How Accurate Are Your Supplier Quotes - And How Can You Challenge the Price? 

When it comes to sourcing, precision is non-negotiable. A supplier quote might appear solid at first glance, but often it conceals outdated pricing, unverifiable assumptions, or overlooked cost drivers. For OEMs operating within tight sourcing cycles and strict cost targets, these inconsistencies are more than an annoyance - they pose a measurable risk to margin, timeline, and supplier strategy. 

Cost engineers and procurement professionals are responsible not just for reviewing quotes, but also for validating cost logic, assessing technical feasibility and preparing the groundwork for supplier negotiations. Each quote must withstand scrutiny from internal stakeholders and provide a defensible basis for supplier selection. 

At this level, quote validation becomes a core discipline within sourcing. It is no longer a manual checkpoint - it’s a strategic lever that impacts both cost control and decision speed. When hundreds of supplier quotes can be generated by a single programme, accuracy cannot be treated as a secondary concern. 

Why Supplier Quote Validation Has Become So Complex 

Each sourcing round introduces a new wave of supplier quotes. In large OEM programs, it is common to receive over 1,000 quotes across several hundred unique parts. These quotes are expected to provide a clear cost structure covering material, labor, tooling, overheads and logistics. While this may be the intention, the reality often looks quite different. 

Quotes arrive in inconsistent formats, often with varying levels of detail and limited transparency. Key cost inputs - such as cycle times, machine utilization, or labor categories - are frequently omitted or loosely defined. In many cases, suppliers apply internal assumptions without documenting them, making it difficult to trace the logic behind the numbers. And despite alignment efforts between engineering and procurement, quotes are still regularly based on outdated specifications, making meaningful validation nearly impossible. 

These discrepancies create friction throughout the sourcing process. Without standardized, validated data, it becomes significantly harder to compare offers, identify outliers or justify decisions during internal review boards. More importantly, they weaken the OEM’s position ahead of negotiations. A quote that cannot be broken down cannot be challenged effectively. 

Timing adds another layer of complexity. According to a recent study, more than half of manufacturers need at least six weeks to deliver a quote for complex assemblies. However, sourcing milestones remain fixed. OEMs must make decisions faster, yet are forced to rely on quotes that are both delayed and incomplete. In such a context, manual quote review, often still conducted in Excel, becomes a structural bottleneck, not just a process inefficiency. 

Why Quotes Alone Aren’t Enough to Make Confident Decisions 

A supplier quote may arrive on time and appear professionally formatted, but structure does not guarantee accuracy. Beneath a well-organized document, there are often critical gaps: lump-sum pricing without cost driver transparency, labor rates that overlook regional differences, or material pricing that isn’t indexed to the current market. These issues make it impossible to assess whether the offer reflects actual production conditions or supplier risk mitigation. 

Such inaccuracies may seem minor in isolation - a misaligned batch size or an omitted setup time. But across a program involving hundreds of parts, even small deviations accumulate. The result is a gradual erosion of margin and a loss of leverage in commercial discussions. Without full visibility into what a quote is based on, it becomes difficult to challenge supplier assumptions or justify sourcing decisions internally. 

The Real Bottleneck: Volume and Manual Work 

Quote validation is not a one-time task. It is a continuous responsibility that scales with every sourcing cycle. For each part, there may be multiple quotes from several suppliers. Each needs to be reviewed against internal benchmarks, technical assumptions and program targets. 

Many teams still rely on spreadsheets or disconnected systems to handle this workload. While these tools can support basic comparisons, they fall short when the process requires collaboration across departments, consistent documentation and traceable inputs for audits. 

Manual efforts introduce unnecessary risk. Cost engineers often spend more time standardizing data than interpreting it. When procurement, finance, and engineering work from different versions, misalignment leads to delays. By the time the data is consolidated, the opportunity to challenge or negotiate may have already passed. 

A process that relies heavily on manual work slows down decision-making and makes it difficult to act with confidence when it matters most. 

Why More OEMs Rely on Product Costing Software 

To manage the growing complexity of sourcing decisions, OEMs are turning to dedicated product costing tools that move beyond static spreadsheets. Tset enables cost engineers to simulate, validate and compare supplier quotes using data that reflects both internal expertise and external market data. 

By moving away from disconnected files and manual workflows, teams not only gain consistency, but also transparency and speed, thereby enabling them to shift from reviewing quotes to leading negotiations with confidence. 

Automated bottom-up costing 

Tset enables automated bottom-up costing, using internal process data alongside external benchmarks. Instead of relying on supplier estimates, cost engineers can build their own cost models from material inputs, process assumptions, and machine data. Tset comes with data packages for all relevant cost factors, i.e. materials, machines, labor, space, interest rates and overheads.  

Scenario-based simulations 

Sourcing decisions often hinge on variables like batch size, geography, or technology selection. With Tset, users can simulate these scenarios on demand and see the impact on cost without rebuilding spreadsheets. This helps procurement teams proactively compare options, evaluate trade-offs, and approach supplier conversations with clear alternatives in hand. 

Improved cross-functional collaboration 

One of the biggest slowdowns in RFQ processes comes from siloed tools and disconnected versions. Tset provides a shared digital environment where procurement, engineering and finance work from the same data, using structured templates and traceable models. This reduces friction, shortens decision timelines and strengthens alignment across departments. 

Be Ready to Challenge the Quote 

At the end of the day, supplier quotes are only a proposal. It is your responsibility to test their accuracy, assess their logic and understand their assumptions. Accepting a quote without scrutiny can lead to sourcing decisions that don’t hold up under internal review or negotiation pressure. 

With structured product cost analysis and should-costing, you don’t just identify cost gaps - you understand why they exist and what to do about them. You shift from reacting to supplier data to leading the conversation with your own.