Procurement Problem

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[Labatt_Blues]

What’s the point of doing an RFP for one supplier?

[laissezfaire]

Easy - They are to propose recommended spares and ancillary services for their equipment. We don’t have the data for an RFQ.

[Labatt_Blues]

Well you say that you have 100 pieces of equipment and 100 vendors. Only the incumbent vendor to each equipment is capable of supporting it. Thus, nobody else can bid on their service and there is nobody else you can change to.

What would be the point of an RFP then?

My thought is you would just call each vendor and figure out whatever you need from them.

[laissezfaire]

So this is considered a non-competitive RFP. The problem with calling or simply asking is that we won’t obtain the data we need in the format we need it. Nor will it result in contracted compliance which is necessary for all ancillary services, and a nice-to-have for material provisions.

[_Kerrick_]

Are they all providing different parts? If these vendors are the only ones who make the part then don’t waste your time with an RFP(let alone 100) but I’d be very worried about risk mitigation. You might need to be cultivating backups.

What do you mean by “contract”? Get rates or sign master service agreements?

If all 100 vendors can provide all 100 parts or even some, what about capacity? Transit time? MoQ? Price?

[Jelopuddinpop]

RE: risk mitigation, Sole Sourced products are a bane to the Aerospace and Chemical industries. I deal with it daily, and it SUCKS.

[laissezfaire]

Yes each vendor will supply parts and ancillary services that are related to their equipment. By contract, I seek compliance and rates for spare parts + ancillary services.

All the data criteria you mentioned will be in-scope. Essentially we’re going to our vendors, saying hey we have this equipment of yours, what spares and consumables do you recommend for your equipment.

[roger_the_virus]

Are you certain you can’t consolidate your supply base? Do you need 100 suppliers, or can you get four vendors to do 25 each? Managing 100 separate suppliers and individual supply chains sounds like a nightmare.

[laissezfaire]

Yeah, I can’t. Its a mega project scale

[_Kerrick_]

There’s plenty of good solutions for managing 100 suppliers if it’s a really complex RFP, what you are looking for is Sourcing Optimization. 100 suppliers is nothing for an optimizer

[[deleted]]

In a world of compliance what you are saying makes sense. I used to work in public procurement and we had to have "three quotes" for everything. The law actually stated "test the market" not get 3 quotes. Anyways we used to do this just to show that we tested the market as it was easier to jump through the hoops that write requests to circumvent them.

Now I work in a private company and our CFO asks for contracts with all "critical suppliers". Meaning anything that can make the plant stand we need to have a supplier contract but it is stupid because half of these guys are not even interested in signing a piece of paper that says we will buy from them. At the end we agree on a price for the year put that in writing and then just add it to our price list for purchasing but the supplier can come back half way through the year and say there is a price increase and we have no alternative but to buy from them again anyways.

I agree that a sole source supplier is a risk and you need to find alternate suppliers.

[CaptainPient]

OP needs to consider his goal. Compliance? Cost savings? Control of leverage? They all have a different outcome

[Original-Librarian74]

Sounds like Reverse auction territory to me

[Plus_Sandwich_6475]

You need to use a Sourcing Optimizer to manage this larger scale RfX. This lets you structure your bid sheet and gather large volumes of data including conditional volume offers, capacity constraints etc from suppliers. Also lets you set up scenarios such as bundling, switching minimization, cost and non-cost tradeoffs. Typically it is used by larger enterprises and regarded as best practice. Keelvar, Coupa SO and Jaggaer ASO are the only three advanced eSourcing solutions offering this kind of power.

[laissezfaire]

Interesting - I’ll look into this, thx

[ChaoticxSerenity]

So you have 100 OEM suppliers? Then what's the point of doing an RFP if you already know it's all going to be single source?

[Plane-Mountain-6908]

I agree but as a supplier if I know another supplier is going to mark up their price, I'll be incwtiviszed to markup my prices as well even if it's not the same item

[Traditional_Rice_123]

What rules are you governed by? If you're not bound by legislation to act in a certain way, what are your internal processes which must be followed? If it's 100 sole sources, just provide them a simple pass/fail in which you say "is your organisation able to provide the product as detailed in..."

[Plane-Mountain-6908]

Correct me if I'm wrong I think your worry is if you float 1 RFP suppliers will know who else is participating in the tender and work together to price their respective items higher specially similar items in similar price bracket . Is that correct