The rfp: pros and cons
The RFP is the standard practice by which purchasing professionals, whether single site or multi-site, engage in the business of sourcing their business. The benefits to the RFP approach are well-established:
- There are clearly-defined parameters
- There is a documented process
- The process gives each participant an equal opportunity
- The process gives the purchaser a clear snapshot of the market
The RFP does all of those things, has been doing them for a long time, and is a recognizable path by which purchasing professionals of all levels of experience, ability, and market knowledge can get the job done to management’s satisfaction.
The TPAI path to cost-reduction and product/process optimization explores the rest of what is possible.
The National Program path and process TPAI has been successful developing is focused on what’s next for the company that has received all of the value from the traditional RFP that they are going to get.
The results have flattened and the managers responsible for optimizing cost and best practice have challenged their departments to examine what else they can do. “What’s next,” they ask?
- The RFP offers a pricing snapshot of the market, but it is a market that is constantly evolving
- Circumstances that determine sourcing decisions change the day agreements are signed
- The products and specifications the RFP was based on may or may not have yet been optimized
The traditional RFP exposes the purchaser to unknown risk. When disparate vendors fill in boxes on RFP sheets, vendors submit purchasers to levels of supply chain risk of THEIR choice, not YOUR choice.
Finally, the traditional RFP is based on the perception of lower cost, without first assessing factors that drive cost. Factors which could alter the entire cost-basis are bypassed or left unexplored.
The TPAI path to cost-reduction and product/process optimization identifies, assesses, and then manages the unique factors that drive cost that are unique to your business, and your products, and your industry.
To take the next step in what is possible to accomplish, a company first has to honestly and passionately assess where it’s been, where it’s at, as well as where it wants to be. TPAI’s role is to facilitate then manage that process.
It’s not just a pallet. It’s part of your process as well as your products, as well as the market’s perception of the value of your company’s values. Everything you do is riding on it.