Explaining KPIs in Supplier Evaluation

The SAP HANA-based supplier evaluation contains hard facts and soft facts. For the hard facts, you have to define the weighting of the criteria and assign scores in Customizing or using the SAP Fiori app Supplier Evaluation Weighting and Scoring.

To select and weight the criteria, choose the app Supplier Evaluation Weighting and Scoring.

The following key performance indicators (KPIs) are available for analysis:

1. Overall Supplier Evaluation:

   This app determines the score of a supplier in an organization based on the operational and questionnaire scores. The score is calculated over the previous year to date. It combines scores from the weighted hard facts available from the different criteria (price, time, and quantity), and the soft facts available from questionnaire results.

2. Operational Supplier Evaluation:

   This app determines the score of a supplier in an organization based on the weighted average of the quantity variance, price variance, and time variance. The score is calculated over the previous year to date. The overall score is calculated from the variance available from the different criteria, and then the weighting is applied. You can adjust the scores with the app Adjust Operational Supplier Evaluation Score.

3. Supplier Evaluation by Quantity:

   With the Supplier Evaluation by Quantity app, you can determine the quantity variance, which is based on the variance between the ordered quantity and the delivered quantity of items. Both the excess and the lower delivered quantities are considered as variances. The score is determined over the previous year to date.

4. Supplier Evaluation by Time:

   You can use this app to determine the score of a given supplier in an organization based on the difference in time between the ordered date of items and delivered date of items. The score is calculated over the previous year to date. Both the late and early deliveries of items are considered as variance. You can also see the time variance by delivery date. Every day variance counts 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 organization 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 in the purchase order amount and 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:

   With the Supplier Evaluation by Quality app, you can determine the overall quality score of a supplier based on inspection results. Each inspection lot is recorded, and the purchase order and purchase order item are used to track the supplier. The score is determined from the previous year to date.

7. Supplier Evaluation by Quality — Quality Notification:

   With this app, you can evaluate suppliers based on score that is calculated on the basis of quality complaints received. You can identify the suppliers with less received complaint notifications and thus with higher quality evaluation score. This helps you to determine the suppliers with the best performance and reliability. This app can also help you to decide which supplier to select if the purchasing conditions such as quality and price of material, quotation, and delivery time are the same.

With the Supplier Evaluation by Questionnaire app, you can determine the evaluation scores for the given suppliers based on the questionnaires. You can also view the target score for the supplier to compare it with the actual calculated score. The score is determined over the previous year to date.

Before you can start the evaluation process, you have to create questions and questionnaires.

With the Manage Questions app, you have to define all questions that you want to use in questionnaires. Within the app, perform the following steps:

• Define groups (optional step) to structure your questions within sections.
• Define sections for questions that refer to the same topic.
• Define questions (and optionally assign them to groups). You can select between different question types. For questions oft the Single Answer and Yes/No question types, you have to assign scores for the individual answer options.

With the app Manage Questionnaires you create questionnaires using your questions. The questionnaires can be assigned to purchasing categories. The questionnaires consists of sections and questions. The questions can be weighted.

With SAP S/4HANA, you can classify your suppliers by means of various criteria, such as spend, strategic importance, supply risk, compliance, and social responsibility. This facilitates supplier segmentation and best supplier portfolio.

You can access the classification screen from the supplier detail, which is called from the supplier list. To enter the data, you must click on Create New Scorecard.

The scorecard contains scores for soft facts, which can be integrated into the overall supplier evaluation by purchasing category.

The scores for the hard facts are calculated in real time when you start the apps. For questionnaires, the evaluation process has to be performed in several steps:

1. Create Evaluation Template:

   With the app Mange Templates, you create templates to repeatedly generate evaluation requests that share the same properties. As an example, requests generated from the same template use the same questionnaires. In the group-based evaluation process, evaluation templates are set up for peer groups of suppliers within specific purchasing categories. Therefore, both suppliers and the appropriate appraisers are assigned to evaluation templates in the group-based process. Evaluation templates include a selection of questionnaires and other information, such as the number of days until the response deadline, and texts. When an evaluation request is created, the data contained in the template is copied to the evaluation request. The questionnaires derived from the template cannot be changed, but other data such as the response deadline and texts can be modified according to your requirements.

2. Start Group Based Evaluation:

   This step is included in the Manage Templates app.

3. Maintain Evaluation Response as Appraiser:

   As an appraiser, you can use this app Evaluate Suppliers to access the questionnaire you are asked to fill out. You can also access responses that you have already given. You can display submitted evaluation responses, but you can no longer change them.

4. Display Scorecard:

   The Display Scorecards app shows the overall result of a supplier evaluation for one supplier from the evaluation scorecard. One scorecard exists for each supplier and evaluation request. For example, if you evaluate a supplier in yearly intervals, you have an evaluation scorecard for this supplier for every year. For an overview of all evaluation scorecards for a supplier, use the evaluation template.

5. Display Supplier Evaluation by Questionnaire:

   With the Supplier Evaluation by Questionnaire app, you can determine the evaluation scores for all suppliers based on the questionnaires. You can also view the target score for the suppliers to compare them with the actual calculated score.