Introduction
In my last article, I looked at RFP/RFQ response complexity from the perspective of the sheer number of people involved in the response process. (In case you are wondering, you can read RFQ Response – Why is it so laborious? – Humaxa and RFQ Responses and Proposals: Why are they so laborious? Part 2 – Intake Process – Humaxa if you’d like to catch up.)
In this article, I’d like to talk about how a supplier figures out if it’s possible for them to competitively bid on a project, if the supplier can deliver on the requirements of the RFQ, and if the return is worth the investment based on the likelihood of winning the bid.
Before anything else, the OEM will probably look at three things in its potential supplier: its capacity, its expertise, and its financial stability. When evaluating if and how to respond to the OEM, the supplier will probably assess their capabilities in these three areas.
But how does a supplier conduct this high-level review? Let’s break it down.
- Capacity
- Expertise and Labor
- Compliance
When a supplier evaluates its own ability to meet an OEM’s expectations regarding production capabilities, the process probably involves a comprehensive self-assessment of resources, processes, and risk factors. After this self-assessment is done, the supplier will be able to confidently respond to the RFQ and know they can deliver the required volumes, quality, and timelines.
Capacity –
The supplier may look at Production Line Throughput. They may measure the maximum output of existing production lines to determine if current capacity aligns with the OEM’s volume requirements. What if there is a surge demand or an unforeseen spike in production needs? Will they still be able to deliver?
Equipment and Technology –
The supplier will need to confirm that their machinery and equipment are up-to-date and capable of producing to the OEM’s specifications. Will any additional tooling or technology upgrades be needed for new or complex components?
Scalability –
The supplier will need to assess whether any existing infrastructure would need to be adapted so that it could scale up to higher volumes, additional shifts, or expanded operations if needed. This could involve temporary or permanent expansions. Would these expansions be worth it?
Expertise and Skill Set Analysis –
The supplier will need to determine whether their workforce has the expertise required to produce the requested products, especially for specialized or innovative components. IF they are unsure, the supplier may want to identify gaps in skills and plan for training or hiring if needed. Would the ramping up of staff be justified?
Labor Availability –
It will be essential for the supplier to determine if there is sufficient staff to meet production needs, including flexibility for overtime or additional shifts. They may also need to verify that there are enough skilled quality assurance personnel to maintain OEM-required standards throughout production.
Compliance –
Compliance with OEM standards is paramount to winning RFQ bids. There are several steps a supplier can take to make sure they proactively address OEM standard requirements. It would be wise to proactively address process certifications that the OEM requires, quality standards, and technical specifications as well.
Process Certification –
As a first step, the supplier can check which industry certifications are relevant to the RFQ and perhaps, that the OEM has called attention to, specifically. Then the supplier can confirm that they adhere to the relevant industry certifications, such as IATF 16949 (automotive quality management) or ISO 14001 (environmental management).
Quality Standards –
Proactive steps can be taken by the supplier to review historical data around defect rates, rework rates, and adherence to previous OEM quality requirements. The supplier can formulate how to address any concerns the OEM might have regarding in-process quality control measures, such as poka-yoke (error-proofing), Six Sigma practices, or automated inspections. By getting ahead of any concerns,
Technical Specifications-
It’s important for the supplier to familiarize itself with the OEM’s exact technical specifications so it’s possible to verify that the supplier’s production process meets the OEM’s technical specifications, tolerances, and finish requirements.
All of this may seem to add up to the most laborious part of an RFQ. However, it doesn’t have to. There are many parts of the Feasibility Assessment that can be automated using AI. Please let us know if you’d like to explore how this could lighten your workload when it comes to RFQ responses.
Thank you!
Carolyn Peer
CEO/Co-founder, Humaxa
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