Using Request for Proposal in Sourcing Practices : Case study: CPS Color Group Oy
Pham-Keskinen, Kim Ngan Hoang (2013)
Lahden ammattikorkeakoulu
2013
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2013112919074
https://urn.fi/URN:NBN:fi:amk-2013112919074
Tiivistelmä
Under the pressure of increasing costs efficiencies in a volatile economic environment, procurement managers are forced to make the most sensible supplier selection decision. Strategic sourcing is an optimum approach that aligns procurement projects with the best suppliers. Such approach ensures all project needs are satisfied while releases the highest savings opportunities.
Request for proposal (RFP) is a strategic sourcing tool. It is a means of communication to inform prospective suppliers about the needs and requirements of a procurement project and encourage them to submit proposals that best satisfy these needs and requirements. The proposals will be evaluated and rated using an objective and structured scoring system to select the best supplier for the project being procured. This thesis is conducted to assist the case company – CPS Color Group Oy in using RFP in their sourcing practices.
The theoretical part of the study introduces steps in a strategic sourcing process and describes how an RFP can be employed in the process. Following are theories concerning different aspects of an RFP including its usage, advantages, content and proposal evaluation method.
In the empirical part, the sourcing practices of the case company in both direct spend and indirect spend categories are explored. The content and format of an RFP template are based on the theoretical framework and the preferences from the case company. Interviews with the procurement managers of CPS Color were organized to obtain more insights into the case.
The study utilizes a deductive approach and qualitative methods to collect and analyse both primary and secondary data. Primary data is extracted from interviews with procurement managers and the author’s own observations while working at the case company as a procurement trainee. Secondary data is gathered from books, articles, reports, websites and previous studies.
The study shows that sourcing practices of CPS Color fails to capture potential added value from suppliers due to many of its weaknesses in the sourcing process. As a result of the research, an RFP template is formulated to support the process. Further studies on the effectiveness and efficiency of using a RFP in a sourcing process are suggested.
Request for proposal (RFP) is a strategic sourcing tool. It is a means of communication to inform prospective suppliers about the needs and requirements of a procurement project and encourage them to submit proposals that best satisfy these needs and requirements. The proposals will be evaluated and rated using an objective and structured scoring system to select the best supplier for the project being procured. This thesis is conducted to assist the case company – CPS Color Group Oy in using RFP in their sourcing practices.
The theoretical part of the study introduces steps in a strategic sourcing process and describes how an RFP can be employed in the process. Following are theories concerning different aspects of an RFP including its usage, advantages, content and proposal evaluation method.
In the empirical part, the sourcing practices of the case company in both direct spend and indirect spend categories are explored. The content and format of an RFP template are based on the theoretical framework and the preferences from the case company. Interviews with the procurement managers of CPS Color were organized to obtain more insights into the case.
The study utilizes a deductive approach and qualitative methods to collect and analyse both primary and secondary data. Primary data is extracted from interviews with procurement managers and the author’s own observations while working at the case company as a procurement trainee. Secondary data is gathered from books, articles, reports, websites and previous studies.
The study shows that sourcing practices of CPS Color fails to capture potential added value from suppliers due to many of its weaknesses in the sourcing process. As a result of the research, an RFP template is formulated to support the process. Further studies on the effectiveness and efficiency of using a RFP in a sourcing process are suggested.