How to develop a good RFP

March 14, 2023
By Ryan Upshaw | A decade of experience with helping the supply chains of oil and gas companies

RFPs are a part of your world. You speak the code. You understand the jargon. But are you getting everything out of them that you need?

Let’s look at what questions to ask to make sure your RFP game is on point.

Where to start

When creating a request for proposal (RFP), you should consider many factors, but here are some of the most important.

Scope of work: This includes deliverables, timeline, and budget.
Evaluation criteria: Look for technical capabilities, experience, and references.
Submission requirements: Consider if there is a required format, type of content, or documentation.
Evaluation process: What timelines or milestones are out there? Who has decision-making authority?

You want to ensure that an RFP is thorough, and that it allows sufficient time for vendors to prepare and submit proposals.

What makes an RFP right for you?

Simply put, to fit your organization, an RFP needs to align with your goals and capabilities. The scope of work needs to be defined. The criteria to evaluate proposals needs to be clearly laid out. These aren’t “nice to haves.” They need to be there.

So, what does that leave you with? Who can you work with? I’ll answer that with another question.

Why is Fastenal good at RFPs?

As a supply chain company, we’ve developed a reputation for being effective at responding to RFPs. That’s because, with decades of experience, we have a deep understanding of the products and services that best help our customers. Using that knowledge, we tailor our solutions to each specific request.

What does that look like?

Strong customer focus: By being responsive and flexible in our approach to RFPs, we meet customers where they are in their process.
Comprehensive offerings: With a wide range of products, services, and technology, we provide complete solutions.
- What you need. > When you need it. > Where you need it.
Quality and value: We pride ourselves on offering high-quality product and adding value throughout your supply chain.

Questions to ask: Cheat sheet

There isn’t a one-size fits all approach to RFPs. But here’s a set of questions to ask to help you arrive at the best possible decision.

Starters
1. How should this RFP help your core competency?
2. What have you done to create a more resilient supply chain?
3. Do you standardize, rationalize, and substitute to drive down costs?

Disbursement/Delivery
4. How would you prefer product be delivered to your site?
5. How do you want the last mile to be handled?
6. Are you seeking ways to remove tasks/labor in the delivery and distribution process?

Technology / Digital
7. What technology are you using to manage inventory?
8. How is data being collected?
9. If you decide to start a vending program, are you ready to think about:

What makes a successful vending program?
- Packaging
- Replenishment
- Automation around min/max
- Control

Integration
10. Could you benefit from outsourced procurement activities instead of vendor assisted buy?

What would this process look like?

11. Would you want catalog punch-outs to be provided?
12. How do you measure current total cost of ownership?

Additional Services
13. What other value-added services could be provided via this RFP?

Industrial (inspections, calibrations, tool repair)
Safety (SCBA, gas monitoring, mask washing)
Asset management
Warehouse management
Fully outsourced procurement

Reporting
14. What KPIs do you need reported?
15. How is data collected and delivered in your organization?
16. Do you already know how reporting can create savings?
17. How do you want to see cost savings reported?
18. How do you communicate at each level: site, corporate, executive?
19. Do you want data reported for ESG considerations?

Contract Execution and Implementation
20. How do you limit cost of change?
21. How do you determine what each site needs?
22. How do you break down cultural barriers to change?
23. If you’re a large organization with a lot of decision makers and stakeholders: How do you communicate change and manage risk?
24. How do you categorize sites? For example, for a site with over 200 employees, what does best-in-class look like?

Other considerations
25. How can you make your organization better through this RFP?
26. What does your company do that nobody else does?
27. What does your new manufacturer vetting process look like?
28. How big is your category management team?

Don't forget to ask about...

Market Basket

Limit the amount of SKUs (1,200 SKUs or the SKUs that represent 80% of the spend)
No more than 1,000-2,000 parts should make up a market basket
Include MFG part numbers
Ask matches to be exact or you will have a hard time evaluating a proposal

Measurables

Payment terms
Rebates (growth incentive, volume, pre-bates)
Unit price
Cost savings guarantees
Other incentives (marketing)
Proximity

If you’re interested in hearing more about Fastenal or how we approach RFPs, reach out. I’m available via email at jupshaw@fastenal.com. I’d love to hear about what challenges your team may be facing.