This document explains how to perform supplier evaluation and how supplier statistics can be used to evaluate the performance of different suppliers.
Use supplier evaluation and statistics to analyze the following:
For more information, refer to the related documents listed in the See also section.
The parameters in Define Settings for Supplier Evaluation and Statistics must be defined.
Purchase statistics contain information about the closed purchase order lines for each item or for each supplier. Depending on how this value is set in 'Purchase Order Types. Open' (PPS095), the purchase order line is closed. It is ready for statistics upon completion of put-away or ready for statistics after invoice reporting.
You can re-create purchase statistics in 'Purchase Statistics. Re-Create' (PPS910).
Delivery time measurement enables you to view a supplier's delivery performance on a summarized or detailed level. The statistics are available both on screen and as a report.
On the summarized level, you measure the delivery performance of the supplier by filtering the possibilities of order priority, delivery time period, discrepancy days, facility, and receiving warehouse.
On the detailed level, the same information is measured in a combination of item and supplier. It is displayed in 'Delivery Time Statistics. Display Detail' (PPS460/B).
In the reports, you can display the statistics in the supplier's language. This makes it easy to be in constant contact with the suppliers and discuss appropriate measures for improvements and results.
The statistics report enables you to compare the current and previous half-year periods in order to preview and monitor trends.
The statistics contain aggregated information on the number of purchase order lines and supplier evaluation. This is displayed in 'Supplier Statistics. Display' and printed in 'Supplier Statistics. Print' (PPS860).
Supplier evaluation statistics contain measurements of four factors:
You can measure the progress of individual suppliers, as well as measure suppliers against each other based on the past performance by creating key performance indicators.
These key factors are calculated automatically according to the setup in 'Settings - Purchase Statistics' (PPS430).
The setup in PPS430 is the input to calculate a summary performance value for the suppliers during a specific period. The optimal value of the performance is 1 (Perfect Supplier). The performance value is calculated by weighting the following factors:
The factors K10-K13 are weights that reflect the importance of each factor. For example, if all the factors are equally important to the company, you can set the factors to 0.25 each. If the delivery times and the delivery quality are the only factors that are important, you can set each of these to 0.5 and let the other two be zero.
Connection between K Factors
Period factor K2 is used to calculate delivery performance. K2 indicates the tolerance level for delivery delays. The higher the value on this field, in days, the more tolerant it is to supplier delays. The formula is:
|1 – Number of Delay days|
|Delivery Performance =||_______________________|
|Number of Closed Orders x K2|
K30-K32 are factors used to calculate the delivery quality.
|1 – K30 x No.Appr lots + K31 x NoPartlyRejLots + K32 x NoRejlots|
|Quality Performance =||_______________________|
|Number of lots|
The factors K4 and K5 indicate the tolerance for early deliveries and invoice quality.
|Cost Early Delivery|
|Performance Early Delivery = 1 – K4 x||_______________________|
|Number of incorrect Invoices|
|Invoice Performance = 1 – K5 x||_______________________|
|Number of Invoices|
Quality Inspection Statistics
Quality inspection is performed in 'Inspection Statistics. Display' (PPS465), 'Inspection Statistics. Print' (PPS880), and 'Inspection Statistics. Print Analysis' (PPS875).
'Inspection Statistics. Print' (PPS880) offers a detailed list of inspections performed with a description of the results. Reports can be selected using language codes.
'Inspection Statistics. Print Analysis' (PPS875) is a detailed list displaying two periods in parallel; facilitating supplier development analysis. You can select reports using language codes.
You can use ABC classification as a method to classify suppliers. Based on the yearly purchase volume, ABC classification is calculated automatically. It can also be updated manually.
The suppliers are classified into different groups depending on different aspects such as quality and delivery time.
The ABC classification details are updated in 'Supplier. Define Purchase & Financial' (CRS624). If automatic update of the ABC Class field is selected, the update is done in 'ABC Classification Supplier' (PPS445).
The details of the ABC classification can be printed in 'ABC Classification Supplier' (PPS445).