Multiple Quotes Coming In, Which One Is Most Profitable? Here's How to Compare Them

How to Compare Vendor Quotations Faster?

AI Automationcan help procurement compare quotations from different vendors by capturing important data, matching formats, checking requirements, and making more consistent comparisons.

• Prices, quantities, discounts, taxes and additional charges can be compared.

• Product or service specifications can be matched to needs.

• Lead time, warranty, and payment terms can also be analyzed.

• Vendors can be given scores based on predetermined weights.

• Quotations that have odd data can be directed tomanual review.

For example, there is10 vendorwho provides quotations. If procurement takes 15 minutes to review one document, the initial comparison takes about150 minutesAutomation can reduce this administrative work so the team can focus on negotiations and final evaluations.

Why Is the Cheapest Price Not Necessarily the Best Choice?

In the field, quotations rarely follow the same format. Vendor A might include delivery costs, while Vendor B lists them separately.

With AI Automation, workflow can convert various quotations into data with the same structure.

For example:

Quotation Received → Extract Data → Normalize → Compare → Score → Review → Vendor Selection

With this format, procurement does not need to compare documents one by one manually.

1. Taking Important Data from Quotation

Quotations usually contain a lot of information.

Fields that can be used include:

• Nama vendor.

• Item number.

• Quantity.

• Unit price.

• Discount.

• Tax.

• Shipping costs.

• Installation fee.

• Maintenance fee.

• Lead time.

• Warranty.

• Payment terms.

With AI Automation, the data can be extracted from PDF, Excel, or other available document formats.

2. Matching Price Formats

Price comparisons must use the same basis.

For example:

Vendor A:Rp90 million + Rp5 million delivery

Vendor B:Rp. 98 million including delivery

Vendor C:Rp. 85 million + Rp. 15 million installation

If you only look at the base price, Vendor C appears to be the cheapest. Once additional costs are factored in, the total cost becomes more relevant.

With AI Automation, procurement can use fields such astotal_costas a basis for comparison.

3. Checking Specification Compliance

Price cannot be separated from requirements.

For example, a company needs a server with:

RAM ≥64 GB

Storage ≥2 TB

Warranty ≥3 years

Vendors who offer the lowest price but do not meet the specifications should not be immediately considered.

With AI Automation, requirements can be used as validation rules.

The results can be:

Compliant → Continue

Partial Compliant → Review

Not Compliant → Reject / Review

4. Calculating Vendor Score

Once the data is normalized, procurement can create scoring.

Example:

Price 40% + Specification 25% + Lead Time 15% + Warranty 10% + SLA 10%

With AI Automation, the score can be calculated automatically based on the weight.

However, scoring is not a substitute for procurement decisions. Conditions such as vendor history, negotiation skills, and partnership risks still require human judgment.

5. Marking Differences That Need to be Checked

Not all different data is wrong.

For example, Vendor A's payment terms are30 days, while Vendor B45 days.

These differences may actually be important factors in the decision.

With AI Automation, workflows can flag different parameters so procurement can compare them more quickly.

How to Make the Comparison Process More Consistent?

• Determine requirements before quotation is accepted.

• Buat template field quotation.

• Separate base price and additional costs.

• Use Total Cost as a basis for comparison.

• Set mandatory and optional requirements.

• Create vendor scoring weights.

• Determine the threshold for data that needs to be reviewed.

• Keep the original quotation for reference.

• Note the reasons for selecting the vendor.

• Create an audit trail for data and score changes.

• Connect workflow with procurement system or ERP.

• Use legal software for companies and officially licensed software.

Start with purchasing categories that have a large number of quotations. Once the workflow is stable, the process can be expanded to other categories.

FAQ

1. Can AI compare quotations from multiple vendors?

Can. AI Automationcan help extract data and compare quotations based on specified parameters.

2. Can quotations with different formats be compared?

Yes. Data can be extracted and then normalized to the same field structure.

3. Is it only the price that is being compared?

No. Specifications, lead time, warranty, payment terms, SLA, and additional costs can also be parameters.

4. Is the cheapest vendor automatically the winner?

No. Vendors should be assessed based on overall business requirements and criteria.

5. Can vendor scoring be done automatically?

Can. AI Automationcan calculate the score based on the weight determined by procurement.

6. What if the quotation is incomplete?

Workflow can provide statusNeed Reviewand ask procurement to check the documents.

7. Can delivery and installation costs be included in the calculation?

Yes. Additional costs can be included in the Total Cost formula to make the comparison fairer.

8. Does procurement still need to conduct reviews?

Yes. Automation helps speed up analysis, but the final decision should still be made by procurement based on business conditions and vendor risk.