Why tenders should be an essential part of the print buyer’s toolset

The word tender conjures up visions of procurement teams in large organisations dealing with multi-million spends.  They create huge tender documents and spend months in negotiations.  There are teams which deal with nothing but tenders.  Tenders aren’t for the average company

Nothing could be further from the truth.

Tenders are a vital tool for the print buyer

Print tenders are not just for large corporations

A tender is a more formal method of requesting bids for work from your suppliers.  It will typically focus on far more than price.  A tender will also focus on process and supplier quality.

Tenders are most useful when you have a large amount of work that you need suppliers to bid for.  Tenders are also useful when you have work that has a very complicated process.  The process of running a tender will force you to focus on what you need and how you need it done.  It also signals to suppliers that this is a formal process.  Therefore you are taking supplier choice very seriously.  And the suppliers need to work hard to win the tender.

A tender is more involved than other methods of putting work out to bid.  Therefore the duration of the tender agreement will be at least twelve months and sometimes several years.

What will you gain from running a tender?

You will gain three advantages from running a tender.

The first advantage is that you will establish a much more productive relationship with your suppliers.  The tender signals that you are entering into a more serious relationship with a supplier.  The tender also clearly sets out the basis of this relationship.

Running a tender also sets out a new basis for the way in which you control your work.  You will gain this control through clearer processes and a more formal way of managing your suppliers.  You are also able to demand new levels of service from your suppliers.

Demanding new levels of service is one way in which you will achieve more as a result of a tender.  The focus on the process in the tender ensures that time-wasting misunderstandings with suppliers are eliminated.  Tenders usually commit a certain amount of work to a supplier for a fixed period of time. This commitment means that suppliers’ prices can often reduce.

Alternatively, you could just put out some quotes

But using quotes won’t establish the same level of relationship with your supplier.  Using quotes  won’t control your work in the same way.   And you will struggle to achieve as much from using quotes as you would from a tender.

A tender will also help if you decide to move to a new supplier

A well written tender document means that a new supplier knows exactly what they are letting themselves in for!  The document means there can be no excuses, no assumptions and no extra costs creeping in.

And, in creating a tender document, you have already written the major part of your service level agreement.

But a tender sounds like a lot of work

A tender doesn’t need to involve the months of work that is taken by some larger companies.  However, the first time that you run a tender will involve more preparation.  Of course you can always use some external help for this preparation.  The extra preparation is balanced out as the implementation of a job will be much quicker.

Once you have prepared your first tender document, it can be used as a template for future tenders.  So the tender process definitely speeds up.

Here’s how a tender worked in practice

I recently helped a client run their first tender.  The client achieved some great results from it:

• The writing of the document focussed the client on how they wanted their suppliers to deal with them.    Before the client had let the supplier dictate what was happening.  Now the client focussed on what suited their business best
• The process also focussed the client on what products were needed.  The exercise allowed for a review of products which highlighted opportunities for product standardisation.  This review resulted in a 10% reduction in print costs before the work was even tendered
• The tender highlighted the fact that some of their suppliers had not been focussed on providing keen prices before
• The suppliers were also focussed on the fact that the relationship was moving from an informal relationship into a more formal partnership where more was demanded from them.  In return the suppliers gained more commitment from the client

Here’s what to do if you want to start running a tender

• Decide what work you want to tender.  Remember that you need a suitable volume of regular work, or a very involved process.  If you are spending less than £10,000 or $15,000 a year on print then the work probably isn’t worth tendering
• Write an outline of the specifications required for your work and exactly how you want your supplier to manage this
• Watch out for my next articles on how to write a great tender document and the eight step tender process

Don’t assume that tenders are only for big companies

If you do, you may be missing out on a very useful purchasing tool.

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P.S.   If you need help with tenders, Print & Procurement would be delighted to help.  See more about our consultancy services here.