You Can Always Get What You Want From RFPs

Case in Point: Campbell Soup and Mettler Toledo

Two of the leading contributors and co-authors of the RFP Guidelines for the CPG Industry and its accompanying RFP Process Template are Matt Swanson of Campbell Soup Company and John Uber of Mettler Toledo’s Product Inspection Division. Through unselfish sharing of their subject matter expertise and each company’s support, the CPG industry and OEMs have the tools to more effectively manage their CapEx projects and achieve vertical startups.

FSO Institute: Matt, in your opinion, what are the biggest challenges in your RFP process?

Swanson: RFPs are time consuming. Not including the time it takes to write the RFP, but the amount of work required for clarifications and updates can be very excessive. The endless calls, long email chains, and meetings, in my opinion, can be minimized through a better process. Also, the lack of expertise is often a big challenge. Engineers who lack experience or are new to the industry sometimes fail to provide critical data on RFPs. Without oversight and RFP reviews from experienced engineers, these RFPs may cause major issues with equipment purchases. The OEM may not pick up on the missing data or assume otherwise, causing inaccuracy or misleading proposals. The proposal may get rejected because of a poorly written RFP, and potentially the optimal solution was not chosen. Making the right decision between competing vendors is also difficult if you cannot get apples-to-apples proposals from OEMs. We very rarely award bids based just on cost or delivery. Many factors need to be considered when choosing solutions. It’s important to prepare a comprehensive RFP to allow the OEM to prepare a well-written proposal. To that point, new vendors often struggle to gain our business because they lack the experience with our very elaborate standards and specifications. We may miss out on an optimal solution from a new vendor based on solely on how the RFP was written and how the specifications were presented.

FSO Institute: Matt, you have been directly involved in the development of the Request for Proposal Guidelines for the CPG Industry as a best practice. Please share how you and others have integrated this into the Campbell’s capital procurement process.  

Swanson: Our procurement group utilized the OpX Leadership Network guidelines to create our new RFP template. So far, it has been a big improvement and well-received by our procurement team. Our engineers are fielding fewer questions for clarifications, and we are issuing purchase orders (PO) more quickly. The proposals also seem to be returned much sooner and require us to ask for revisions. In the past, almost each individual engineer created his or her own RFP template, and it was very inconsistent. This led to frustrations both from the OEMs and our stakeholders. We do require OEMs to build equipment to a long list of standards and requirements. Without the proper instructions and guidance on the RFP, it often causes a lot of issues. The new template has improved the understanding of the required standards and specifications.  

FSO Institute: Would you share some lessons learned during your journey of driving excellence in Campbell’s capital-delivery process?

Swanson: Our engineering leadership has strongly emphasized a strict adherence to a formalized project-delivery process as a high priority and imperative to project success. The equipment-procurement process is a major area within our project-delivery process that was significantly improved. I can also share some lessons I have learned over the years related to RFPs. Often, we press OEMs to provide equipment costs without issuing a formal RFP or the needed details that would be reflected in an RFP. These quick, over-the-top estimates are very much needed to help make decisions or form direction. But if they are underestimated, they could cause major issues in the capital-delivery process. The checklist in the OpX guidelines allows the user to easily populate critical information quickly and should be used prior to the project’s submittal. Often, hidden costs are uncovered after the equipment is purchased. These costs are generally the cause of the vendor receiving new information after the issuance of the PO. Again, the details that are outlined in the checklist should minimize these surprises. Building long-term relationships with OEMs is a key to success. Having the alignment and full understanding of the requirements improves the chances of success for both parties.  

FSO Institute: As head of compliance for Mettler Toledo Product Inspection, please share how you drive consistent utilization within your company of the OpX industry best practices, particularly the use of the RFP Guidelines for the CPG Industry.

Uber: First, here’s a bit of background on compliance. From the OEM perspective, compliance generally means meeting the statutory and normative requirements for your machine product in the market where the machinery is applied. These different requirements documents (statutes, directives, norms, regulations, standards) vary by jurisdiction, and it is no surprise that they often do not agree in structure or content. In addition to making sure that the machinery is compliant, most CPGs also have compliance requirements for their products, and many machine products are viewed as tools to assist in that compliance effort.

As a machine builder, we work to break down these complex requirements documents into simpler, individual requirements, and then work to meet those different requirements.

All of this is good, but not much value unless your customer wants your machine, and that is where the OpX RFP guidelines come in. These guidelines provide the industry’s view of what is most critical to our customers and a consistent way to organize the critical information for our customers. We can’t expect the EU, U.S., Brazil, China, etc., to agree on their different requirements, but as an industry, we can agree on the method to collect and present requirements and capabilities.

When the supplier and user both follow the RFP guidelines structure, the time required to produce a set of bid requirements and a proposed solution decrease. Almost all machine builders have automated the information gathering for their products, and consideration of the content in the guidelines should be an absolute requirement when creating those automation tools.

I personally review several user-requirements documents each month. What is observed is a lack of consistency in structure, redundancy, and conflict in requirements. Each organization has its own experts in different subject areas, and each expert has an opinion on what the machine requirements are. This is no surprise. Unless you require organization, you should expect disorganization. The OpX product makes it easier for both OEMs and CPG organizations to strike a new center line and establish common framework and language. This can prevent a good deal of issues that are “lost in translation.” The structure also aligns with quality practices taught throughout our industry. It can be viewed as a 5S approach for this document area. 

OpX documents help a great deal to establish consistency in structure and content. It is already seen that some CPG companies are steering their document organization to align with the RFP structure, and language of the hygienic requirements paper is beginning to appear as well.     

FSO Institute: During the coming months and years, how do you see using the RFP guidelines, as well as other OpX tools, in bringing added value to your full range of clients—regardless of size or industry sector?

Uber: The OpX tools are “benchmarking” tools, and each have a specific purpose. For example, you use certain tools to evaluate legal and normative requirements for your product. As you work through these documents, you also keep an eye on how your customers are reflecting the requirements in their RFP documents. This tells you what parts of these requirements documents are most important to your customers. The OpX tools give you a 10,000-ft view of the situation. For each RFP, you still need to understand what that specific customer needs, but you can address many of the concerns from the higher elevation.

We will continue to use the OpX work products as evaluation tools for our methods and products, and as learning tools to improve our products. The OpX work products are not only an effective assessment of the industry’s position, but they also teach us the best way to communicate with our customers. OpX papers are written from the CPG perspective. It is important to speak the local language.

For the area of product compliance, change is not only expected, it is built in. Reviewing the OpX tools created over the past few years, you find few that did not have a compliance requirement behind them. Most are safety related, either for personnel safety (worker safety), or the public (hygienic, allergens, sustainability, remote access). Even the [overall equipment effectiveness] work product—which directs to performance optimization—requires a standardization of the quantities applied to provide comparable information. Most third-party standards have a revision cycle of five years. This means that every year you should expect updates of 20% of the standards and norms that you apply in your practice. We will look to OpX to grow this set of guidance documents and to maintain a state-of-the-art approach with their publications. This is to ensure that the guidance provided in year one is still valid in year five of a document’s life. 

About the Case in Point Series

In the past few years, PMMI’s OpX Leadership Network has produced more than 20 manufacturing process-improvement documents for CPGs and OEMs. More recently, the FSO Institute has facilitated the adoption and implementation of these documents, especially for food and beverage manufacturers. In this 2020 Case in Point series with the FSO Institute, ProFood World presents actual cases to show just how CPGs are using the OpX documents to improve their overall manufacturing health and collaboration with OEMs and other suppliers. Learn more at www.opxleadershipnetwork.org and www.fsoinstitute.com.