Tools for Complex and High-Volume Sourcing
RFP - Request for Proposal
The RFP is the most versatile and comprehensive sourcing tool. It invites suppliers to propose both a technical solution and a commercial offer.
When to Use an RFP
- The category is complex (services, IT, consulting, custom manufacturing)
- You want suppliers to propose innovative solutions
- Evaluation criteria include quality, service, capabilities, sustainability - not just price
- The contract will be long-term and strategic
- Stakeholder alignment requires a structured evaluation process
Key characteristic: Binding, subject to negotiation. Weighted scoring (technical + commercial).
Reverse Auction (e-Auction)
A real-time, online competitive bidding event where pre-qualified suppliers compete on price.
When to Use a Reverse Auction
- Specifications are standardized and locked
- At least 3 to 5 qualified and willing suppliers (competitive tension is essential)
- The category is in the Leverage quadrant (Kraljic) - high spend, low risk
- You have a reliable reference price to set the starting point
⚠️ Caution - Reverse Auction: Never use a reverse auction for strategic categories where the supplier relationship matters, or where quality/service differentiation is significant. Auctions commoditize the relationship and can damage trust with strategic partners. Likewise, never run an auction with a predetermined winner - it is unethical and will eventually come to light.