Golden Falcon Aviation

MODULE 3 – PURCHASE & SALE

SALES & PURCHASE
SALES & PURCHASE Sample RFQ
Sales and purchase includes the complex process of
identifying the right parts, quoting to the customer with
details and converting the same to purchase order.
Purchase orders will be invoiced to complete the
process. First and basic process of the sales is RFQ
management, we will discuss RFQ management in
detail.

RFQ MANAGEMENT
RFQ (Request For Quote) refers to the requirement
request we receive from the Airline, MRO and other
organizations. RFQ can be received through any
channels like email, call, whatsapp, inventory websites
etc. RFQ will carry details like, Part Number, Description,
Quantity of item required and remarks or special
condition is any.
PART SEARCH
On receipt of RFQ, below steps to be taken
Step 1: Acknowledge
Step 2: Add to tracker/ System
Step 3: Part Search
PART SEARCH
IMPORTANT NOTES:
 Do extensive search on the parts to get the better quotes.
 Repair stations may have the possibility of parts in stock, In case of non-availability in the market. Check for repair
capability and raise rfq with repair stations.
 Search for the non listed vendors in Google. Try to get the contact from LinkedIn Search. Try to get the quote directly
from Manufacturer or their distributors for better pricing.
 Vendor Relationship – Send RFQ to vendor personally and build relationships to get competitive pricing.
 We have the vendor database few Customers like AZUR , OTI & SRILANKAN AIRWAYS, In such cases please filter their
vendors and try for better quote from the vendors which are not in their list.

TYPES OF RFQ
• Stock - RFQ Raised for replenishing stock items

• Normal /Routine - RFQ with normal priority ( TAT – 24 hours)

• Critical - TAT 4 Hour

• AOG - Need to answer in NO TIME – TAT Max 1 hour

MARK UP
MARK UP
• Initially markup needed to the obtained from Senior Consultant, KAM, TL, Reporting Manager or Business manager
• Forward maximum quotes with stock availability and certification details
• Include historical quote for same PN with details of PO received or not

Mark Up Tips
 Add mark up according to the customer Type
o Direct
o Agent/Representative
o Prepay Customer
o Credit Customer
 Maximum Margin with high chance of conversion
 Average /Market pricing of the unit
 For Rotables
 Tag Date, Shop Report, Original cert, Warranty
 For Expendables &Consumables
 MOQ, S/L Expiry, Package Qty
 Stock location
 Condition of Unit
 Additional Details like Pin length, DOM, Expiry etc
MARK UP
Scenario:
SALES & PURCHASE
 Quote Details

i. Quote should contain below details

ii. CD, unit price, qty, total
iii. Cert details like Type, source and Tag Date
iv. Stock Location
v. Delivery Terms
vi. Warranty Details
vii. Terms (Credit or Prepay)
viii. Other necessary details like, Life Remaining, Shelf life expiry, Next OH due etc as per the product
ix. Mention Charges like Hazmat, handling, Delivery or any charges if applicable.
x. Mention details of Alternate number & Interchangeability details as per quote
xi. Quotation should have the same order of the RFQ list provided by the customer
xii. Partial quotes also needed to be furnished in the email body.
SALES & PURCHASE

Scenario1: Incomplete Quotation

Customer Airline personnel will ignore incomplete quotations, usually they won’t come back asking for missing details,
as they will be having enough and more vendors quoting with complete details. It's our responsibility to ensure we are
forwarding the quotes with all necessary details, else it will be free exercise for us.

Scenario2: Quoting Alternates Parts

While quoting alternate parts, sales consultants need to furnish the details as stated below. (in both quote and email
body)
“Quoted PN:XXXXXX is alternate to requested PN:YYYYYY as per………. ) 
Also the interchangeability docs substantiating the alternate need to be attached along with the quote. Else there is a
high chance for the quote to get rejected without any feedback.
SALES & PURCHASE
Scenario3: RFQ and Quote Line# Matching
Incase of multiple line item RFQs, quotes should be forwarded in the same order of RFQ. Else there is a higher chance
for the quote not to get considered.

Case Study:
We received a RFQ as follows

Continued……
SALES & PURCHASE
We have quotes for line item 1,2 4 and 5. Item#3 We didn't receive quotes. We have two options to quote as mentioned
below.

OPTION 1

OPTION 2

Continued……
SALES & PURCHASE
In the above two quote options, Option1 is not advisable as the customer will have problems in collating the prices.
Normally customers will be collating updated in below format, if we are not quoting in the same order customer will find
it difficult to collate updates by checking each PN individually, in that case there is chance that customer personal may
ignore our quote, especially on quote with more than 20 line items..
SALES & PURCHASE
Customer Details in Quotation
Below details need to be furnished in the quotation with out fail.
• Name & Details of Customer
• Customer Contact name - Very Important to build up the rapport with customer contact

Vendor Quote Update

• Minimum 3 vendor quotes to be updated against every line item.

 Line minimum, MOV, MOQ

• Quotation should satisfy below conditions
• Line Minimum – Line total should be minimum $10
• MOQ – Minimum Order quantity should match with vendor MOQ
• MOV – GFA minimum order value is $100, Quote should comply with our M)V as well as vendor  MOV

Continued……
SALES & PURCHASE
Scenario:
Let's take an example to illustrate Line Minimum, MOQ and MOV. We have received an RFQ as below.

Price of item#1 is $2.20 and item#2 is $3.32, as per the current pricing our quote will be as follows.

Here line total is $4.40 and $6.64 respectively, which does not satisfy our Line Minimum of $10. Now we have 2
options to satisfy the line minimum condition, either to increase the price of the unit, or increase the quantity. That
increased quantity is called MOQ or minimum order quantity.
Option1: With increase in price

Option2: With MOQ

Continued……
SALES & PURCHASE
Customers will prefer option2 as the unit price is cheaper and they will get extra quantity, which can be used for later
requirements. Here we have an another issue that, Total of the quotation is coming only to $24.28. Where 
Our MOV is $100. If we are forwarding a quote with a value of $24.28, the PO will be received with the same value
which will not satisfy our MOV. Then we have to further increase the value OR the quantity to make sure the quotation
total is $100. Best option will be offering the quote with a higher MOQ as below.

.
SALES & PURCHASE
ILS , PB, LOCATORY USAGE
• PB and locatory we have limited number of users, sign out after use for your colleagues
• PB and Locatory allows unlimited transactions FOC.
• In ILS Searching a single PN and or max limit of 24 will be considered as a transaction.
• Compile your RFQ and search in ILS with maximum numbers of PN subject to a limit of 24
• Uncheck FAX option while raising RFQ from ILS (Fax will be charged $0.4/Per Fax)
• Export excel result for future reference and usage
• Restrict Parts Statics usage for dire emergency

RFQ TRACKING
RFQ is our opportunity to earn business, any misses or lag in quoting will have an adverse impact on our business and
organization credibility. Below mentioned points to be maintained to make sure all RFQ are properly tracked and quoted
• Maintain records of RFQ received and worked
• Update the tracker on time
• Quote as per customer priority (AOG, Critical, Routine etc)
• Bring down the TAT
• Improve the conversion rate (RFQ to Quotation)
SALES & PURCHASE
AOG RFQ
 AOG RFQ should be given utmost priority, and quoted with no time. Follow below points religiously on processing
AOG RFQs.
 Get immediate updates and quotes, don’t wait for vendor response & Call and get quote
 Tail Number & MSN will be needed in processing AOG requests especially with AIrbus – Check with requestor and
make sure the details are available with us
 AOG fee need to be mentioned in quote
 Logistics team to be alerted on processing AOG RFQs

Quote Follow UP
 Quote to PO conversion is highly important in converting RFQ to PO. below mentioned points to be covered in quote
follow ups. 
 Call up the customer, Just After sending the Quote
 Ask for feedback regularly
 Offer Discounts, If necessary
SALES & PURCHASE
SALES ORDER
Strict and constant follow ups will fetch us Purchase Orders from the customer, which will be called as a sale order for us.
Sale orders need to be recorded in the system. Any changes in the PO in comparison with the quote to be identified and
recorded, Sales order should match with customer PO. 

Changes in Sales order

Scenario1: Change in quantity

In few cases customers would ask for quantity let’s say 100 qty of a part number, later after receiving the quote they
may increase or decrease the quantity analyzing current requirement or recommendation from the engineers. In the
purchase order they will order as per their requirement. While receiving the order we have to cross check the quantity
ordered and sales order should be created accordingly. If any extra charges need to be added, we need to get approval
from the customer to add those charges in the sales order.

Scenario2: Change in pricing

Some cases the customer will forward the order with a different pricing as per their discussion with the sales heads or
KAMs. in such cases we have to confirm the price change with the managers and create the sales order
SALES & PURCHASE
SALES ORDER
Strict and constant follow ups will fetch us Purchase Orders from the customer, which will be called as a sale order for us.
Sale orders need to be recorded in the system. Any changes in the PO in comparison with the quote to be identified and
recorded, Sales order should match with customer PO. 

Changes in Sales order

Scenario1: Change in quantity
In few cases customers would ask for quantity let’s say 100 qty of a part number, later after receiving the quote they
may increase or decrease the quantity analyzing current requirement or recommendation from the engineers. In the
purchase order they will order as per their requirement. While receiving the order we have to cross check the quantity
ordered and sales order should be created accordingly. If any extra charges need to be added, we need to get approval
from the customer to add those charges in the sales order.
Scenario2: Change in pricing
Some cases the customer will forward the order with a different pricing as per their discussion with the sales heads or
KAMs. in such cases we have to confirm the price change with the managers and create the sales order
Scenario3: Change in shipping address
Shipping addresses may change depending on the aircraft locations, in such cases customers will need the units shipped
to address other than their normal shipping address, this need to be clearly taken care and required amendments need
to be incorporated in the sales order.
In General, sales orders should be the mirror image of the purchase order received.
PURCHASE MANAGEMENT
PURCHASE MANAGEMENT
In this module we will discuss on purchase orders, normally we deal with 2 types of purchase orders as mentioned
below 
I. Customer Purchase Order
II. Vendor Purchase Order

CUSTOMER PURCHASE ORDER

Sales quotes will get converted to customer Purchase orders. We have 2 types of customers Prepay and NET30 (Credit)
Customers. Below are the steps for processing PO.

PREPAY CUSTOMERS
 Acknowledge the PO
 Forward Proforma Invoice
 Add Sales order & Upload PO copy
 Forward PO and Sales order# to Logistics
 Track for Payment confirmation
 Process Purchase once payment confirmed (This process we will discuss in vendor PO part)
 Forward shipment update to customer with details like PO#, Part#, AWB#
 Forward Shipping Details and Certificates copy to logistics
PURCHASE MANAGEMENT
CREDIT / NET30 CUSTOMERS
 Acknowledge
 Add Sales order & Upload PO copy
 Check if any payment hold imposed for the customer
 Process Purchase
 Forward shipment update to customer
 Forward Shipping details and certificates to logistics

Shipment Update to customer Format

PURCHASE MANAGEMENT
Shipment update to Logistics

NOTES:
o Check and confirm the price, quantity and total mentioned in the PO with Sales quotation
o Customers may make changes in quantity and prices as per their requirement, PI and SO should match with
customer PO.
o PO Reference number to be added in SO
o Please add notes for any special cases like long lead time, PO cancellation etc
PURCHASE MANAGEMENT
VENDOR PURCHASE ORDER
Once the payment confirmation is done, we can proceed with vendor PO. Vendors PO categories
I. Prepay Vendor
II. Credit Vendor

NEGOTIATION
Before we release the PO, we should rework on the PN and do hard core negotiation to increase the revenue. Below are
steps and tips for negotiation.

Step#1:REWORK ON PART NUMBER

 Check email and quote@gfa inbox for any new quotes received after quoting to the customer.
 Check any of our Credit/Known vendors showing stock and not yet quoted, If yes get quotes over the phone

Step#2:SELECT BEST THREE QUOTES

 Select best 3 quotes considering Tag, Condition and Vendor Terms (Ensure we match with the tag and CD in the initial
quote to customer)
 Start Negotiating assessing the priority (AOG, Critical) of the order, Market Price of the unit, and the revenue you
need to make out of the deal.
 Ask for certs copy and picture of the unit for review
 Based on the price, certificate, picture & Credit Terms confirm the vendor for purchase
PURCHASE MANAGEMENT
TIPS for Negotiation
Always try to negotiate in the AM (vendor timing).
Attract vendors by Informing that you have firm PO in hand.
Always offer value lesser than the target you have in mind.
Build personal rapport with the vendor point of contact.
Compare quotes by other vendors and ask for more discounts.
Degrading the offered unit by pointing old tag, certs etc
Pampering or flattering the supplier POC

Last Step: If the vendor is very adamant and not giving any discount, please ask for waiving off associated charges like
CC, Hazmat, Handling (if any)

Note: Emails are the best tool for Negotiation, As we have the option for assessing the reaction of the vendor and getting
back with our request again. Negotiation over the phone will force you for a quick decision making.

Special Instruction: “While Negotiation, Never inform the vendor on the AOG/Critical nature of the Unit/Order ”
PURCHASE MANAGEMENT
Prepare the PO with Vendor details, PN details with qty, cert, tag date, Warranty and price. Ship to address, and
shipping method also need to be mentioned.

 PREPAY VENDOR PO PROCESSING

 Release PO
 Ask for Proforma invoice and Payment method (Wire Transfer, CC, Paypal)
o CC Payment – Forward CC form to Concerned person and get the details filled
o Paypal or online payment plat form – Forward link to Manager or Finance and get the payment receipt
o Wire transfer – Forward invoice and bank account details to manager for processing and get the wire
transfer slip
 Forward the payment proof to the vendor and ask for shipping details and PPW
 Forward Shipping details and PPW to Logistics
 Forward shipment update to customer
 
CREDIT VENDOR PO PROCESSING
 Release PO stating credit terms
 Request for shipping details and PPW
 Forward Shipping details and PPW to Logistics
 Forward shipment update to customer
PURCHASE MANAGEMENT
NOTES:
Any revision in PN, Quantity, and Price needs to be updated in the system on time.
(Verbal or email confirmation need to be updated in system)

Scenario1: Change in PN
After releasing the PO, vendors might come back stating that the unit they are having is an alternative to the PN in the
PO. If the PN is acceptable we have to revise the PO, as the physically receiving PN will be a different one to the one we
have originally requested in the purchase order.
Scenario2: Change in quantity
Take an example: we have released PO for a lamp PN:387 and quantity 50. This PN:387 comes in an OEM packing of 24
each. Vendors can sell the units only in a multiple of 24. In this case either we have to amend the quantity to 48 or 72
each.
Scenario3: Change in price
In very few cases vendors use to come back stating that the price of the unit is different due to different reason like
 They have quoted wrong price by error
 Price has been updated by the manufacturer
In such cases we have to amend the pricing to match with the vendor.

o Any charges (Aog, Hazmat, Handling etc.) mentioned in proforma or final invoice need to be updated in the system.
o Logistics need to be copied in all vendor PO related email communications.
o Need to have regular follow up with the vendor for Proforma and shipment
THANK YOU