MCI 09 Quote Procedure - Microwave Components, Inc. 09 Quote Procedure.pdf · 4.3.3 The Principal...

09. MCI Quote Procedure

Revision: 14 – Date: October 19, 2016 of 16 09 MCI 09 Quote Procedure.doc

1.0 PURPOSE

1.1 To define the process and procedure for responding to customer RFQ’s for:

i MCI Distribution Customers (Customer Service Engineers)

ii MCI Rep Principle Customers (Field Sales Engineers)

iii MCI Distribution DESC quotes (Defense Electronic Supply Center)

2.0 RESPONSIBILITY

2.1 The Inside and Field Sales Managers are responsible for managing the quote process;

2.2 Admin Support provides data entry and communication of quotes.

3.0 CRITIERIA

3.1 Ensure customers obtain the right solution (part) for their application needs

3.2 Provide prompt response to RFQ’s

3.3 Quote competitive prices and accurate delivery dates for products

3.4 Ensure accurate identification and recording of parts & part #’s

3.5 Make a profit for MCI by applying reasonable profit margins and consideration to:

i building long-term relationships with customers

ii broadening the product range purchased by each customer

4.0 PROCESS (see attached flowchart)

4.1 General

4.1.1 MCI sell product from two distinct sources as follows:

i Distributor for various manufacturers – MCI purchases product at discounted bulk prices so as to have stock-on-hand in the MCI inventory. This is sold at a marked-up price. MCI’s selling advantage is:

• Having available stock on hand

• No minimum quantity for re-sale

• Can buy at discounted bulk price and control selling price

• Often have direct access to information on the manufacturer’s inventory levels and delivery lead-times if more stock is required

• Have good relationship with manufacturers’ technical experts for product selection advice.



ii Manufacturer’s Representative – MCI does not hold stock for Rep products. MCI directs RFQ’s for customers directly to the manufacturers’ sales office. MCI then follow up with the manufacturer to obtain a sales commission if the sale was successful. MCI’s selling advantage is:

• Allows MCI to provide a broader product offering to customers

• Do not need to buy stock

• MCI earns commission on sales though MCI has less control over prices quoted

4.1.2 MCI uses four distinct but interactive sales processes:

i Field Sales Engineers (FSE) assigned to geographic regions (principally eastern US). They earn commission on all sales within their region, so they are not in competition with other MCI sales processes. Their duties are to:

• build long-term relationships with known customers including trying to broaden the product sales to those customers;

• find new customers

• provide face-to-face technical support

• provide feedback from the customer including information on competitors (e.g. their price levels)

ii Customer Service Engineer (MCI Inside). Their duties are:

• To manage all sales inquiries sent to the office whether direct RFQ from a customer or indirect through a FSE. They cover both international and US sales.

• Process Quotes and Orders

• Provide technical support to customers

iii DESC (Defense Electronic Supply Center). These are Defense procurement contracts that are published on the internet. Due to the volume of contracts, MCI use a search tool to search for contracts dealing with their manufacturers or products. A Customer Service Engineer is assigned to this task.

iv Independent Sales Representatives. MCI selectively contracts with independent sales Representatives on a commission only basis to cover areas not covered by MCI FSE’s. They act similar to MCI FSE’s except that they are not employees of MCI

4.2 Quotes for Distributor Parts (AS9120: 7.2.1 & 7.2.2)

4.2.1 CSE’s do all quotes for Distribution Products

4.2.2 FSE’s communicate (phone, fax or email) their sales leads to their designated CSE to follow-up. MCI need to identify the customer’s needs for:

i Type of part (preferably a part #)



ii Delivery requirements for:

• Quantity

• Delivery dates (e.g. staged delivery)

iii Target price

iv Any special requirements, e.g. packaging, labeling.

4.2.3 Although CSE’s may negotiate verbally with a customer, all RFQ’s must be answered with either 1.) written quotation, 2.) e-mail quotation, or 3.) Verbal Quotation (Verbal Quote Log). It is important that all quotes are recorded into the MCI system, unless they result in an immediate agreed sale, so as to capture accurate quote / sales history.

4.2.4 When a customer makes an inquiry, CSE uses “Customer look-up” (F12) to identify customer information. Note that some customers have several locations/ addresses, so select the correct address. Record the contact person and their contact details. Note current credit terms.

i If this is a new company, record contact details (For new customers, Admin Support will record the customer in the Admin “New Customer Account Number Log” and allocate the next 6-digit customer #). New customers may only use COD or credit card purchases until a credit limit is approved by Accounting (Can take 14 days or more, for reference checks).

ii Double check that a new customer is not actually an existing customer. Check for variations in the company name. ie: “John Smith Company” may be in our system under “JSC” or “JS Company”.

4.2.5 Determine customer’s part requirements through:

i Specific MCI vendor part number:

• enter vendor code and part #

• review recent sales history for that part (customer, unit price, availability, MCI cost, “Quantity on hand”)

• if “on hand” is “zero” or less than required, but we have “on order with factory”, press F8 to check delivery date; add 2 weeks to this date when quoting to customer. Also check any “Back ordered” quantity and ensure this is taken into consideration when assessing stock availability. Certain amount of risk is evaluated pertaining to quoting lead times in certain instances to maintain customer satisfaction.

• If selected part number price / cost is not in MCI system or listed on current vendor Price List, obtain “P&D” from manufacturer (Price & Delivery information includes prices for quantity ranges, availability / delivery date, and minimum order requirements). If minimum quantity purchase requirement is larger than customer requirement then refer to “Signature Authority” guidelines.



• If Inventory and On-Order does not satisfy customer needs, check for possible substitute part #. Verify if customer can accept substitute parts, if so (press F5) for potential alternate.

• Based on previous sales history and quantity required, quote in accordance with MCI “Signature Authority” guidelines

ii. If the customer requested part is obsolete, then the customer shall be notified. We may sell any remaining stock but we will work with the customer to find a suitable replacement or offer to provide whichever product the MFG as designated as the applicable part.

iii If unable to match requirement to existing product or Part Number

• Get customer to send drawings and or any other documents that describe the characteristics of the product in question.

• The CSE can also obtain a drawing from the Mfg to help identify the requirement.

• Review requirement with MCI internal staff or with manufacturer’s technical experts to identify part

4.2.6 Go to the Quotation Menu on the MCI Screen and research part number to see if Quote history exists. If so how many times quoted? What pricing was quoted? Determine if these were won or lost due to price or delivery situations.

4.2.7 Consult Sales Management if special pricing is needed, due to this history

4.2.8 When quote details are established, CSE records quote information on Written Quote Form, e-mail quote, or Verbal Quote Log and gives to Admin Support to enter into the MCI system. If the quote is an International Sales Quote, then the International Sales Order Policy document is attached to the quote.

4.2.9 Admin Support enters the quote information and prints quote if applicable (Written Quote). As per paragraph 4.6.4.6, Admin Support shall enter any notes on the quote referring to MCI produced cable assemblies not being AS9120 certified.

4.2.10 CSE reviews and signs written quote if correct and returns quote to Admin Support for transmission to customer and relevant FSE. The signed quote serves as the record of review and acceptance.

4.2.11 Quote Follow-up & Feed-back:

i At the end of each business day Admin Support transmits all Quotes to FSE’s via e-mail in pdf format for their territory.

ii The FSE & cognizant CSE are to corroborate and agree on who is responsible for follow-up with customer and inputting status and comments



into MCI system. This activity should take place real-time (i.e. : next day) based on the nature of such buy decisions.

iii At the end of each week, the Office Manager prepares and e-mails an electronic file (excel format) of all quotes for each FSE’s region. The FSE’s review their list for information purposes and report back on the status of “Pending Quotes” to VP S&M.

4.3 Rep Quotes

4.3.1 Rep Quotes are mostly dealt with by FSE and VP S&M and rarely by CSE

4.3.2 If customer wants a Rep part then FSE contacts Rep’s sales office (“Principal”)

4.3.3 The Principal provides the quote direct to the customer and should copy to:

i MCI - Admin Support enters Quote details into MCI system and Faxes copy to FSE

ii FSE – follows up with Rep Principal and Customer to determine status and tracks until closure and or determines if further action is required

iii FSE is responsible for inputting status directly into the MCI System via use of MCI Remote System access

4.3.4 If sale is achieved, Principal should submit a copy of the Confirming Order and or Invoice to MCI. (Occasionally the Principal fails to report the sale to MCI so it is important that the FSE follows ups on all Rep Quotes with the customer and or Principle to determine status of purchase). Office Manager enters all Rep confirming orders and sales / invoices into a computer Rep System (RPMS)

4.3.5 The Office Manager allows 90-days from invoice date for receipt of commission payment from Principle. If no commission received, then OM follows up with the Principal for payment status.

4.4 Independent Sales Representatives

4.4.1 Independent Sales Representatives operate in the same way as MCI FSE including receiving the same weekly quote follow-up report

4.5 DESC Quotes

4.5.1 CSE runs daily search of DESC bid requests over last 24 hours. Use special search tool that identifies all bid requests that specifically name one of MCI’s suppliers; print off all bid requests

4.5.2 When possible, Top Management carries out a preview of the bid requests. The preview may reject some bids and provide others with bid price suggestions.

4.5.3 CSE works up bids with quote prices from the MCI system (e.g. get P & D {price & delivery} for parts not in stock; calculates unit price and % mark-up, etc)



4.5.4 CSE carries out a final review of that day’s DESC bids with Top Management

4.5.5 CSE submits bids on-line and prints out the bid details including any time and date verification of the bid submission

4.5.6 CSE gives the DESC bid print-outs to Admin Support to enter on MCI System.

4.6 Quote Methods:

4.6.1 To define the various methods MCI uses in responding to customer RFQ’s and the process for capturing information in the MCI Business System.

4.6.1.1 It is the responsibility of any MCI employee who is sanctioned to provide quotes to customers (ie: CSE, ISM, VP S&M. President) to execute quotations in accordance with the MCI Quote Procedure using one of the methods defined below.

4.6.2 Written Quotations: (MCI Quote Form Rev 11/1/4)

4.6.2.1 This is the primary method of responding to customer RFQ’s. The process and procedure for this method is clearly defined in this procedure 4.6.3 E-Mail Quotations: 4.6.3.1 MCI receives many straightforward RFQ’s via e-mail where the customer already has a P/N or detail description of what they want a quote on. It is sometimes more efficient to reply to such requests via e-mail and in some cases the customer prefers such. If this method is used the person providing the quote is charged with printing a copy of the e-mail and adding or clearly identifying the following information (example attached): Customer Name Customer I.D. number Contact Information- Buyer name, phone & fax numbers P/N including Supplier Code prefix Quantity Unit Price Delivery Quoted by: Signature or initials Outside Salesman Code 4.6.3.2 After completion, these e-mail quotes are to be entered into the MCI system by Admin Support via the same process as Written Quotes except these quote are not printed, faxed etc. They are filed in the same manner and location as Written Quotes. 4.6.4 Verbal Quotations:



4.6.4.1 MCI receives many RFQ’s by phone. In most cases these requests are again straightforward and the customer is requesting a specific P/N or has a detail description of what they want a quote on. Often times such requests are easily responded to on the same phone call by way of a quick look-up on the MCI Business System. Statistics show that approx. 40% of the items booked and Approximately 20% of the dollars booked in any given month are a result of a verbal / phone quotes. This is a common and acceptable business practice, however verbal quotes were not previously captured in our Business System and therefore provide no visibility to the FSE or populate our data base that we depend on in making future quote / buy decisions. 4.6.4.2 In order to capture this information we are incorporating the use of a “Verbal Quote Log”. This log is intended to be an easy to use form that captures basic information on verbal quotes so that this information can be captured in our business system. The person quoting is responsible for filling in the basic information (hand written) defined by the log (copy attached) and at the end of the business day submitting their log to Admin Support for entry into MCI Business System. All such quotes will be entered using the letters “VQL” (Verbal Quote Log) in the “Reference Block” where a customer’s RFQ is normally entered. This will allow easy identification on our system. These logs are then to be filed in a generic file by date. NOTE: All VQL quotes will be entered with TBD as payment term. 4.6.4.3 Guidelines: This Verbal Quote Log is intended to capture and make visible quotations that have previously been communicated verbally and not intended to replace the use of the “Written Quote”. 4.6.4.4 Any Verbal Quote to other than a known Distributor, Exporter, or Re-Seller that exceeds $500.00 in value should be followed up with a written quotation so that MCI and the Customer have a record of the quote. This will ensure accuracy at the order stage and preempt any disputes with customers on quote details. 4.6.4.5 Examples of these three Quote Methods are attached as a reference. 4.6.4.6 If the CSE is quoting a cable assembly that is manufactured by MCI the CSE

shall inform the customer that the cable assembly is NOT certified under the AS9120 standard. If the part does NOT state “AS9120 CERT” in the upper right corner of the 3 screen, then the CSE does not have to write it on the quote. If an MCI cable assembly says “AS9120 CERT” on the 3 screen, then the item has to be updated using the Item Master and the CSE needs to make a note on the written quote: “MCI Cable Assemblies are NOT covered under AS9120.”



Quality Records

Record Name Responsible

Person

Location Index method Minimum

Retention

Written Quotations Various MCI Database Quote # 2-yrs

“Customer Account

Number Log” customer

contact details

Admin support Admin Office By customer On-going

Credit references Accounts Manager Accounts Office By customer 2-yrs

Customer drawings CSE Main office By customer 2-yrs

Quote form CSE Quote files By customer 2-yrs

Rep Sales Office Manager Rep System

(RPMS)

various On-going

e-mail quote CSE MCI Data Base Quote # 2-yrs

Verbal Quote Log CSE MCI Data Base Quote # 2-yrs



5.0 Change History

Revision

Level

Date Description of Change

1 19 Oct 04 Initial



2 12 Jan 05 Pgs. 2,3,4,5,7

3 26 Apr 05 Add Signiture Authority Pg. 9

4 15 Jul 05 Redefined & Rewrote entire document – Added 4.6 (Quote Methods)

5 18 Jul 05 Redrew Flowchart

6 20 Jul 05 Added Examples of 3 types of quote methods

7 10 Oct 07 Para 4.2.4 i: Replaced “Yellow Book” with “New Customer Account Number

Log”

8 31 Jul 08 Para 2.4.8: added attaching the International Sales Order Policy to the quote

9 29 Aug 08 Review and Add reference to AS9120 standard

10 10 Sept 08 Added 4.6.4.6 referring to MCI cable assy not AS9120

11 22 Jan 09 Revised Para 4.6.4.6 to ‘MCI cable assy not covered under AS9120’

12 20 Sept 11 Modified paragraph 4.2.5 for the AS9120 Rev A. upgrade

13 20 Oct 14 Added reference to the signed quote acting as a record of review. 4.2.10

14 19 Oct 16 Added to para 4.2.5 about handling obsolete parts



MCI Sales & Marketing Signature Authority

Revised April 21 2008

Price Book Price Book Special Special Budgetary

With Stock No-Stock Back-Back Back-Back Quote

(Min. Buy Qty.) (Min. Buy Qty.)

Inside Sales (CSE's)

Quote $ Authority $5,000 $5,000 $5,000 $5,000 $10,000

Discount Authority One

Column One Column N/A N/A One

Column

Min.GM % Authority 20% 15% **All Inclusive 20%

15% **All Inclusive 20%

Inside Sales Manager

Quote $ Authority $20,000 $20,000 $10,000 $10,000 $20,000

Discount Authority Two

Columns Two Columns N/A N/A One

Column



V.P. Sales & Marketing

Quote $ Authority $100,000 $100,000 $100,000 $100,000 $250,000

Discount Authority N/A N/A N/A N/A N/A



Order Schedules: Customer orders / line items are not to be scheduled beyond 6 months from original order date without Management approval. Sales Order Add-On's: No add-on's to existing orders allowed after 30 days of original order date without Management approval.

Definitions: Price Book With Stock - Standard Price Book item with full quantity available from MCI Inventory **Price Book N0-Stock - Standard Price Book item where MCI inventory is less than quantity being ordered requiring purchase of additional Inventory

Special Back-Back - Quoted item from supplier where MCI will receive and ship out entire quantity ordered



Special Back-Back (Min. Buy Qty.) - Quoted item from supplier where MCI must buy more inventory than being ordered from our customer Budgetary Quote - Quote where customer is looking for quick rough order of magnitude price vs. formal fixed price quote **All Inclusive - Where the total cost including excess inventory compared to the order at hand still yields X% margin

REV: 4/21/08

MCI 09 Quote Procedure - Microwave Components, Inc. 09 Quote Procedure.pdf · 4.3.3 The Principal...

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