Nowadays, sourcing suppliers is not only a critical but also a tedious task. To begin with, it is vital to identify and evaluate potential suppliers for the best value, both in terms of cost and product. In order to do justice to your sourcing attempt, you need to be well versed with some terms widely-used widely in the sourcing process. The most used are Request for information(RFI), Request for proposal(RFP), Request for tender(RFT) and Request for quotation(RFQ).
Let’s understand in brief each of the above-mentioned terms, after which we will discuss how they differ.
- 1. Request For Information (RFI): This is the very first step in the supplier sourcing process. An RFI (request for information) is a formal process for gathering information from potential suppliers for the procurement of particular goods or services. RFIs are intended to be written by customers and sent to potential suppliers. When you reach out to a supplier with an RFI, you are meanly soliciting them to provide you with the production capabilities and other information you think is essential for a project. This is more early on the process, often done before one of the other three requests.
- 2. Request For Proposal (RFP): A request for proposal (RFP) is a business document that announces a project, describes it, and seeks bids from qualified contractors for completion. This is a legal method for receiving elaborate proposals from various suppliers. This helps in taking purchase-related decisions. RFP is primarily used to seek solutions for project tasks.
- 3. Request For Tender (RFT): An RFT, or request for tender, is an open invitation to suppliers, asking them to send offers - usually as sealed bids - in a well-structured format. In simple words, It’s a formal petition to offer proper and clean products, both in terms of quality and price. Additionally, A tender is an invitation to bid for a project or to accept a formal offer. Tendering is a process commonly used by governments and financial institutions, as well as the public sector more broadly. “Tendering” is the term used to describe the process where vendors or suppliers submit bids for large projects by a specified deadline. The RFT document helps to clear out all the queries regarding the products and their pricing.
- 4. Request For Quotation (RFQ): A request for quotation (RFQ) is a business process in which a company or public entity requests a quote from a supplier for the purchase of specific products or services. RFQ can also be called: Call for bids (CFB) and Invitation for bid (IFB). It is used when a supplier submits a detailed proposal on a specific product/service/project. The buyer, after getting several quotations will decide which dealer to finalize for the product based on the quality and price quoted.
- 5. Below is the difference presented visually for RFI, RFP, RFT and RFQ:
- 6. Food For Thought: All of the above four steps are very helpful and useful for a buyer who wants to select a potential supplier smoothly and efficiently. This process if followed tediously helps you to find an ideal supplier in a fast, periodic and disciplined manner. If you are a supplier and looking for lucrative business offerings TigerTender is the right place for you. With more than 2 Million new Tenders/RFP/Auctions that are captured every year, we have become the most prefered Tender Portal worldwide.