Posted by: ahmedashfaque | August 17, 2014

What is SAP – request for quotation


In my last post, we had seen what SAP materials management is all about. In this post, we will see how request for quotation is mapped in SAP.

Request for Quotation (RFQ) is a very common purchasing method used by companies when they want to place bids on vendors for procurement of goods at the best price, service or any other criteria. Since a lot of time and effort is required in the entire RFQ process both of the customer and vendors, RFQ is used only when a substantially large purchase has to be made.

The RFQ process starts when the customer creates a RFQ document. in the RFQ document, the customer mentions the goods or services to be procured, quantity or value of RFQ, expected delivery date and other relevant information or documents. Customer then sends this RFQ to selected vendors. When the vendors receive the RFQ then they complete the queries mentioned in the document as well their price and terms of delivery. They then send it to the customer. When the customer receives all of the completed RFQ (bid) documents then they perform evaluation of each bid. the find out which bid is the best depending on their criteria for price, quality of service, previous performance of the vendor etc. The customer finally selects the best bid and rejects the rest of bids. The customer then places the purchase order to the vendor with the best bid.

In SAP, the entire RFQ process is mapped so that all aspects of the RFQ, bid, price comparison, vendor selection is done entirely online and mostly automatic. If the customer requires that each RFQ process should pass through authorization to ensure that the purchasing activity is monitored and sanctioned before the actual purchasing takes place then a release procedure can also be configured. In that case, the RFQ document has to be released by the relevant sanctioning managers before it can be posted to vendors.

In my next post, we will see how a subcontracting cycle works in SAP.

Advertisements

Responses

  1. […] my last post, we had seen how request for quotation works in SAP. In today’s post we will see how […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: