Auto supplier moves to new quote management system
By Staff -- Purchasing, 3/21/2002 2:00:00 AM
The quoting process at automotive products maker Trelleborg Automotive, South Haven, Mich., was becoming too complicated. To simply issue a request for quote (RFQ) to its suppliers, Trelleborg had to run the RFQ from sales, to its estimating group, who would transfer it to the purchasing group, who would send it to suppliers. Once the quote got to suppliers, they invariably had questions that came back to the buyers, were then passed on to the estimators and the engineering group, and then back to the buyers to give to suppliers so they could create quotes.
All of this communication was done by a combination of phone, fax and e-mail, which meant a lot of phone tag and a lot of follow-up back and forth. Once a quote was submitted, someone had to enter it into both the purchasing database and the estimating database. The bids were evaluated and finally the business was awarded. The process required inputting data into Microsoft Access, Excel, Word, Lotus Notes and PFS First Choice, a small DOS-based database. It was commonly viewed as an archaic system for the biggest division of a $1.6 billion company.
"The administration of the databases alone was a pretty significant job in addition to following all the information and keeping track of when it was due and who was doing what," says Janet Lubeck, global administrator for Trelleborg. With this in mind, Trelleborg decided to look into a new system for managing its quoting process online. Trelleborg hired a professional consultant and together evaluated several RFQ products and settled on the NexPrise collaborative commerce solution as its primary B2B procurement system in the U.S. Under the new process, the quote comes in from sales and is automatically transferred to the estimating group, which initiates it into the NexPrise application. The estimating group assigns suppliers to the line items of the components of the quote based on keywords that define a supplier group. The estimator is updated on keywords and can then simply send an RFQ to the appropriate group.
To speed up its supplier enablement, Trelleborg bought ASP software licenses from NexPrise and has suppliers reimburse them as they come online. Training consists of two-hour classes held at the Trelleborg facility and the company created a supplier manual to provide instructions on receiving an RFQ, reviewing the information found in the request, and providing responses. Several test RFQs are set up to verify supplier connectivity and to give suppliers an opportunity to work with the product before going live.
"When the supplier logs into the system, it takes them immediately to the new RFQ where they can review the request and attached drawing package," says Lubeck. "Suppliers can ask questions of the buying team and receive responses within the system. Buyers and estimators can post frequently asked questions and responses to provide suppliers with as much information as possible in order for them to provide accurate bid responses."
Trelleborg is so impressed that it moved virtually all of its new quoting activity for direct materials to this system, totaling more than 1,100 RFQs to date. There are still around 260 production suppliers that do not participate in these RFQs, and therefore are not in the system, but the company is considering requiring the suppliers to purchase a reduced visibility license to allow the tool to become the primary communications vehicle with suppliers.
The list of benefits is topped by reduced data entry but Lubeck says remote access to the bid process and real-time feedback are also major benefits of the new system. "We have an executive group that is constantly traveling the world, and now they can log into the system from anywhere, review the quote information and make informed decisions regarding future business opportunities."
Trelleborg is also using a reverse auction tool outside the NexPrise system, averaging about 15-20 auctions per month. "We started using them to re-source existing business, but now we are moving toward using them to source new programs. We use different providers in the U.S. and Europe. We see reverse auctions being used in the future to award new programs to suppliers after they've participated in the normal RFQ process. We'd give the competitive suppliers from the original RFQ the ability to vie for the program once we had a confirmation from our customer that we had obtained the business."
Trelleborg is expanding its implementation globally with the vast majority of its German purchasing group online now. France is next on the list along with several others.
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