Request for quotes (RFQ)

Request for quotes (RFQ) processes can be vary for each OEM-contract manufacturing engagement. However, there are some aspects of this activity that can be deemed universal in the industry.

In spite of the frequency in which RFQs take place, errors and omissions do occur, on both sides. Troubles can surface for a number of reasons such as:

• too few people are assigned to the process by the OEM
• those that are assigned might not collectively, or individually, have access to all of the information needed in order to make timely appropriate unilateral or, group decisions, when necessary to do so, or
• unilateral decisions are made when a consensus is required, also..
• there is not enough depth of experience within the OEM (there are still a tremendous number of companies in industry that are 'new' to outsourcing)

Add to this, many companies might already be outsourcing some of their records keeping or finance functions, which can further complicate things.

Not providing accurate information in some key ares of a business program to be outsourced or, mistakingly omitting some areas of information when presented content to the contract manufacturer will more likely than not result in inaccurate quotes, late surprises or, at best, several re-quote processes that waste valuable time for all involved.

Some of the areas where errors can often occur in a request for quote process include, but are not limited, to:

• Bill of materials (BOM)
  Many BOMs that companies may feel are accurate actually contain top-level systems inaccuracies. One way to address this is for OEMs to allow prospective contract manufacturers to examine a built-up, FGI product while checking off items against the BOM, by line-item
• Product, systems test specifications
• Assembly and fabrication specs not to the most recent revisions
• Inaccurate supplier history
• Manufacturing process instructions
  Tthroughput yields, process takt times, and other manufacturing-specific information is helpful no clearly communicated
• Tooling requirements
• Country or, localization customs (export/import - exim) requirements
• Product handling and labeling requirements

To help companies through this process, below are just some of the items/information OEMs requesting a quote should plan on providing when interacting with a contract manufacturer:

• Pre-production run schedule
• First customer ship (FCS) target date
• Quarter, annual volume/quantities
• Packaging requirements
• BOM with approved vendors identified
• Assembly drawings
• PCB fab drawings (with information on current suppliers where applicable)
• Manufacturer and manufacturer part numbers for all parts/components
• FAB drawings for all mechanical parts
• Gerber data (where possible)
• Customer contact list (with issue escalation pathway identified)
• Test requirements and history (i.e., ICT, functional, environmental)
• Workmanship standards
• Product sample
• Shipping and delivery requirements
• Requested quote due date
• Companies may also want to include information on expected cost reductions and warranty requirements.

Meanwhile, the following items are sometimes requested but executives are cautioned about showing their hand when it's not absolutely necessary:

• Costed BOM
• Target pricing

VentureOutsource.com, March 2005

    

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