Mandarin translation?” Due to the strict formatting instructions of the RFP, only Yes or No would be acceptable answers. In this case, No would be an automatic disqualification. This leaves no room for middle ground, such as “No, but the next release will include translation”.

The RFP approach should not be a substitute for understanding the market and engaging with suppliers. Often I find that upfront market research and preliminary supplier discussions will drive the questions I include in an RFP, and provide me with meaningful results I can use not only to qualify/disqualify suppliers, but to drive down pricing during the negotiation phase.

As a tactical solution, the RFP still provides backup to justify decisions made by the sourcing team, but it should never be a substitute for independent research and supplier interviews.
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Joe Payne

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