Module 4 · Procurement cycle + SAP

RFQ · RFI · RFP · Finalize PR & Place PO

Quotation workflow, bid comparison, vendor selection, PR finalization, purchase order creation, PO types and approval controls in SAP.

Course reading

Understand the process

Part 1

Ask suppliers the right question

An RFI (request for information) explores which suppliers are capable. An RFQ (request for quotation) asks for a price against a clear specification and quantity. An RFP (request for proposal) invites a broader solution when the method or scope is not yet fixed. Choosing the right document prevents comparing answers to different questions.

If three warehouses each buy the same packaging separately, they may receive three prices. Combine the demand and send the same specification, delivery terms and response deadline to qualified suppliers. Then compare price, freight, lead time, payment terms, quality history and ability to meet the required volume on one sheet.

Part 2

Turn an approved need into an order

Before issuing a PO, confirm that the PR has an approved quantity, budget, specification and delivery date. Record why the selected bid won, especially when it is not the cheapest. Create the PO with the correct supplier, item, plant, tax and delivery terms; route it through the required approval controls and obtain supplier acknowledgement.

The PO is the reference against which goods and invoices will later be checked. A vague PO simply moves a disagreement downstream to receiving or accounts payable. Keep the bid comparison, approvals, PO and acknowledgement together as an audit trail.

What you must take away

RFI gathers capability, RFQ gathers price, RFP gathers a solution — do not mix them.
A bid comparison must be like-for-like on specification, quantity, Incoterm and payment terms.
The PO is the contract: what is not in it does not exist.

In the SAP process

Create the RFQ from the purchase requisition and maintain the quotation prices.
Compare quotations, then assign the source and convert the PR to a purchase order.
Check PO text, delivery schedule, Incoterm, payment terms and release strategy before sending.

Case study

Same part, three different prices

Setting. A buying desk with three plants purchasing an identical fastener independently.

Problem. Each plant negotiated separately, and the smallest plant paid the highest price for the largest urgency.

How it was investigated

Consolidated twelve months of purchase order history by material and plant.
Normalised prices to the same pack size and Incoterm.
Checked whether specifications were genuinely different or just described differently.

What was changed

Ran one combined RFQ for the consolidated annual volume.
Awarded a framework agreement with call-off orders per plant.
Locked the agreed price into the purchasing info record so manual overrides became visible.

Outcome. One price for one part across all plants, with urgency buying reduced to a documented exception.

Lesson: Consolidate the demand before you negotiate the price. Volume you cannot show, you cannot claim.

Illustrative composite of common shop-floor situations — no client names or confidential figures.

Practical template

Bid comparison sheet

Compare offers on the same basis and record why the award was made.

Supplier	Price	Incoterm	Lead time	Payment terms	Warranty	Technical score	Award rationale
Supplier B	94.50	FOB	18 days	45 days	12 months	8/10	Best delivered cost, proven quality

How to use it

Convert every offer to the same Incoterm before comparing.
Score technical compliance separately from price so the decision is defensible.
Attach the sheet to the purchase order — this is the document an audit will ask for.

Download workbook & KPI template (PDF)

Quick quiz — check your understanding

1. An RFQ asks suppliers for:
2. An RFP is used when:
3. Common SAP transaction to create a purchase order:
4. A purchase order is:
5. Why compare at least three quotes?

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