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Purchase Basics and Your First Request for Quotation | Odoo Purchase – CBMS Odoo ERP
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Purchase Basics and Your First Request for Quotation | Odoo Purchase – CBMS Odoo ERP

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Learn everything you need to grow your business with Odoo, the best management software to run a company at

In this video, learn how to create your first request for quotation in Odoo Purchase.

Other lessons related to this video:
– Purchase Lead Times:
– Reordering Rules:
– Call for Tenders:
– Blanket Orders:
– 3-way Matching:

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19 Comments

  2. avatar
    @simecurkovic says:

    Here is a little explanation about commodities I share with my supply chain students:
     
    We discussed how companies are outsourcing commodities to increase value. 
    Value is lowering costs and improving performance (e.g., quality,
    service, and flexibility).  A commodity is defined as being something
    for which several qualified suppliers exist. Typically, buying
    organizations will use several rounds of the competitive bidding process
    to pick a low cost supplier.  Buying organizations will send out RFQs
    to get bids from suppliers.  RFQ stands for a Request for Quotation.  In
    other words, please give us a quote for this business.
    However,
    the data seems to indicate several iterations of the competitive bidding
    process does not get you the lowest price. Why? Suppliers pad their
    quotes from beginning to end because they know you will play this game. 
    Data indicates that the most effective way to get the lowest bid is to
    tell suppliers that they will only have once chance to bid/quote on the
    business.  If they really believe that, then they will deliver their
    best quote the first time around (because it is the only time). 
    However, very few companies actually make bidding a one shot deal.  Most
    companies are too greedy and are not convinced that the one time only
    cycle works.
    Another problem with competitive bidding is that you
    are just trying to get suppliers to low ball each other and that means
    you are just messing with their profit margins.  If you have a current
    supplier that charges $1.00 per part, and it costs them $.90 to make it,
    they have about a 10% margin.  If you have them rebid and rebid and
    rebid on the business, and then they agree to $.93 per part, you are
    indeed paying less per part, but you have reduced the supplier’s margin
    down to nothing.  Heaven forbid that you as a buying organization just
    sit down with your supplier and help them reduce their direct costs
    (e.g., labor and material).  Most of their costs are coming from labor
    and material which means there are probably some really big cost savings
    ideas there.  What if you could cut their direct costs by 30% and then
    you tell them you can still keep your 10% margin?  That supplier would
    say thank you so much because their margins do not change, they are just
    more cost competitive and probably end up getting more business because
    of it (and you now pay around $.70 per part).
    One final note. 
    We talked about how some companies are going beyond just outsourcing
    commodities to also outsourcing core/strategic parts.  It can be done
    effectively.  Chrysler has mastered it. They use things like
    co-location, long-term contracts, and legally they establish joint
    ownership of all design and mfg capabilities developed.  However, with
    core stuff there might only be 1, 2, or 3 suppliers to choose from. 
    Also, if it is core, chances are you need to go with one supplier
    because using more than one might be too complicated and sensitive.  For
    example, Chrysler outsources interior seating systems to one supplier
    (JCI).  JCI does not want to do business with Chrysler if they also use
    their competitor (Lear).  Ford will use Lear though and not JCI.  I am
    embellishing here a little to make a point.
    Companies do not use
    competitive bidding when they outsource core parts.  Why?  One, how do
    you use competitive bidding if there are only 1 or 2 suppliers to choose
    from?  You cannot.  Have you heard about the government awarding multi
    billion dollar contracts to suppliers like Halliburton with no bids? 
    People often ask why don’t they use competitive bidding to get the same
    price.  Maybe it is because they do not hire ISM students.  Some people
    think it is because our former Vice President (Dick Cheney) used to be
    the CEO of Halliburton and he has lots of stock in the company.  A $2
    billion contract from the government makes him $ 2 million dollars
    richer. Or, is it because Halliburton is the only supplier that can give
    the government everything they need and want?  You decide. It is
    probably a little bit of both.
    Also, usually, with core parts,
    price is not the most important thing. They of course care about price. 
    But how much do you know about price with something as complicated as a
    core part like seating systems?  It is not a commodity like a widget. 
    They will usually establish cost target goals and reward the supplier if
    they exceed those goals.   Usually, it is about performance (e.g.,
    quality, service, and flexibility).  That is why they usually use
    negotiation to find a supplier for core parts.  Junior buyers (like
    yourself) will use competitive bidding for commodities.  Senior buyers
    (you 5 years from now) will negotiate the terms and conditions of a
    contract with suppliers for strategic parts.

    Dr. Sime (Sheema) Curkovic, Ph.D., Valluzzo & Lee Honors College Faculty Fellow
    Professor, Operations/Supply Chain Management
    Western Michigan University, Haworth College of Business
    Schneider Hall Room 3246, Kalamazoo, MI 49008-5429
    Tel.: 269.387.5413;  E-Mail: sime.curkovic@wmich.edu
    "Better, faster, cheaper";  www.wmich.edu/supplychain

    "WMU Integrated Supply Management (ISM)…Nation's best undergraduate SCM
    program (Gartner 2014); 2nd in SCM technology (SoftwareAdvice 2015); 
    2nd in top global SCM talent (SCM World 2017)

    Vitae: http://www.wmich.edu/sites/default/files/curriculum-vitae/CurkovicVitae2017_0.pdf

    Sample Lectures & Should You Major in Supply Chain Management?
    http://wmich.edu/supplychain/academics/lectures

    Reply
  5. avatar
    @najamkhan7677 says:

    In your video why you added a price when creating a quotation before sending to vendor? Isn't that what missing in the quotation and thats why we raise the RFQ? What if I do not have agreement or contract with the vendor and want to send RFQ without the price?

    Reply

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