Vendor Performance Evaluation

We all aware that in modern age the role of supply chain management has completely changed.

Now Supply chain management is making direct impact on companies bottom line so nowdays vendors are considered as Stake Holder of companies.

Hence Vendor performance evaluation becomes necessary for organizations.Vendor Performance monitoring is very imported for any domain and any product based company like mobile apple,auto etc

In below document we will see how to setup/config vendor performance monitoring/measurement In SAP.

Path for Configuration set up


SPRO Menu for vendor evaluation config

Weighting keys are used to give weighted rank to different evaluation criteria of vendors.

For example one company has selected Price of material, Quality of supplied material, Delivery performance, Payment terms and inco terms as criteria.

If Company wants to give importance to one criterion over another in that case weighting keys are used.

vendor evaluation weighting

List of Criteria selected.


 Criteria for vendor evaluation

Here we can also define sub criteria for main criteria, sub criteria is basically used to split down main criteria into More detailed performance measuring parameters.

 Sub Criteria for vendor evaluation

Scoring method is used to determine individual score for mentioned sub criteria.

If price level is assigned with key 4, It means that system will use purchase order details and relevant delivery details for scoring purpose.

you may assign this field as given below

- Empty field for manual score.

- Value 1 for semi automatic determination from info records.

- Value C or D for semi automatic at the time of service acceptance.

- Rest all other keys are used to determine score automatically.

 Vendor Performance Scoring Method

In score of list we can define various type of combination of same or different main criteria and sub criteria.

For example in VERSION-I Price, delivery and behavior given sequence 1,2 and 3 respectively While for VERSION II behavior, Price and delivery given sequence no 1,2 and 3.

 List Scope

Vendor evaluation has facility to define different settings for each purchase organization.

We can define following parameters for purchasing organization.

General parameters

- Maximum score that vendor can achieve.

- The maximum number of days data exists in system for evaluation.

- Factory calendar to be use for delivery performance.

Price level

- It indicates that vendor is single source of supply or not.

Quality audit

- Indicator whether the average score of all quality to be taken or result last Audit to be consider for scoring.

On-time delivery performance

- If delivery time varies that what percentage to be assign for scoring performance.

- Min qty of material delivered against order.

 Vendor Evaluation criteria for Purchase organization

We can also assign weighting criteria as equal or unequal to all main criteria.

 Vendor Evaluation Weighting for Purchase organization

Here we can define point criteria for difference internal range for automatic score calculation.

Vendor Point score for automatic criteria

Now run session ME62 for vendor performance evaluation criteria.

SAP Vendor Performance Evaluation

Run T Code ME63 for automatic score calculation for performance monitoring.

Automatic Calculate score for Vendor Performance Evaluation

Comparison sheet for Old and new scores.

 Vendor Performance Evaluation score comparison print vendor performance sheet by t code ME6F.  Print Vendor Evaluation sheet

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