In our previous post we discussed how a fully complete RFQ tells a story about the buyer, the company, and the end product and its use. Filling out an RFQ is like doing an internet search: The more criteria you put in, the more refined and accurate the results.
In Part 2 of our “Decoding the RFQ” series, we aim to provide you with some RFQ best practices designed to help you provide as much information as possible, to speed the process, produce an optimal quote, and ensure you get the part you want.
1. The Raw Material and Its Source
If your vendor has to provide the raw material for your parts, that will have an impact on their costs and your quoted price. If you provide your own raw material, that puts you in control of the source and how much you want to spend. But what happens if you are unsure about the right material to use?
Customers often ask Metal Cutting to recommend a material for their application. While Metal Cutting cannot tell you which specific type and grade of stainless steel will work best for your part, we can point you in the right direction — but only if we know the details of your application and what you need your part to do. For example, we might suggest either 304 or 316 stainless steel, depending on whether machinability or chemical resistance is more important.
Here is where it is vital to do your legwork and find out what material will work best for your part. As the customer, you are in the best position to define your goals and select the material with the right chemistry for your application. If you are a third-party buyer or a purchasing agent who is not very familiar with the part design and what it needs to accomplish, going back to the engineer and getting those details will go along way toward helping you pick the right material and source.
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Quantity matters because it affects pricing, delivery time, and minimum charges. Yet, sometimes it is left blank on an RFQ because a buyer doesn’t know what the quantity should be or is hoping to place a minimum order. The difficulty is, there are other factors that affect what comprises a “minimum order.”
For instance, a vendor may have a minimum processing fee (or lot charge) of $400 that could cover anything from 10 parts to 1,000 parts, depending on the complexity of the cutting process required. Do you need simple shearing of a rod? Or do you require precision, square cut-off with no burrs and a tight OD tolerance? If the vendor must provide the raw material for the part, that will also affect the minimum lot charge.
In addition, the frequency of ordering can impact cost. For example, a buyer may indicate a minimum quantity but not mention the frequency. Is it 20 parts one time or 20 parts monthly? Or is it 20 parts one time for R&D that will lead to a large, ongoing reorder? If it takes an hour to set up a job and you run 20 pieces a month for a year, then you would pay for twelve hours of setup. However, if you run 240 pieces but take delivery over a year, you would only for for one hour of setup time.
Clearly, then, the size of your production run and ultimately how many parts you need, and how often, all make a difference in total cost and whether it makes sense to place a minimum order. If you need 10 parts now for a prototype but know you will need more parts down the road, it may be more cost-effective to place a blanket order for 10,000 parts and have them ready for re-order later as needed.
3. A Deadline That’s Real
More often than we can count, customers answer the RFQ question, “When do you need it?” with an emphatic “Yesterday!” We work in a world where, by necessity, orders must often be filled at a rapid pace. But since faster means more costly, it is worth thinking about whether an order really needs to be expedited.
If a project is not really ASAP and you know that the parts will eventually be used, it may be more cost-effective to have an ongoing, long-term, blanket order in place. That way, a set quantity of parts can always be on hand and ready for re-order as needed.
4. Your Target Price
Having a target price can help your vendor narrow down the options and determine what is feasible for your application and your budget. If you tell us you want a part as cheap as possible, we have to ask: Are you really looking for a cheap part, where a rough, angled cut that has burrs and is out of tolerance is sufficient? Or do you want a more precisely cut part, with sharp edges and tight tolerances? A realistic target price that considers your quantity and end use will help us better understand what you really need.
5. Your End Application
In theory, an RFQ is just a series of facts that a vendor can use to produce exactly the part you need, without regard to the end use of that part. However, there are times when not knowing the end use has serious implications. For example, if you need a stainless steel part for use in a medical implant, your RFQ must specify that end use so your vendor knows to use medical grade material. In addition, “straight” means something different if you are using a tube to dispense medicine into an exact part of the brain, 18 inches away or into a microplate.
Having an understanding of your application and the intent may also help your vendor recommend the process that best accommodates your end use and your budget. For instance, a buyer came back to Metal Cutting three times with a series of changing requirements: First, he asked us to quote the cut-off of some tubing to a specified length. Next, the buyer came to us with a request for a shiny finish, requiring the parts to also be tumbled — an added cost. Finally, he came back asking for ID chamfers on both ends of each tube, for reasons that were not explained. This would require bringing the cut, tumbled tubes into the shop and adding the chamfers, one at a time, on each end of every tube.
Had the buyer provided all those requests in the initial RFQ and told us why they were needed, we could have suggested a more cost-effective way to produce the part. For example, if the chamfers were added for ease of subsequent assembly, we would have asked if a lower cost radius was sufficient for the purpose.