Importance of Automated RFQs
No doubt that RFQ processing is the first and the most important step for any procurement department, irrespective of the industry vertical. If not done properly, the procurement manager is likely to undo many changes in the future and in most times lead to complete cancellation of the present RFQ and creation of a new one. While a basic RFQ management software, can take care of many such needs, main challenges that every procurement manager face is handling the volume of enquiries that need to be sent, collection of quotations from vendors and evaluated regularly meeting the timelines and deadlines of the project at hand.
With the best eProcurement software in place, Chief Procurement Officers of top organizations throughout the world can boast to operate high volumes with smaller teams and thus significantly lower labor costs. It is imperative that the following basic features should be present in the RFQ management module or the Online eTendering of the Source to Pay software.
Our recent survey among many procurement executives showcase that the following are the common thoughts that crop up after sending an enquiry/RFQ:
Humans are prone to errors. It is almost impossible to be precise, accurate and fast at the same time. This is where digitization in procurement comes to help. It helps in keeping the work organized, neat and makes the work quick, efficient and hassle free.
The entire procurement department can be segregated into 5-7 major divisions, basis the item category they deal with. It is imperative that all these divisions have a single common format to send out enquiries / RFQs to suppliers, a common format to receive clarifications from suppliers and respond back, a common format to receive quotations from suppliers and most importantly a common format to evaluate the submitted offers.
SMART templates is a unique feature of mjPRO, a Cloud based procurement software used as a Sourcing Solutions For Large Corporates. It helps procurement managers to categorize the type of buy, have multiple pre-defined and interactive templates, shows dynamic breakdown of all price elements and most importantly one standard Comparative Statement per procurement category. This gives the flexibility of having multiple Comparative Statements for the different procurement categories present in any procurement organization, but also the commonality across the same purchase category.
Now a days almost all large corporates have shifted their record keeping and data repository into an ERP, which beautifully connects the internal landscape – Procurement, Finance, Accounts, User department, Admin, Senior Management etc. But what an ERP lacks is the connection that is needed with the external stakeholders i.e. vendors.
While an e-Procurement software can provide that, it would be extremely tiresome if the ERP and the e-Procurement software do not exchange data between themselves. The procurement manager would then have to toggle and toil between the 2 systems, downloading all the data that is available in ERP & upload into Vendor Connect Portal / eProcurement Portal, so as to establish the connection with the outside world. And do the same again when the vendor quotations are received.
This is redundant and should be avoided. mjPRO, an in-house Sourcing platforms in India, has the ability to integrate both on real time (API mode) as well as scheduler basis (batch mode) with all the major ERPs. While the API based integration exchanges data instantaneously, scheduler based integration can be brought down to as low as a 15 minute interval i.e. 96 scheduler runs per day
Some materials are always bought very frequently, mainly because of their nature of the product or the nature of their demand or the extreme volatility in prices which makes setting up Rate Contract awfully difficult. For such materials, constantly purchasers need to be present in the procurement cycle. While one cannot eradicate the occurrence of the buy, there is always an option to automate the procurement process, so as to get relieved from the mundane regular activity. This frees up the bandwidth of the procurement manager which leaves him time for other value added jobs. This is achieved by the power of digital procurement through an eProcurement software.
Machine Learning (ML) has come a long way since its inception. ML concepts can be used to solve this as well. mjPRO has incorporated ML based features which allows all materials procured within a finite period of time, get converted into automatic RFQs with the same set of vendors and Terms & conditions of the last instance and publish itself to the vendors with absolute no human involvement as well. This has helped clients using mjPRO to reduce their RFQ making time from a few hours to as low as 15 minutes from the time of raising of material requisition in the ERP.
This feature of the product makes it extremely dynamic in nature. The product thus has the ability to learn after every procurement cycle & then check the presence of any previously procured item (at an item code level) within an incoming PR. This is a unique feature of mjPRO which has extremely benefitted large corporations who had always wished to increase their productivity and operate the procurement with smaller teams.
Purchase Managers, especially dealing with frequently bought items like MRO, AP items etc strive to bring about standardization in their daily work. A primary need for them, which not only allows them to work fast, but also increases their productivity and accuracy at work. One such feature high in demand among many procurement professionals is the system ability to clone any previous tender with all previously used vendor base, Terms & Conditions, quotation submission duration etc.
The tender cloning feature is a manually triggered feature of the mjPRO product, which allows a purchaser to clone any previously created RFQ into the current selection of items, enabling not only the time taken in creating an RFQ, but also negates the possibility of slippages of any vital information.
With automation driving procurement processes and redefining our traditional approach to buy things, AI and ML has definitely made life easier for procurement professionals enabling them time to concentrate on value added jobs in their sphere.
So is your e-procurement software enabled with these automation features and help you reduce your RFQ creation hassles. Let us know.
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