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The Art of Tendering · Speaking of Supply Chain

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You're listening to Speaking of Supply Chain, a meboch podcast. This is a
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show for logistics professionals looking to learn more about the latest innovations in supply chain.
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Each episode will feature a conversation on topics such as mitigating supply chain disruption
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and reducing risk, current automation trends, sustainability initiatives, and more. Let's
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dive right in. Hello, and welcome to Speaking of Supply Chain, where
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we explore trends, current events, and innovations impacting the logistics and supply chain
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industries. I'm your host, Ellen Wood, and I am joined today by
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Richard and Caesar from our UK office in Mebok, and we are going to
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be talking about what happens in the tendering process and what difficulties companies tend to
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face when they are going out to tender and trying to do it alone with
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their internal teams. Welcome Richard, and saysar Hi Lan, thank you.
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So this is such an interesting topic and I know that this is something that
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we do very often within our company, and I know that clients out there
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they often go out to tender, it's just part of their buying process.
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And so I can't wait to talk about this onto our actual conversation today about
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Yes, the tendering process. So, especially when operations and logistics teams are
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well established within a company, it's assumed that when they're going to be making
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a purchasing decision that these people are the internal experts. They should know what
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to be able to do. But we know from our side, from the
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me box side, that that is not always the case. That they don't
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always have the acumen to make that purchasing process go smoothly for their company,
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and it's incredibly difficult. It's it's not necessarily hard in terms of the tasks
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that need done, but it is complex. So I've been part of a
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number of RFPs, RFQs, RFIs. There's lots of different acronyms for this
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request for information question RFQ, request for quote and proposal. Yeah, quotation
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or proposal. So whether it's just information, whether they need a full solution,
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or whether they know what they need and they just need a price for
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it, depending on what's being purchased, they can be super simple or really
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complex. And you guys have written a white paper recently about why companies should
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seek external advice before they go live with this process. So tell me a
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little bit about what you what you detailed in this white paper. Yeah,
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we we normally here in the UK office in Oxford, where we normally work
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with or tender is UM what we call the four wings of tendering, which
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is software which includes WMS WCS for example UM warehousing, which is a kind
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of project that is on the rise because of Brexit. A lot of companies
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are trying to open new operations in the UK and very related also to the
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warehousing topic is transportation. For example, if if if you have a new
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warehouse, you need new transportation. Of course, sometimes we manage tender projects
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which are like a bundle of these of these two wings, and the last
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one is MH and automation, which is also quite related to Brexit. But
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also COVID companies have realized how sensible the house sensitive. Sorry, there are
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supply chains and they're short staffing the issues that can bring them so they are
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trying to use their resources more efficiently, so are using more automation. So
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those are the four wings of tendering that we use and that we took into
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account when we wrote this article or white paper. However, we consider that
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no matter how complex tender project is. These ten tips are applicable to every
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yeah yeah, yeah, no matter if it's a new warehouse or stationary supplies.
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Right, you can apply to ten of them, ten of these tips
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to every kind of tender definitely. So like like the idea behind of like
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the white paper is to identify Okay, what are like the ten made pillars
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or of tips, like all of the companies should follow up in order like
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to to reach an a successful a result in the elevendering processes. Because we
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as an amiva So sorry, Ellen, No, I was just going to
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say, so a successful tender would be what that they purchase They ultimately make
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a decision and purchase and are happy with that purchase. Yes, yes,
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like that is like that is like the main goals like hearing me, But
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we have like these expertise like working with different level of company size, We
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have like the expertise in designing where hooses again right now, most of like
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the questions that the customer ask to us is hey, like we want way
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to implement like an automation solution. We think about like what is the solution
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or the technology that we want, but we are not sure about if like
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these player is like the best for us. We don't want to pay like
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an over rate because they approach to us first, so they wanted to have
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like an objective an objective party who helped them like to take that level of
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decision. And in that point it's like yes, like an advisor, not
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yeah. And and and it's not only about making the purchase itself, because
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basically anybody could do it. But a successful tender for us is that in
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the long run, the client is still happy with that decision that we or
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any other externals or help them to do to take that decision. So that's
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a successful tender indeed. So like for me, it's like when you wanted
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to get married, because you're going to have an a partner for a long
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time, for a long term. So we really to think carefully, okay,
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because if if you're going to to say, hey, I am going
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to implement like a new highway technology, Okay, it's not only like that
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implementation, because there is coming like the maintenance. Then there is coming like
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a train in So probably is not an a relationship for one of the years.
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We're talking about like five ten years of relationship lay the same happen if
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we are looking for an a new trepl or like an a new double MS.
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Okay, So like there is always like these things, like it keeps
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to you attached to the supplier or to your partner for a long time,
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so it's important like you have a good relationship with him or so what we're
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what we're doing essentially is going after the risk mitigation here that this risk is
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a potential bad relationship and we are trying to avoid this client having buyer's remorse.
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M indeed, so it's not just about finding the right product for what
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they need, although we you can help with that, or the tendering process
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can be part of that. We're trying to find which solution is going to
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fit best. I mean that's that's also part of maybe a concept design or
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but even in the tendering process figuring out who is going to participate in this
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tender, who's going to bid. But there's also the aspect that says,
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are you touched on it, that this external set of eyes is going to
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be able to share some of that cross functional or cross industry best practices.
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So you know, a customer coming in and saying, you know, I'm
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in this industry, and I'm I'm in this role in my company and we
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know that we need something, but is this the best is are we going
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after the right thing in the first place? So is that a situation where
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you've come into a tendering project and told the customer, um, actually,
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no, this is not what you should be looking for. We need to
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back up a step and make sure that you're actually shopping for the right thing
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to meet your needs rather than just okay, you're you're looking to buy X,
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y Z pre you know, piece of material handling equipment. I can
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help you with that. It's stepping back a little bit further, and is
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this going to meet your business need? Okay? I am mutually if I
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understand properly la the question, but I think so like so, sorry,
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no, you're fine. I can I can rephrase that. So, you
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know, when we're when you're going and talking with a client about a tendering
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project that they have, do you ever advise them to say you're not you're
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not asking the right questions, You're not looking for the right thing. You
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think you need this, But based on what I know about your company,
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based on what you're you're explaining to me about what you're trying to do.
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Actually you need to look at something differently, yes, like yeah, this
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is happening. Okay, yeah, no, no, you understand your point.
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Yes it's happening. Normally, what we do, it's like to receive
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like the needs of the customer, but not only like in terms of words,
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okay, like we we we really like like to receive l the data
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as me back, like we always analyzed data. We are in a company
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who focus a lot of under data use totila these numbers, like to transfer
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or convert them in requirements or physical requirements. So in some cases, yeah,
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like the customer scale, what we're looking for is like an like an
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amounal solution, like to reach atilate this rootput. And they always think they
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think about a v and as for example, like very narrow idle solution,
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but like considering that level of flows, that level of stock and try late
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to use it like a maximum potential height. It's more convenience like to think
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about like an automated solution. So in these cases, like we challenge that
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original idea okay and try late to orientate it like to the customer. Why
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because when we go late to the next phase with that with the corresponding suppliers.
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If we only think about like an a manual solution, we are only
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going to to look for suppliers who acking. But like that is not going
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to be an a proper solution, Unlike the idea is like to have an
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a solution to be sustainable in the long term, because like this Monel solution
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has like an a limited time of life considering that the flows that he has
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expected like to have of it. So like, depending on like what is
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like the situation. Okay, what is like the data or what is the
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horizon that the customer is looking for? Like, like, the solution could
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be vary, and normally what we do is check it it like with a
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customer, what is the requirements in terms of data? But this is not
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only apply like for for all of these four winds that Creature explain. For
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example, for an a double GMAS, we need like to look for processes.
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So what are your current requirements in terms of processes? Okay, like
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this is what you have now, but this is what you're going to plan
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like to have in the future, gay or like based on that, Okay,
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Like we can started to think about, Hey, like the double gmas
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should have some additional capabilities that you are not mapping at the beginning, and
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that it could change completely, like the level of information like the customer required
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at the end. But it is depending on like models of the situation of
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a customer exactly, everyone's going to be different. Also, when when we
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manage a standard project, we it's not only about keeping the client in line
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and helping them to understand actually their needs, but also the bidders. Sometimes
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the bidders trying to be you know, to come with a solution that is
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very innovative, they come with the ideas that are not always the best,
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and it's like, okay, yeah, we appreciate that, but it's not
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actually what the client needs. So we need to try to keep on the
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on the right lane. Both parties right, and we are in the middle
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helping them to actually achieve the successful results. Yeah, you read my mind
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richer because I like you mentioned it. Like. The only point that I'd
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like to add is that if we have like an like an I, if
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we are in this phase like okay, le, they weider send their proposals
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personally. I prefer like to be open, okay, like to listen what
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other experts try let to suggests like to us. So it's fine for me
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if somebody say, hey, like this is like the original idea that MIVA
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has, Okay, this concept designed, this level of detail, notal demas
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okay for transportation, et cetera. But like we come like with this additional
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solution, Hey, I implement like a new type of racking like an sorter,
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like an AGVs. Whatever. Like the most important one here is like
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how do you what is like the reasons or le motivation that you have behind
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that like to justify this new solution Because Meva, we normally we evaluate like
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the technologies before like to recommend. So normally like we say, hey,
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this is like the right solution because we have like these reasons from behind.
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If like that if like to be there one light to post lie something definite
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is an important to say why you know, we always need like to be
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opened to think outside the box exactly. So Yeah, from the perspective of
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yes, it's a great idea to have external support in this tender for the
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client because make sure that what the client is asking for is actually going to
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meet the business need, that buyer's remorse is going to be there if it
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doesn't solve their problem. But if they have this, if they have this
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very narrow idea of what can solve their problem without listening to other options or
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someone playing devil's advocate saying no, I think this would actually be a better
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solution for you, and it will avoid that buyer's remorse. So that risk
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of getting boxed into an idea because you don't have all the information. So
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that's one risk. But then Richard, you brought up an excellent point that
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when you have to go out to these potential suppliers of whatever it is,
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whether it's a facility or whether it's material handling, equipment or software, um,
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that when those buyers come or those suppliers come back and try and offer
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a solution with within that framework of the tendering request. UM. If there's
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if there's any friction and a client is doing this on their own, then
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that's a potential partnership that they're you know, getting into. That's this marriage
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and it could start off rocky if there's an argument at the beginning. So
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by having that third party there to kind of manage that process and be that
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you know, to stick with the marriage. Analogy you know, this is
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their their counselor to help or a mediator to help with that process and make
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sure that everybody is speaking the same language, everybody is coming with you to
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the table with the best intentions and really making sure that whoever they walk away
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from even if that even if that supplier is not chosen for this particular tender,
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that they're on the table still for future potential engagements. Yeah, definitely,
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As as Assessa said, we try to keep an an open mind,
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always receive all proposals, try to keep a good relationship with every bidder,
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even if probably their solution was not was not the best for a particular project.
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But we try to keep a good relationship with them because we know that
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there will be more projects and we need to go to them and ask them
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for a proposal. And so yeah, it's it's really important to keep that
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relationship with them and with the client. Definitely. Normally what we do as
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me where he's like providing a fitback to the bidder and explain later reasons why
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they are not continued later the base kay to the final negotiations, to the
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final round, or why we're not selected. This is an important way to
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say hey, like for example, to put like an real case like in
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a pre experience, and one supplier was really keen on in one specific technology
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okay and said like this is a technology, like you should follow up this
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this and this isn't like the customer didn't want the technology and that was like
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one of the reasons, like the customers like, hey, I will not
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one like to have something that I don't like an I don't want or I
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don't need, and like this is like a feedback for like tabiter okay,
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like you push like to hard, like to this technology probably is because you
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have like your reasons okay, like probably is like this these warehouses like the
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this that you have available, et cetera. But like this is norqual like
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the customer want or need and that is like the reason. So it's like
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to explain yes, yes, yes it is here is very important like like
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to in this kind of business because like we are have a lot of relationship
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with many people. It's an important like how we approach like to them and
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how we explain like the reason behind it. So we needed like to to
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have time, like to explain to one gage why not. So when confronted
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with the term outsourcing, which is essentially what this is. You know,
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if a company it has internal resources that are capable of doing something, there's
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there's a hesitation when it comes to hiring an external firm to do it or
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overcoming that objection that we should be able to do this in house, we
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should be able to handle this ourselves. How often is that the case where
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you're coming into a tender and there's a little bit of hesitation or pushback that
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they should have been able to do this themselves, or they have internal resources,
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but someone at the at the decision making table has said, no,
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we really need an external third party to help us manage this process, or
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we just don't have the internal resources. They don't have the time or availability
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to manage this tendering process. They're busy doing their job and we need something
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else, so we need to bring someone else in. Is it more likely
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to have you know, a cost savings in the long run when it comes
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to utilizing a third party for this tendering process. Yeah, it is very
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common that situation, Like it's basically always and actually every time we every time
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we send an offer for a tender project, our main competitor is not another
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company is the client itself who is internally debating whether we should seek for external
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support or run this internally. And yes, it is true, it's very
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tempting to run it, to run that project internally, because in the short
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term, yeah, it might seem like a cheaper option. However, as
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we have said, this is the result of a tender project is like marriage,
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which will last at least three or five years, as as minimum is
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a contract that will run for several years. So and here is where looking
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for external support becomes a cost effective actually, and it is where you can
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actually see the savings because for example, and these are a couple of the
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reasons that we mentioned in the white paper. And is it, for example,
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the professional or the consultant, whatever you want to call that person through
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his experience on knowledge notes, for example, what are the right suppliers that
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should be part of the long list and not lose any time with candidates that
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from the start we're not a suitable option. Also because again experience and know
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the consultant knows what are the risks that the client might encounter in the long
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term that they not necessarily are aware of. So in the long term,
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yeah, it is more cost effective for the client to seek for external support
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among other reasons, right, like sustainability for example, etc. That is
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the ritory of completely right, like there is there is always this kind of
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challenge like because later costomers also is part of the competitors. Okay, every
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one, but like here, like the main one of the main reasons like
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to motivate the customers later go with MEVA and not continue like doing with the
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purchasing area is because these kind of technologies or situations is not something like a
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purchasing area face every day. This is something very specific okay, and not
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having ladies level of knowledge could complicate like the time late like the customer has.
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So for example, like right now, like some months ago, okay,
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we were almost finished that project, but like a customer asked to us
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to prepare like an a proposal, We prepared like the proposal. They decided
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to do it it internally, but a couple of months ago they decided to
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call again us because yeah, there is an a delay of three months.
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Okay, so we need like someone going to help us, like to finish
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the evaluation. Okay, yeah, and it's it's a lot of work.
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It's a lot of work because like they invite like they invite like more than
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to any potential bidders, like for you or this long lists, so like
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they go like for to any late to five, like to ten. It's
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quite difficult. It's quite challenging, okay, because like, okay, how
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are you going like to evaluate like these guys I don't know like this knowledge.
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It's like the first time that we're going to evaluate. How is it
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going to be like a template? How is like the process that they should
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fall blow up? Or what are like the right questions I should include in
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the R five for a que? So all of these information it gets complicated
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an at that moment is like when Meiba as an expert, we enter and
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help them like to take that resolution or the right decisions. Yeah. Also,
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also one of the things is that we some bidders have sellers that are
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very good actually, and it's easy to feel some kind of bias towards that
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company. It's like, oh, yeah, I like this person, I
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like talking to this person is very is very good at this, and probably
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their solution is not actually the best, but they have a very good seller.
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So we have encountered, yeah, a lot of times that situation.
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But we as consultants, we don't have any personal gain or personal interest there,
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so we can provide an objective valuation to the client and not fall under
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that charming of seller yeah of the sellers so yeah, or be dazzled by
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the technology yeah yeah as well yeah yeah. And also it's like challenging also
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like some performance they have, like there are they put like some numbers and
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could be realistic. We ask, hey, like these numbers are impossible like
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reach Okay, so like okay, it sounds good, but like in the
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reality probably is going to be late to difficult to reach. Probably that is
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like a maximum performance that you could have, but not like a realistic one
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that you're going to have every day. So like we we need like to
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check it in or try light to be objective or be objective like when we
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do late these kind of analysis in order to not create a these bias that
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Richer mentioned. Because again, like there are many sellers that are very good.
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Okay, they competence LA to you very quick, lay lay when you
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as selled to see lay your solution, it lay them lay the part we
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need led to evaluate. So what I hear is that there's there's two areas
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where utilizing this external partner for this tendering process is really a helpful mediator.
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So the first one is in the decision the internal decision team, so between
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purchasing, between operations, and between executive management. So making sure that all
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three of those those work streams, those those organizations you know, business units,
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understand the need and the result of whatever this purchase is going to be.
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So everyone's on the same page. Everyone agrees that moving forward is the
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right process. You don't have to worry about getting buy in or you know,
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going through this process and then going to the financing department or the purchasing
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department getting told no because it's too expensive. There really needs to be that
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that buy in and that internal communication with the company first and so we help
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mediate that process or help me eat that process, I don't do it.
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And then also between the suppliers to make sure that they're they're honest and they're
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well, we want to believe that they're all honest and they're just trying to
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you know, earn their living, but that they are truthful and upfront about
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the limitations of what it is that they're able to deliver, and that all
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the expectations are managed on both sides of the table. Am I hearing that
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right? Yes, yes, yes of course, and like as you mentioned,
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well, I'm telling very quick like one previous expedience for example, like
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we change like the technology with a customer like you want to like to have
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originally like an a pop up sorter, and like the end we say like,
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hey, shoe sort is the best, but we this has happened like
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after liscending, like the ARFI, they're fu so have to start all over.
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Not necessarily. Well, I communicate like to the leaders, hey,
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like we have decided like to change is increasingly the performance okay, like do
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you have it like this capacity like the suppliers with this new technology, and
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some of them were very honest and say, hey, like no, unfortunately
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we don't have it like that capabilities Okay, but we still have like a
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good relationship because at any moment or it's going like to appear like other opportunity,
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we can contact late to you because you have like that specific technology for
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that specific scenario. And this is like like a part like we try to
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do when we when we develop like a white paper with richer, we highlight
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it first our capacity identify, Hey, of all of these potential supplier or
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supplasion suppliers or beaters that you could have which could adapt according to your needs.
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Okay, is like not all of the technologies it's going to like to
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fit for you, but we needed to reduce it it like the universe and
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focus only in the vitas that could fulfill your requirement for your specific require a
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any last, any last thoughts before we share to our listeners where they can
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find this white paper, these ten tips we trobably wanted to start. Yeah,
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I mean, we understand that it might feel very tempting right to run
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tenders. Internally, it seems like an easy thing to do, it would
28:18
be a cheaper option. However, in the long term and actually in the
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meat term as well, looking for external support can actually provide advantages to your
28:32
business. It will help you grow in a healthier way and avoid certain mistakes
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that the consultants know about and and can help you avoid those yeah, those
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issues that you find Yeah, exactly, those pitfalls. So yeah, it's
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a good thing to think about that option, and I think it's always a
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positive option to consider when looking for a service or a product to tender,
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especially some of the sizes of these purchases. I mean we're talking, you
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know, hundreds of thousands, if not millions of dollars. Why would why
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would you risk that if you could ensure that this process is going to go
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smoothly and the result is going to be exactly what you need, yeah,
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exactly. Even even a cheap option is normally not cheap. So you want
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to make sure that you made the right decision and not after a couple of
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years say, you know this was not the right solution, but I liked
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that person that sella was very charming. You want to avoid that situation and
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make sure that you made the right choice from the start. So from a
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perspective, what this lay. The first thing to do any later thing is
29:53
asking late a question, what is our experience in with these products, with
29:59
distant this process did we do before? If you is it something that you
30:03
do frequently, you don't need let to have an external advice it at all.
30:07
But if this is something that you do very weird, you don't know,
30:11
okay what exactly you're going to purchase, it's much better if you go
30:15
like an external advisor and ask like to hin, hey, like you have
30:19
an experience on this one. Okay, we have like this timeline, is
30:22
it feasible? It's not feasible? How we can adapt at it? Okay?
30:26
Like for me, like that is like the first question, Like the
30:30
second one is think about okay, how long it's going to be my relationship
30:36
with this new partner that I'm planning to do. Is it going to be
30:38
only once? Okay? Is it only like to buy like like a bunch
30:42
of papers, or is something that I am going to need and a continuous
30:45
maintenance I need like to have like a good relationship with him? So is
30:51
it fulfill like this to think like it be something that is very unique or
30:55
new for us and it's going to be like an a long term relationship and
31:00
make it like a trade off is more convenience, like to go to an
31:03
external advice and ask like advice and say, hey, like you have an
31:08
experience in this, help me l with this, help me late to identify
31:11
what is like the right partner, the right solution and the right price that
31:17
fulfill my requirement. And after I having that, we can start like to
31:22
have like on a good tendering process, we can advice light to you like
31:26
to reduce it it like these universe of potential leaders help like with you,
31:30
like with our expertise, like to confirm that that solution is the right one
31:34
for you, okay, and then think about in the future, in the
31:38
long term, and say, hey, this supplier offer LA to you twenty
31:42
four seven hours of maintenance. This supplier offer LA to you like in a
31:47
continuous improvement, adapting to according to your own needs and requirements. So only
31:53
like to finish it, like to give to you on a little bit of
31:56
an experience that we have like with richer Less. Here we finished an attendering
32:01
process with with a a supplier like who wants like to start a new operation
32:06
hitting hitting the UK. They want at the beginning, like to continue the
32:10
relationship with your current partner because they have like an a long history in Germany.
32:15
I think so they wanted Yeah, so Lea's like to keep it it.
32:21
But like then, when we started to evaluate what they offered in Hitting
32:23
the UK probably was not the most convenience. And with him we found like
32:29
an an old potential Bida he liked like the offer, like the offer that
32:32
they did, like the technology. Okay, the relationship was very well like
32:37
during like the conversations and the solution fulfill what the customer wants. And it
32:43
was like the technology and the solution that they wanted. So I like the
32:45
end of the day, it was very smooth to move from from one position
32:51
to another one because we found okay, like the right partner that they needed
32:57
for here for this market, like this kind of is happening okay, like
33:01
when you have a delay the right information in gay like you understand it did
33:07
lay what is your business? You understand it did like lay the boos strains
33:09
that you have and helped la to you to take lay the bus decision or
33:14
right decision. Excellent. Well that brings us to the end of this episode.
33:19
Thank you so much, Caesar and Richard for sharing your insights on the
33:22
complexities of the tendering process and what resources are available to support companies who use
33:29
this uh, this tendering process for their purchasing decisions, because I know there
33:32
are a ton of them out there. I've worked, like I said,
33:36
I've even worked on URFPS with with me Bach and and helping to make sure
33:40
that everything goes smoothly for our clients. I'm sure our listeners can benefit from
33:45
reading this. This white paper this ten tipsum and that can be found.
33:50
I'll put a link to it in our episode description. You'll find it down
33:52
there. How can they reach you on LinkedIn? Is that the best way
33:57
to to find you guys? Yes, of course, like please like feel
34:00
freely to reach reach it or night if they have any questions related like do
34:05
this topic or all of the topiece of people. We are more than more
34:08
than happy like to receive your ust bnding which is just our names or yeah,
34:15
our me back emails which is our surname at meback dot com. All
34:21
right, I will make sure I have those links in the episode description as
34:24
well. If our listeners, if any of you out there have a suggestion
34:29
for a topic or would like to be a guest on our show, please
34:31
let me know, drop me a line. We'd love to hear from you.
34:35
You can reach me at podcast at meback dot com. As always,
34:37
thank you for listening to Speaking of supply chain. If you've enjoyed our show,
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34:54
Back Consulting is one of the largest and most globally recognized supply chain con halting,
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