Why Does the RFQ Process Often Take So Long? Here's How to Build a Procurement Workflow with AI

From RFQ Incoming to Selected Vendor, What Can Be Automated?

AI Automationcan help procurement connect the RFQ process, quotation collection, vendor evaluation, approval, to vendor determination in one workflow.

• RFQs can be sent to multiple vendors in a structured manner.

• Quotations can be collected and compared based on specified parameters.

• Vendors can be scored based on price, specifications, lead time, and SLA.

• Approval can be directed automatically according to the purchase value.

• RFQ and vendor status can be updated without repeated manual input.

For example, there is10 vendorwho received the RFQ. If procurement takes 15 minutes to review each quotation, the initial stage alone takes about150 minutesAutomation can eliminate these repetitive tasks, allowing teams to focus on negotiations and purchasing decisions.

What Does an Effective Procurement Workflow Look Like?

In practice, procurement isn't simply about finding the lowest price. The team needs to ensure the quotation meets specifications, deadlines, payment terms, and the vendor's ability to meet needs.

With AI Automation, workflow can be created like:

Purchase Request → RFQ → Vendor Response → Quotation Extraction → Validation → Vendor Scoring → Approval → Vendor Selected → PO

Each stage can have different rules.

1. RFQ is sent based on the needs

The process starts from a purchase request.

For example, the user needs100 unit laptopwith certain specifications. The system can retrieve this data and create an RFQ based on a pre-prepared template.

With AI Automation, RFQs can then be sent to appropriate vendors based on product categories or a list of registered suppliers.

The goal is not only to speed up delivery, but to ensure that the information each vendor receives is consistent.

2. Quotation Read and Mapped

Vendor quotations often come in different formats. Some use Excel, PDF, or other documents.

Data such as:

• Unit price.

• Total price.

• Lead time.

• Warranty.

• Payment terms.

• Quotation time.

can be extracted and mapped to procurement data structures.

With AI Automation, information from various quotations can be standardized before being compared.

3. Vendors are not only judged by price

Cheap prices are not necessarily the best choice.

Procurement can use scoring such as:

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

With AI Automation, the system can calculate a score based on the weight and display the most suitable vendor candidates.

However, scoring results should serve as recommendations. Procurement continues to review the vendor's commercial conditions and risks.

4. Approval Based on Purchase Value

Approval can also be made conditional.

For example:

≤ Rp. 50 million → Manager

Rp50–250 million → Manager + Finance

> Rp250 million → Manager + Finance + Director

With AI Automation, workflow can read transaction values ​​and determine approval paths automatically.

This reduces the risk of requests going to the wrong approver.

5. Selected Vendors and PO

Once approval is complete, the vendor status can be changed toSelected.

The workflow can then pass the information to the purchasing or ERP system for PO creation.

With AI Automation, procurement does not need to manually move quotation data from one system to another.

For software needs, companies can also use legal software for companies and officially licensed software so that the procurement system used has a clear license.

What needs to be prepared before automation?

• Map the RFQ to PO process.

• Specify the mandatory data in the quotation.

• Create a neat master vendor.

• Determine the scoring parameters.

• Assign weight to each criteria.

• Define approval limits based on transaction value.

• Define the primary system as the source of truth.

• Use API or webhook for integration.

• Add validation before vendor is selected.

• Keep an audit trail of every decision.

Start with purchasing categories with high RFQ volume. Once the workflow is stable, expand to other categories.

FAQ

1. Can RFQs be sent automatically to vendors?

Yes. Workflows can use templates and vendor lists based on need categories.

2. Can PDF quotations be analyzed automatically?

Can. AI Automationcan help extract information from documents, then map it to procurement fields.

3. Is the cheapest vendor automatically selected?

Not necessarily. The system can use scoring that takes into account price, specifications, lead time, warranty, and SLA.

4. Can procurement approval be made tiered?

Yes. Rules can be created based on transaction value, department, purchase type, or specific category.

5. Can the workflow be connected to ERP?

Yes, as long as the ERP provides an API, webhook, database integration, or other appropriate integration mechanism.

6. What if the vendor quotation is incomplete?

Workflow can provide statusNeed Reviewand ask procurement to carry out checks before the process continues.

7. Does procurement still need to do manual reviews?

Yes. Automation handles repetitive tasks, while commercial decisions and vendor risks should still be verified by the procurement team.

8. What KPIs can be measured?

Some relevant KPIs areRFQ processing time, quotation response rate, approval time, vendor selection time,and the percentage of processes that still require manual intervention.