Do you waste hours of your time sending and processing RFQs?
This is TIME you’ll never get back.
You’re in a constant flux of sending out RFQs and trying to find the right choice among hundreds of emails.
If you’re also charged with entering this data into your ERP system…now you just have MORE to do.
When I was the VP of Acquisitions at Skylink, I was charged with the responsibility of managing maintenance check projects and the daily requirements for our dedicated client accounts.
It was for commercial, regional, corporate and military fleets that ranged in size from 3 to 30+.
This meant having what we needed, when we needed it so our clients could reduce time managing material and reduce their total maintenance projects and material costs, helping to make them successful.
I was in the grind ALL DAY long, even with a team, so I feel your pain.
When you have this volume and fleet variance complexity, it’s much more than logging onto a listing database and blasting an RFQ to the world.
These platforms have been great, but they’ve also added a ton of complexity, and if done incorrectly, they’ll add more to your processing costs.
Once you factor in that Boeing is trying to dominate the aftermarket by owning ILS, Aviall, KLX and more to come, the information on these sites is feeding them data to self serve themselves.
Their goal is to control more of the aftermarket while keeping more money in their pocket…and out of yours.
In the last few years, we’ve seen more listing databases and eCommerce stores launched which means more hunting and searching various platforms for you.
In 2019, the total MRO demand for aircraft components for commercial aircraft is $15,895,090,691.
That’s a lot of searching…
Your first objective, above all else, is to know who your BEST material partners are.
It’s easy to log on to a listing database and blast the world your RFQ. It’s easy to compose an email and to blast 300 recipients.
But this approach adds more work and more complexity to your material sourcing.
It gives you added benefit of having options to make sure you’re not purchasing material that has inflated prices, but it adds unnecessary administrative work to you and your team.
As you evaluate your sourcing procedure, it’s fundamental to document who your trusted material partners are.
The people who you trust and can also give you valuable advice. Responsive people. The ones who solve problems as they arise. The ones who make your J-O-B easier and more fun.
Here’s a list of past articles that will help you determine who your trusted material partners are:
- This Quality Makes Your Aircraft Material Partner A UNICORN
- Choose A Partner With True Service Excellence
Watch out for your quote to sales ratio and “blowing up market.”
You’re sourcing material because you need to fulfill current or future demands.
You want to do this cost effectively while minimizing the amount of time doing it.
There are two things you need to watch out for to produce the right results for your operation.
The first is your quote to sales ratio. Are you requesting a lot of pricing from your preferred material partner but not ordering?
Just as you’d expect, they’re investing time to quote you, so they have to optimize this.
If you’re not ordering, or not paying, you won’t get the best service, and often, the best price you need.
Optimize this ratio as much as you can.
The second is blowing up the market. What does this mean you ask?
This means creating a false sense of demand in the marketplace where prices begin to rise.
An example would be for an APU you need, and you’ve already determined who your trusted material partners are.
But instead of working closely with one, you decide to send your RFQ to a list of 300 people on your email list.
It’s safe to say 99% of the 300 people will not carry the APU you need.
This also means a percentage of those people will begin sourcing the APU you need to quote you.
Since more people are asking for RFQs and only a select number or operations stock these APUs, a false sense of demand occurs…and prices increase, and added complexity is added into your supply chain.
Avoid this at all costs.
Try everything you can to increase your quote to sales ratio with your trusted material partner as the more you invest in them, the more they’ll invest in you.
And avoid blowing up the market. This adds more time and cost to you for no reason.
And since we’re talking about price…
Price is important, but your total cost is the most important. Can you consolidate orders?
If you mass email or send an RFQ, you’re likely to get a lot of incoming quotes to review.
This is TIME-CONSUMING.
The time you spend reviewing quotes impacts your total order processing costs.
On average, an operation will spend $60 - $250 every time they cut a PO.
If you’re ordering parts from all over the world, add on additional shipping and processing costs, and it gets costly.
And it’s a waste of your time.
When ordering, think strategically.
Can you order 10 line items from one company?
Even if they’re 10% higher on a few line items, you’ll save money on less shipping, processing and chasing costs.
Think strategically and don’t waste your time.
Once you’ve taken these steps, you’ll be in a position to source wisely. You’ll get more of your personal time back and reduce costs.
CEO Skylink, Inc.