Quoting
A quoting process may be defined as the process where one, if there are no set agreements or contractual obligations in place, agree with a supplier regarding price, delivery time, payment terms and the product specification.
Output from the quoting process
Single transaction with agreed terms.
Contract for agreed terms within a defined period.
Rejection of the request from supplier.
Sorting out and declining bad offers.
Some products have a fixed price independent of the buyer, while other buyers are given a special price for specific products. Receiving different prices depending on product and buyer is common practice in certain industries. This is mainly due to some companies being larger and expecting contractual prices on a larger product range, while smaller companies must purchase using standard prices. In addition, one could also say that the supplier’s power in the market certainly will affect the flexibility, nor the lack of flexibility, when trying to negotiate terms.
This process is usually started with a request for quote, where information regarding price and availability are gathered and forms the basis of the purchase.
After a quote is received from the supplier, there will be a period where the quote is open for acceptance or rejection. Any negotiations regarding price and/or terms in addition to acceptance or rejection, are logged in the ERP system.
Tasks involved in this process
Receiving a request for quote
A request for purchase is received from an internal department, typically sales or production.
Create a request for quote
Make a one-time-request for a certain quantity of a product.
Send the request for quote
Send the quote to one or several recipients by mail or print.
Follow up on the request for quote
Track status changes when validity date is approaching.
Register quotes
Register quotes from the suppliers based on the received feedback on the request.
Select quote
Select and start a purchase order process for the best suited offer received from the suppliers.
Mark rejected quotes
Quotes received from the suppliers which are rejected and archived.