The choice between RFI, RFP or RFQ depends on the buyer’s stage in the procurement process and the specific information they need to make an informed decision.
Key differences:
- RFI is an early-stage information gathering exercise, while RFP and RFQ are more advanced stages of the procurement process.
- RFP is broader in scope and focuses on the supplier’s proposed solution, while RFQ is more narrowly focused on pricing.
- RFP allows for more qualitative evaluation of suppliers, while RFQ is primarily a price-based selection.
The main differences between RFQ, RFP and RFI in the context of procurement and supply chain management are:
Request for Information (RFI):
- Purpose: To gather information about the capabilities, experience, and qualifications of potential suppliers or vendors.
- Timing: Typically used early in the procurement process to understand the market and available solutions.
- Scope: Broad, open-ended questions to collect general information, not specific pricing or proposals.
- Outcome: Helps the buyer narrow down the list of potential suppliers to invite for the RFP or RFQ stage.
Request for Proposal (RFP):
- Purpose: To solicit detailed proposals from suppliers on how they would fulfill the buyer’s specific requirements and needs.
- Timing: Used later in the procurement process, after the buyer has a clear understanding of their requirements.
- Scope: Comprehensive, with detailed specifications, service-level agreements, and requirements for the supplier’s solution.
- Outcome: Allows the buyer to evaluate and compare proposals from different suppliers based on factors like technical capability, pricing, and approach.
Request for Quote (RFQ):
- Purpose: To obtain pricing and commercial terms from suppliers for a specific product or service.
- Timing: Used when the buyer has a well-defined need and is primarily focused on obtaining the best price.
- Scope: Focused on detailed specifications, quantities, and delivery requirements.
- Outcome: Enables the buyer to compare pricing and select the supplier offering the best value.
Example:
In a small town, the council wanted to build a new clock tower. They needed to find the right builder, so they used three different steps.
- First, they sent out a Request for Information (RFI). They asked many builders, “Tell us about your company and what you can do.” The responses helped the council learn more about each builder.
- Next, the council sent a Request for Proposal (RFP) to the best builders. This time, they asked, “How would you build our clock tower? What’s your plan?” Builders sent back detailed proposals, explaining their approach.
- Finally, the council sent a Request for Quote (RFQ) to a few builders. They asked, “How much will it cost?” The builders provided their prices, and the council chose the one that offered the best value.
By using the RFI, RFP and RFQ, the council made sure they picked the right builder for the job.
