An RFI was once a vital tool for gathering information about potential vendors, making selection processes fairer and faster. But they're turning into an increasingly pointless ritual.
If OEMs are going to find the solutions that can answer their needs in a disrupted marketplace, their supplier selection processes need to be reviewed and refreshed.
RFI: the orthodoxy that can’t be challenged
It’s been a fixture of the business landscape for decades.
An initial qualifying questionnaire that businesses who want to buy new services use to create a long list of potential candidates. It is the precursor to an RFP or an RFQ in which more specific information can be requested about pricing and possible delivery timelines. The RFI gives candidates some background to the company and a project while asking the supplier to describe their business, qualifications and approach.
The RFI is an article of faith.
The need for an RFI is an article of faith for many in the business world. It can be seen as an essential part of the shortlisting process for procurement. For them, it ensures:
- The same questions are constantly being asked of vendors
- The 'right questions' are always being asked of vendors
- Responses can be easily compared side by side
- A level playing field is created for competitors
- A documented, repeatable process is in place - that can’t be circumvented
Sticking to these principles, some say, ensures the business remains in complete control of the tender process and you’ll always end up with the right suppliers on the long list.
Except, we all know the truth...
The RFI has become an empty ritual.
Too often, the RFI has become simply a long (and pointless) box-ticking exercise. A ritual which must be ‘got through’ before we are allowed to proceed. Some RFI forms can take an hour or so to complete. Some can take most of a day!
And it’s a ritual that means less and less in a world where vital buyer information about a business is accessible on the internet and via dozens of different digital and business channels.
Many of the questions an RFI will ask is information that any good EMS will make readily available on their website, anyway. The business team who wants to access these services will likely already know the answers to the questions. They’ve probably been researching potential partners for months, asking their peers for suggestions and forming views about which vendors are likely to be the ‘right fit’.
But isn’t due process necessary?
Of course, there is an ethical dimension here. We do need safeguards to protect a selection process from abuse. But we all know stories where favoured candidates are given a heads up of the answers that will be required to get them through - so it’s hardly a fail-safe method.
What’s more - these checks can and will be done in other ways throughout the rest of the process, anyway.
The RFI & the death of an agile process
But then the actual RFI form enters the equation. Procurement insists. A standard form is sent out, maybe with some crude changes to make it relevant to a particular project.
This form is often long and doesn’t provide a useful benchmark for comparison. It’s just another form that needs to be filled out. In the end it operates as a hurdle for suppliers and a delay on decision making - what’s more it doesn’t add to the general sum of knowledge.
Looking at these forms, vendors often ask where’s the opportunity to clarify? Where’s the opportunity for the OEM to drill down to ask questions? What’s the point of these endless sections?
Where a form has remained unchanged for a few years the questions may simply not be relevant anymore.
What’s the risk?
This isn’t just about making suppliers’ live easier.
The danger is, if a supplier doesn’t fit an old paradigm of delivery or meet some criteria that was dreamt up years ago, you’ll be excluding excellent potential partners and limiting your commercial options.
If there are particular quantitive hoops that need to be jumped through (e.g. number of employees) one tick in the wrong box may end up denying your team access to what is genuinely the best option.
The market is in flux - the RFI process is not agile enough to capture this
Answers a candidate may give in a general RFI may not be true or relevant in a month’s time. After all, those geopolitical shocks just keep on coming. Disruption is affecting supply chains, playing havoc with prices and destroying business models overnight - what seems like a good idea now, may seem the crazy option in a year or so.
In the electronics sector, digital disruption is changing the typical profile and capabilities of an EMS provider. Your business may (in reality) need access to a different array of services that just aren’t being covered in the RFI. You may not even know it. Access to design services, Value Engineering services or specific supply chains could be vital to your success, but the question is never asked and you could end up without the right names on the list.
Of course, not all RFI processes are bad. They can be well run, the questions pertinent and to the point. They may, genuinely, be a decent filter for candidates. But they can equally just be a remnant of a world before the information and digital revolution, where the size and structure of the businesses you wanted on a shortlist would be uniform and predictable.
Now choice is wider, disruption is making new ways of working possible. You could be missing out by deploying old selection criteria. You could be missing out by not taking the virtual tour, visiting a site or talking to a provider one to one, before you make your selection.
Some would argue the RFI is dead. Others remain wedded to the process. But whatever your stance, it’s vital now to consider the way you are selecting your future manufacturing partners.
You should check the way you are assembling your shortlists is fit for purpose. You should check you’re asking the right questions in the right way. Because failing to review and refresh your approach to supplier selection may mean you are missing new and significant commercial opportunities.