Written by Marijn Overvest | Reviewed by Sjoed Goedhart | Fact Checked by Ruud Emonds | Our editorial policy
What is RFx? — Definition, Process, and Example
As taught in the Junior Procurement Management Course / ★★★★★ 4.9 rating
What is RFx?
- RFx stands for “Request for X,” meaning “Request for Anything,” which can take the form of an RFQ, RFP, RFI, or other types of procurement request.
- RFx allows companies to gather essential information, compare options, and secure the best price for their requirements, making it valuable to teams seeking cost-saving and quality suppliers.
- RFx helps ensure transparency, competition, and efficiency in supplier selection, ultimately improving procurement outcomes.
Whatis RFX?
RFx means Request for X, literally known as “Request for Anything”. It represents different types of procurement requests depending on what is required during a specific stage in the procurement process. RFx is a formal and structured approach used by organizations and businesses to gather necessary details from potential suppliers. These requests can include:
- RFQ (Request for Quotation) – for pricing and cost details.
- RFP (Request for Proposal) – for detailed project solutions.
- RFI (Request for Information) – for preliminary market insights.
- RFB (Request for Bid) – for seeking bids from suppliers offering the lowest cost for goods or services.
- RFT (Request for Tender) – for inviting bids for specific projects or contracts, commonly used in government procurement.
- RFQual (Request for Qualifications) – for assessing the supplier’s qualifications, experience, and capabilities for a project.
- RFS (Request for Solution) – for seeking innovative solutions to a particular problem.
- RFP (Request for Partnership) – for exploring potential partnerships between organizations and suppliers.
It greatly helps in the procurement of goods and services needed by the organization as well as the end result of the entire operation. In addition to acquiring the said examples above, RFx also contains some information about the organization or business that executed it; information such as, but not limited to, organizational or business goals, scopes, visions, and specifications.
In summary, RFx is a systematic way of requesting information, bids, or quotes from potential suppliers and providers in the procurement process.
RFx Process Steps Explained
An RFX shall identify what you are looking for in a good or service, and allow the vendor to make its best offer. It may seem difficult to create RFx, but it doesn’t have to. RFx does not create itself, so here are some helpful hints on how to make RFXs:
1. Identify the need
The first step is the identification of the need to purchase goods, services, or projects by the organization. It shall be carried out by either a procurement team or project stakeholders. This would relate to a particular product, service, or project that the organization needs to meet its objectives and should be as specific as possible in order to get the best results from suppliers.
2. Define Requirements/Specifications
The procurement team will work together with relevant stakeholders in order to identify the specific requirements once they are determined. It shall include the specification of technical characteristics, quality standards, quantities, delivery dates, and any additional essential criteria.
3. Choose the RFx Type
The team shall decide which type of RFX is the most suitable, taking into account the nature of the procurement. It could be an RFP (Request for Proposal) for more complex projects or services, an RFQ (Request for Quotation) for straightforward purchases, or an RFI (Request for Information) for preliminary research.
4. Prepare RFx Document
Once you know how to find what you are looking for, the RFx needs to be written. Make sure it’s clear and brief; the supplier should be in a position to understand what you want with no difficulty. It shall contain all the required information related to a tender such as duration of works, technical requirements, evaluation criteria, conditions, and instructions for submitting tenders, all of which shall be prepared by the procurement team.
5. Identify Potential Suppliers
Potential suppliers or service providers that can meet these requirements are identified by the procurement team. Research on the markets, supplier databases, and contact with known suppliers may be used for this purpose. Once they are identified, send the RFx.
6. Clarifications
Suppliers may ask questions or obtain clarifications regarding the RFX document in order to get a better understanding of their requirements at this stage. In order to ensure a fair and transparent tendering process, the procurement team shall provide appropriate clarifications.
7. Supplier Response
Suppliers shall submit their replies no later than the specified deadline. Responses may include detailed proposals (in the case of RFPs), price quotes (in the case of RFQs), or relevant information (in the case of RFIs).
8. Review and Selection
You need to review the proposals from vendors and make a decision as to who will be awarded contracts. This could involve technical evaluation, financial analysis, compliance checks, and other relevant factors.
9. Negotiation
In the event that it’s necessary, negotiations with selected suppliers are carried out in order to finalize the terms and conditions. The selected supplier shall receive the contract or procurement order after negotiations have taken place.
10. Contract Execution and Management
The contract with the selected supplier is created and executed stipulating the terms and conditions, deliverables, payment terms, and other details relevant to both parties.
The procurement team shall keep a close eye on supplier performance and compliance with contractual requirements throughout the duration of the contract period, in order to achieve successful project execution and delivery.
Types of RFxs
We defined what an RFx is and provided its process flow. Now it’s time to take a look at its various types. There are many types of RFxs, but here are the three main types used in the procurement process.
Now we have seen the three most used types of RFx in Procurement, but there is so much more. Here are the other lesser-known types of RFxs:
1. Request for Bid
Similar to an RFQ and is used when seeking bids from suppliers to provide goods or services at the lowest cost possible.
2. Request for Tender
In government procurement, an RFT is used in a similar way to the request for proposals. The invitation to tender is used for the purpose of inviting bids from suppliers in respect of a specific project or contract.
3. Request for Qualifications
The RFQual shall be used to determine which suppliers are qualified in terms of their qualifications, experiences, and ability to carry out specific types of projects. This ensures that the selection process for suppliers is simplified.
4. Request for Solution
In cases where an organization has a particular problem or issue and is looking for innovative solutions from potential suppliers, it will be using the RFS. This study focuses on the creative aspects of solving this problem.
5. Request for Partnership
A request for partnership is used when the organization is looking to establish a partnership or collaboration with other businesses or organizations. The objectives and conditions of the partnership are set out in this report.
Why Incorporate RFx in Procurement?
The use of RFx in procurement enables organizations to make more informed purchasing decisions, allowing them to get the best price available for their needs, with a view to ensuring transparency, competition, and fairness in supplier selection procedures.
Furthermore, it is possible that RFx could contribute to streamlining the procurement process, saving both time and money. In addition, RFX may contribute to improving the communication of purchasers and sellers as well as providing valuable market information.
Example: How RFx Streamlines Procurement Decisions
Consider a scenario where your company needs to source raw materials for a new product line. Instead of directly reaching out to a few known suppliers, you decide to use an RFQ (Request for Quotation) to open the bidding to a wider pool of vendors. By incorporating the RFx process, you outline specific requirements, including material specifications, quality standards, delivery schedules, and payment terms.
When the RFQ responses come in, you have a detailed comparison of prices, terms, and delivery options from various suppliers. This transparency not only ensures that you select the most cost-effective supplier but also fosters a competitive environment where suppliers are motivated to provide their best possible offer. Additionally, the structured format of the RFQ allows you to quickly assess each supplier’s capabilities and offerings, ultimately saving time and ensuring that your procurement decision is backed by comprehensive market information. This example illustrates how using RFx can streamline decision-making, enhance supplier communication, and optimize procurement outcomes.
Incorporating RFx in Procurement
In my experience as a procurement manager from Ahold and Royal Friesland Campina, the RFx process can be used for both simple and complex procurements.
It could be used where there is only one potential supplier (for example if you negotiate with A-brands and you need this brand in your store) and where there are several potential suppliers (for example with white labels, private labels, or raw materials).
However, the goal of the process would probably be different. If there is only one potential supplier, this process is mainly used to gather information or formalize agreements.
When there are several potential suppliers, the RFx process could be used to receive several competitive bids and leverage market competition.
Therefore I would definitely recommend using it when you have several suppliers who can deliver your products. The main advantage here is that it will help you to identify new potential suppliers for the same products.
The basic rule here is that when you can increase the number of suppliers where you can buy your product, it will increase competition during the negotiation phase and will definitely lead to better conditions.
My Insight on RFx
For this article I will be sharing my personal insight about RFx.
1. Can you share a personal example of RFx? What can readers learn from this?
“As a procurement manager at Ahold, I utilized the RFx process several times a year for each category, including an RFI, RFP, and RFQ phase. We used this when purchasing our own brand, and looked for multiple suppliers that could provide us with the items we needed.
The use of the RFx process ensured that the procurement process proceeded in a structured manner. All suppliers received the same questions and information from us, allowing us to receive the same information from all suppliers.
This enabled us to make a good comparison of what each supplier could deliver, and primarily focus on the most important part of the tender, which is the price”
2. What should readers know about RFx?
“It’s common for many businesses to purchase products from the same supplier for years. If you have a good relationship with your supplier and feel you are getting a good price, you might not see any reason to change. However, I would recommend implementing a process to evaluate your options.
By doing so, you’ll be able to notify your current supplier that you’re reviewing your options, which could lead to better conditions. Moreover, you might even find a better deal with a new supplier.”
3. What is the biggest misconception about RFx? What do most people get wrong about it?
“The common misconception is that if incorrect information is fed into the system, the output will also be incorrect. Hence, it’s important to ensure that accurate information is provided during the RFI phase.
Another is that most people do not spend enough time during the RFI phase, which results in unclear instructions for the suppliers. This ultimately leads to delays and more time being spent in the end.
Lastly, make sure you know the suppliers and the quality of the products upfront. If there are multiple suppliers available, it is advisable to have the option of switching between them, as this can help during the negotiation phase.”
4. How do you ensure that the RFx process remains transparent and unbiased?
“To ensure transparency and fairness throughout the process, make sure that the only difference between the parties is the price. This means that all the parties can provide the right quality, quantity, and services.
If everything is on the same level, you can really go for the best price during this phase. However, if there is a difference in service/quality or service offered then value this difference by a percentage or an amount.”
5. What strategies do you employ to promote innovation and encourage vendors to propose creative solutions in response to RFx documents?
“It is important to promote innovation and creativity in the procurement process. However, it is best to do this before the RFx phase. When you reach out to suppliers, it is important to be clear about the information you need from them.
If you allow suppliers to add other solutions during this phase, you’ll never receive quotes or the right information from other suppliers to create competition in purchasing products.
Therefore, it is best to have already incorporated creative solutions for this process. I did this by always maintaining good contact with my key suppliers before this process. This way, I could determine if there were any new trends that needed to be integrated into the RFx process”
Conclusion
In the realm of procurement, the term “RFx” encapsulates a spectrum of requesting processes integral to each stage of procurement. This article sheds light on the essence of RFx, its definition, significance, and explores the various types commonly employed in procurement processes.
By delving into the RFx process flow and dissecting its types, readers gain a comprehensive understanding of the pivotal role RFx plays in informed purchasing decisions.
I have created a free-to-download, editable request for information (RFI) template. It’s a set that includes a PowerPoint file and a Word file.
You can use and tailor them to your needs when you want to ask for information about the materials you want to buy for your procurement process. I even included a video explaining how to use the templates.
Frequentlyasked questions
What is RFx?
RFx means Request for X, literally known as Request for Anything is a formal and structured approach used by organizations and businesses to gather necessary details from potential suppliers. It represents different types of procurement requests such as requests for quotations (RFQ), requests for proposals (RFP), requests for information (RFI), and other requests required during a specific stage in the procurement process.
Why use an RFx?
Using RFx in procurement enables organizations to make more informed purchasing decisions, allowing them to get the best price available for their needs, with a view to ensuring transparency, competition, and fairness in supplier selection procedures.
What are the three main types of RFx?
The three main types of RFx used in Procurement are Request for Information (RFI), Request for Proposal (RFP), and Request for Quotation (RFQ).
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.
