NEWS

RFQ Response – Why is it so laborious?

Why is responding to an RFP or RFQ so laborious – Part 1

Background

In conversations with Automotive Tier 1, 2, and 3 suppliers, I’ve come to realize just how complex the process of responding to an OEM RFQ can be. I decided to research exactly what made the responding proposals so laborious and perhaps more importantly, what could be done to improve the process.

A big part of what makes the process complex is the number of different people involved in the RFQ response itself. Let’s take a look at just a few of the players:

Typical Roles

Sales/Account Executive: Usually manages all of the external coordination and may be the primary point of contact for the OEM and is generally responsible for overseeing the entire RFQ proposal process. They need to understand all of the RFQ requirements and may ask the OEM questions if some items are unclear. Negotiation between the OEM and the supplier may be a part of this process.
Program Manager: Typically manages all the internal coordination and is responsible for the supplier’s proposal aligning with its capabilities. Oversees cross-departmental collaboration to gather technical, financial, and operational inputs for the proposal. May be responsible for digging through past proposals to see what – if anything – can be reused.
Business Unit Head: Identifies which manufacturing plants will need to be involved, approves resources, approves pricing and is responsible for internal negotiations.
Quoting Specialist/Purchasing Manager: There may be a Costing or Quoting Specialist, but that is not always the case. If there is one, that person usually develops detailed cost breakdowns, including materials, labor, overhead, and margins. They may be able to reuse cost estimate data from previous proposals and need to make sure pricing is competitive while meeting profitability goals. Component costs may also be a part of this person’s job.
Engineering Team: Almost always involved in researching the technical specifications in the RFQ, looking at the design details, and deciding whether the supplier could – and should – bid on the request. The Engineering Team usually ensures compliance with OEM standards and requirements.
Manufacturing Team: If involved, they usually assess production capabilities and capacity to fulfill the RFQ. They also provide estimates on lead times, tooling requirements, and scalability. There may be other variables this team would research; for example, in which country each part should be made and how much would each part cost based on where it’s manufactured.
Quality Assurance Team: If involved, they typically make sure that the proposal includes plans for meeting OEM quality standards and certifications. They may research lessons learned, operational metrics, and plant performance systems. For example, quality track records for plants in Country #1, Country #2, and elsewhere – the QA Team may use these metrics to make decisions. Can parts be guaranteed to be stored at a certain temperature? The QA Team will need to make decisions based on these data points as well.
Legal or Contracts Team: If involved, the Legal Team reviews the terms and conditions of the RFQ while identifying potential legal risks.
Finance Team: If involved, the Finance Team validates cost estimates and financial aspects of the proposal. Perhaps even more importantly, they ensure alignment with the supplier’s profitability and cash flow objectives.
Logistics Specialist: Responsible for planning packaging and freight costs. The Logistics Specialist has many factors to consider including supply chains, bottlenecks, labor concerns, etc.

Findings

After working with and hearing from so many disparate people and roles while navigating an RFP or RFQ from a manufacturer, it became clear to me how difficult it is to coordinate so many resources, especially when their interests may conflict here and there.

I started to ask myself: Is there a way to make this coordination easier? And if so , what – exactly – would make it easier in the age of Agentic AI? If you could hire an entry-level assistant to help with this RFQ response process, what would you have them do?