RFQ

This tutorial which is part of our SAP MM course talks about SAP RFQ. You will learn about business
processes related to requesting and maintaining quotations in SAP MM, how to create new requests for
quotations, enter the information about the quotes received from vendors, compare the quotations and
choose the best one.

Finding the best vendor is one of the key success factors in procurement process. If the vendor is
fixed, then a purchasing department can directly create a purchase order and any other purchasing
documents for this vendor. However, if the vendor is unknown, then the purchasing department needs
to ask for bids from several possible vendors and choose the best one.

SAP ERP helps companies to manage procurement processes and facilitates the process of managing
bids (or quotations) from various vendors. The first step is to create a RFQ in SAP ERP. In RFQ, you
ask the vendor (or supplier) to provide pricing details and delivery terms for a particular material
within a given timeframe. So, when you create a RFQ you enter details about materials which you
want to procure with delivery dates and quantity. Against this RFQ, vendors will send their quotations
with details about pricing conditions and delivery times.

SAP RFQ (RFQ) can be raised not just for physical materials but also for service items.

There are the key points for creation of RFQ:

Item code
Delivery time
Pricing condition
Source of supply

How to Create SAP RFQ?

In SAP ERP, we can create a RFQ through the transaction ME41. You can find it under the following
path in SAP Easy Access menu:

Logistics > Materials Management > Purchasing > RFQ/Quotation > RFQ > Create

Create SAP RFQ Transaction in SAP Menu

In this transaction, we have options to create the RFQ with a reference to a purchase requisition or
with a reference to an outline agreement. If there is no preceding document, then a RFQ can also be
created. It is not mandatory to have a reference document. However, if you want to keep track of the
documents flow from generation of requirement to selection of a supplier, then you should use the
reference functionality.

As shown on the picture below, there are some basic details that are required to enter on the initial
screen of create SAP RFQ transaction.
1. Quotation Deadline
2. Purchasing Organization
3. Purchasing group
4. Delivery date.
5. Plant

Here Quotation Deadline means the date by which a vendor has to submit a quotation.

Create SAP RFQ Initial Screen

Next, click on Enter button on your keyboard. The SAP system will show you the next screen of the
transaction where it is necessary to enter codes of materials for which you would like to receive
quotes.

Create SAP RFQ List of RFQ Items

Enter the item code(s), RFQ quantity and then click on Enter button on the keyboard. SAP RFQ can be
created for one item or multiple items. Next, lets edit the header of the document. To do it, click

on button in the toolbar.

In the header you need to enter the Collective Number (Coll. No.). This Coll. No. should be a unique
number. While doing a comparison of several quotations you will be able to easily find them using this
number. This way, you will not need to enter individual numbers of each quotation.

Create SAP RFQ Header Enter Coll. No.

Next, lets enter the vendor to whom we will send this RFQ. To do it click on button in the toolbar.
Enter the vendor code and click on Enter button. The SAP system will automatically populate all details
of the vendor by its number. Now, we can save SAP RFQ by pressing Save button in the toolbar.

Create SAP RFQ Enter Vendor SAP RFQ was

Created
If you want to create more requests for quotation with the same item code(s) and delivery dates but
for different vendors, repeat this procedure but specify different vendor codes.

SAP Quotation Maintenance

Now, after you issued requests for quotations to vendors, they will share their pricing structure and
delivery details in reply. We need to enter the information about quotations of the vendors in the
system. This is done in the transaction ME47. You can find it under the following path in SAP Easy
Access menu:

Logistics > Materials Management > Purchasing > RFQ/Quotation > Quotation > Maintain

On the initial screen of this transaction, you will need to enter the number of the RFQ that corresponds
to the received quotation. Next, click Enter on the keyboard.

Maintain Quotation Initial Screen

In the next screen, add or modify details that are appearing in white (including prices and delivery
dates). Other fields are not editable and can be changed only in the original RFQ.

Maintain Quotation Items Overview

If the price includes several components, you can enter all the details about pricing conditions using
the button as shown on the screenshot above.
Maintain Quotation Pricing Conditions

The SAP system will show a screen with detailed pricing information. Here you should enter the
condition type P000 which is the condition for base price. We can maintain the price which is offered by
the vendor against this pricing condition.

Maintain Quotation Pricing Conditions (2)

If there are additional pricing conditions shared by the vendor (e.g., freight), they can also be entered
here. In our example, we have maintained the freight condition FRB1. We can maintain any pricing
conditions that come from the supplier in this pricing condition screen.
Maintain Quotation Details Icon

Now, lets enter tax details for this quotation. Go back to the screen with overview of items and click
on the item details icon as shown on picture above. A new SAP screen will be displayed. Here, we can
maintain the applicable tax code as shared by the vendor.

Maintain Quotation Enter Tax Code

Next, return to the screen with items overview and click Save button on the toolbar. The quotation will
be created.

Quotation has been Successfully Created

Now, we should maintain all other quotations from different vendors in the same manner.

Comparison of Quotations
After maintaining all the quotations, it is necessary to compare them and choose the best one. SAP
ERP supports procurement department in comparing quotations and has a special transaction for this
purpose.

Go to the transaction ME49 or navigate to the following path in SAP Easy Access menu:

Logistics > Materials Management > Purchasing > RFQ/Quotation > Quotation > Price Comparison

On the initial screen of ME49 transaction, we should enter the Purchase Organization and either
multiple quotation numbers or the collective RFQ number that we have maintained in our requests for
quotations.

Price Comparison for Quotations

In Comparison tab, you can select either Mean Value Quotation or Minimum Value Quotation options to
run the report. Next, click on Execute button in the toolbar.

Price
Comparison List

The SAP system will then show a screen with comparison between several quotations (two in our
example). Here, you can compare the net prices and select or reject quotation based on price.
To reject a quotation first select the quotation then click on Change Quotation icon in the toolbar as
shown on the screenshot below.

Change Quotation Icon

Set Rejection Indicator

In the next screen, you can select the rejection indicator (Rej. Ind.) for rejecting the quotation.

Create a Purchase Order based on Quotation

After rejecting quotations that we dont like, we can proceed with ordering materials from the vendor
who offered us the best quotation. To do it, lets go to the transaction ME21N and create a new
purchase order with a reference to the quotation.

You can choose the quotation from the list of purchasing documents displayed in the left sidebar. Note,
that if you try to select the rejected quotation, the system will show an error message.

Create a Purchase Order based on a Quotation