Internet enhances RFP/RFQ process
rfpMarket.com
By Mark A. Brunelli -- Purchasing, 2/10/2000
Issuing requests for proposals or requests for quotes (RFPs/RFQs) has long been a time-consuming task for the industrial buyer. In addition to the time it takes for buyers to handle needed paperwork, the traditional RFP/RFQ process is hampered by the lengthy chore of getting the word out. And once that is completed sufficiently, buyers then have to endure the waiting period for responses via fax, phone call or snail mail.Most important, this inefficient procedure may omit quality suppliers from the list.
Two new online businesses--rfpMarket.com and SupplierMarket.com--aim to improve the traditional RFP/RFQ process.
RfpMarket.com opened its virtual doors to the public in 1996 and is owned by Circle Strategies Inc., a company that builds Web sites for Internet start-ups. RfpMarket came about after some enterprising programmers at Circle Strategies came up with a simpler way to help them do their jobs.
"We found ourselves constantly working to line up graphic designers for Web projects [and] someone on our team had the bright idea to create a mailing list of graphic designers," says John Immel, CEO of rfpMarket. "Later we automated the mailing list using e-mail. We put two and two together and realized that we could become a marketplace where we publish requests to suppliers."
Since then, says Immel, rfpMarket has branched out beyond just finding graphic designers. Immel says the number of suppliers that can be reached through the site doubles every two months. As of last December, the company possessed a database of 13,000 providers of everything from computer products and services, to office supplies and industrial machinery.
RfpMarket is a free resource for buyers. To submit a request on the Web site, all buyers have to do is choose a category, fill out a short request form that specifies what is needed, when it is needed and contact information. Buyers then simply wait for suppliers to make an offer.
Steve Darby, vice president of product development for Plan Sponsor Exchange Inc., was making arrangements for the company's move to larger quarters. He turned to rfpMarket when charged with the responsibility of finding a company that could do some network consulting, and was very pleased with the results.
"RfpMarket has designed an extraordinarily efficient, clean solution which put me in contact with many firms that could meet our needs," says Darby, who is still sifting through proposals and researching companies that replied. "I got more than thirty replies to my request within about a week and a half. It didn't cost me a thing except for a little time."
Another player in the online request game is SupplierMarket.com. The Web site provides a free means for buyers to issue requests for quotes and has a database of thousands of industrial suppliers across the country. Buyers registered with SupplierMarket can issue a request in four steps: 1. Buyers post their RFQ online using forms provided on the Web site. 2. SupplierMarket matches buyers' requirements with suppliers that can meet the criteria. 3. Real-time bidding begins. 4. Buyers choose the supplier that best fits their needs.
Leo Brennan, vice president of materials management at the Simmons Co., says that in 2000 his company will realize savings of more than $400,000 dollars thanks to a single deal facilitated by SupplierMarket.
Brennan says his company spends upward of $5.9 million per year on polystyrene film, which is used to produce protective bags in which Simmons' mattresses are shipped. In an effort to save money and branch out beyond their regular set of suppliers, Simmons took its request to SupplierMarket.com.
Brennan was skeptical about whether the process would work for Simmons because the company negotiates supplier contracts on an annual basis. He wanted to find a supplier that would quote the price for a year's worth of polystyrene film deliveries throughout 2000, rather than all at once. "Our requirements were a little different than I think they were originally set up to handle," says Brennan.
"Presenting [a request for yearlong deliveries] on the Internet in a precise manner can be difficult," he says. But "the people at SupplierMarket.com gave us a lot of guidance in helping to package and present our requirements."
Brennan says he specifically likes the fact that SupplierMarket.com allows all potential bidders to see what other suppliers are bidding, because it makes the pricing process even more competitive.
"It works," says Brennan. "It's a neat way to get your requirements out there in front of a lot of suppliers quickly and efficiently."
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