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Key Performance Indicators (KPIs) in Supplier Evaluation
The supplier evaluation system in SAP HANA incorporates both hard facts and soft facts. For the hard facts, you need to specify the criteria weightings and assign scores through Customising or via the SAP Fiori app Supplier Evaluation Weighting and Scoring.
To select and weight the criteria, choose the app Supplier Evaluation Weighting and Scoring.
Note: After changing the scores, you must run the report MM_PUR_SEWS_VAR_SCORE_UPDATE to recalculate the scores.
The following key performance indicators (KPIs) are available for analysis:
1. Overall Supplier Evaluation: This app evaluates a supplier's performance within an organisation by analysing both operational and questionnaire-based scores. The assessment covers data from the previous year up to the present date. It calculates the overall score by combining weighted hard metrics (such as price, delivery time, and quantity) with soft metrics derived from questionnaire responses.
2. Operational Supplier Evaluation: This app calculates a supplier's performance score within an organisation by taking the weighted average of three key metrics: quantity variance, price variance, and time variance. The score is derived from data collected over the past year up to the current date. The overall score is computed by first assessing variances across these criteria and then applying the appropriate weighting. If needed, you can modify the scores using the Adjust Operational Supplier Evaluation Score app.
3. Supplier Evaluation by Quantity: The Supplier Evaluation by Quantity app helps you calculate quantity variance by comparing the ordered quantity with the delivered quantity. Both over-deliveries and under-deliveries are counted as variances. The score is calculated based on data from the previous year up to the current date.
4. Supplier Evaluation by Time: This app helps you evaluate a supplier's performance score by analysing the time difference between when items were ordered and when they were delivered. The score is calculated based on data from the previous year to date, considering both early and late deliveries as variances. You can also track delivery time variances by date, with each day's variance counted as one percent.
5. Supplier Evaluation by Price: With the Supplier Evaluation by Price app, you can determine the score of a given supplier in an organisation based on the variance in the price of ordered items and invoiced items. The score is calculated over the previous year to date and is based on the difference between the purchase order amount and the invoice amount. Both the excess price and the lower price are considered as variances. This is completely different to the LIS-based supplier evaluation, where the price score is based on the info record prices.
6. Supplier Evaluation by Quality - Inspection Lot: The Supplier Evaluation by Quality app helps you calculate a supplier’s overall quality score using inspection data. It records each inspection lot and tracks suppliers by purchase order and item. The score is calculated based on data from the previous year up to the current date.
7. Supplier Evaluation by Quality - Quality Notification: This app allows you to assess suppliers using a quality-based scoring system determined by the number of complaints received. You can easily identify high-performing suppliers - those with fewer complaints and higher quality scores - helping you determine the most reliable partners. Additionally, if purchasing conditions like material quality, price, quotation, and delivery time are similar, the app assists in selecting the best supplier based on their performance metrics.
Questionnaire
Supplier Evaluation by Questionnaire App
This app allows you to assess supplier performance by calculating evaluation scores based on completed questionnaires. You can compare the actual scores with the supplier’s target score to measure performance. Evaluations are based on data from the previous year up to the current date.
Prerequisites for Evaluation
Before starting the evaluation process, you need to set up questions and questionnaires.
1. Manage Questions App
Use this app to define all questions that will be included in your questionnaires. Follow these steps:
- Define Groups (Optional): Organise questions into logical sections for better structure
- Create Sections: Group questions by topic for easier navigation
- Add Questions: Specify questions and assign them to groups if needed. You can choose from different question types. For single-answer and yes/no questions, you must assign scores to each answer option
2. Manage Questionnaires App
Once your questions are ready, use this app to build questionnaires. You can link questionnaires to purchasing categories and structure them with sections and questions.
Step by Step Process:
(Maintain the Number Ranges for the Purchasing Category in the path below 🙂
SPRO -> Materials Management -> Purchasing -> Supplier and Category Management -> Purchasing Categories -> Define Number Range for Purchasing Categories
SPRO -> Materials Management -> Purchasing -> Supplier and Category Management -> Supplier Evaluation -> Number Ranges for Supplier Evaluation -> Define Number Range for Questions / Define Number Range for Sections / Define Number Range for Question and Section Groups / Define Number Range for Evaluation Questionnaires / Define Number Range for Supplier Evaluation Templates / Define Number Range for Supplier Evaluation Requests / Define Number Range for Evaluation Responses / Define Number Range for Evaluation Scorecards
Step 1: Create Purchasing Category (App: Manage Purchasing Categories)
Click Create
Mention Purchasing Category Name, add the suppliers, and the internal team, etc.
Step 2: Supplier Evaluation and Scoring (App: Supplier Evaluation Weighting and Scoring)
Click Create
Set the Weighting percentage, and maintain the weighting factors for each Criterion as per your requirements.
Quantity
Time
Price
Save the data
Step 3: Open the Manage Questions Evaluation App (App: Manage Questions)
Pre-requisite config: Create Question Library in the original language in Customization in the below path
SPRO -> MM -> Purchasing -> Supplier and Category Management -> Supplier Evaluation -> Basic Settings for Supplier Evaluation -> Create Question Library for Supplier Evaluation
Click Section, New and mention Section Details.
Once saved, navigate to the Questions tab and create questions as per your requirements.
Yes/No Question
Single Answer Question allows the recipient to mention comments.
Mention the score for each answer in the Answers tab.
Step 4: Manage Questionnaire (App: Manage Evaluation Questionnaires)
Click Create
Mention the Questionnaire name, the person responsible and assign Purchasing Category (Several purchasing categories can be assigned, Not only one).
Navigate to the Questions tab, Maintain Overall Target and Overall Minimum Score and add the section that was created in the previous step.
Select the questions
You can set a question to disqualify suppliers based on their response by selecting the appropriate checkbox. This means that if the answer given to the question does not meet your expectations, the supplier is disqualified. The person answering the question does not see whether a question is disqualifying or not.
If the respondent gives a disqualifying answer, this is indicated in the evaluation or qualifying response. This indicator is only for your information and has no direct consequences on the status of the supplier.
Note: Only Yes/No questions can be marked as disqualified.
Click Release
Step 5: Manage Evaluation Templates (App: Manage Evaluation Templates)
The Manage Templates app lets you create reusable templates for evaluation requests with shared properties, like questionnaires. In group-based evaluations, templates are set up for supplier peer groups within specific purchasing categories, assigning both suppliers and appraisers. Templates include questionnaires, response deadlines, and texts. When generating a request, template data is copied—only deadlines and texts can be modified, not the questionnaires.
(Appraiser: An appraiser is a person responsible for evaluating and scoring a supplier’s performance using established criteria. They gather feedback, typically through questionnaires or interviews, and their evaluations are consolidated into a supplier scorecard.)
Click Create
Navigate to Appraisers, mention the Evaluation Template Name, Response deadline, and Purchasing Category.
Maintain the Appraisers.
(Appraiser: An appraiser is a person responsible for evaluating and scoring a supplier’s performance using established criteria. They gather feedback, typically through questionnaires or interviews, and their evaluations are consolidated into a supplier scorecard.)
Navigate to the Questionnaires tab and add the questionnaire that was created in the previous step.
Add the Suppliers under the Supplier Peer Group for which the Evaluation is to be performed.
Click Release
Click Start Group-Based Evaluation
Mention the Evaluation Request name, the Period to be evaluated, and click Submit Evaluation Request
Step 6: Evaluate Supplier (App: Evaluate Suppliers)
The supplier's list appeared here for evaluation, that are assigned to you.
Click on each supplier and evaluate them
Once after submission, the Overall score will be displayed according to the criteria and weighting set in the previous steps.
Similarly, perform the evaluation process for other suppliers, finally, the status will be changed to Submitted.
Step 7: Display Score Cards (Display Scorecards)
The Display Scorecards app shows a supplier's overall evaluation results from their scorecard. Each supplier and evaluation request has one scorecard. For example, yearly evaluations create separate scorecards per year. To view all scorecards for a supplier, use the evaluation template.
Target Score, Total Score, and Minimum Score are displayed for each supplier.
Click on the line item to see the detailed scorecard.
Step 8: Supplier Evaluation by Questionnaire (App: Supplier Evaluation By Questionnaire)
The Supplier Evaluation by Questionnaire app calculates supplier scores from questionnaires and lets you compare them against target scores.
View By Supplier, click on settings, select the views to Questionnaire Score, Minimum Score, and number of responses.
See by Document, Purchasing Category, and By Supplier.
Regards,
Leelamohan Mannem
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