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In this exercise, we will review the setup for Vendor Evaluation and observe the impact of
manual entries and automatic calculations on Vendor Evaluation Scores. We will look at two
vendors, ## Battle Creek Baking Products and ## Farmington Food Products.
1. Change Purchasing Info Records
First, we need to make a change to the purchasing info records for both vendors. To change the
purchasing info record, follow the menu Path:
Logistics Materials Management Purchasing Master Data Info Record
Change
This will call up the following screen:
Enter:
Vendor 1003##
Material ##R320
Purchasing Org. ##PR
Plant ##PT
Then click on the enter icon
Enter:
Vendor 1003## (Battle Creek Baking Supplies),
Material ##R320 (Cinnamon)
Purchasing Org. ##PR
Plant ##PT
then click on the enter icon (
). This will call up the following screen:
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Click on the “Purch. org data 1” icon
Click on the “Purch. org. data 1” icon (
screen:
). This will call up the following
Enter 20 for Overdeliv. tol.,
then click on save
We want to allow for over-deliveries—delivery of more than the ordered quantity—to see how
this impacts supplier evaluations.
Repeat this change for material ##R320 and vendor 1004## (Farmington Food Products).
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2. Run Automatic Vendor Evaluation
There are four main evaluation criteria configured for vendors of goods: Price, Quality,
Delivery and Service. Both Price and Delivery are scored automatically: Price is determined
from data in the purchasing info records (and market prices, if configured) while Delivery is
determined from data recorded at the time of goods receipt. The Service criteria are entered
manually, and represent a subjective evaluation of the vendor’s service quality. Quality is
determined from inspection reports and complaints recorded in the Quality Management (QM)
Module. Quality has not been configured for this exercise.
We will first run Automatic Evaluation to see what happens with the current data in the system.
To run Automatic Vendor Evaluation, follow the menu Path:
Logistics Materials Management Purchasing Master Data Vendor
Evaluation Automatic New Evaluation
Which will call up the following screen:
Enter 1003## for Vendor and
##PR for Purchasing
Organization, then click on
the execute icon
This will call up a small pop-up window:
Enter Weighting key 01 (equal weighting), then press the return key. There is no enter icon on
this window—a rare oversight. This will bring up the following Vendor Evaluation summary:
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Click on the value for the price
level subcriteria, then click on
“Individual log” icon
Only three of the main criteria are listed—the ones that are determined automatically. The
service criteria is determined manually, and so does not appear on this report. Scores have only
been calculated for Price, as pricing data is available via conditions in the purchasing info
records. Click on the score 85 for the Price level subcriterion, then click on the Individual log
icon. This will produce the following screen that details the information used in this score:
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Click on the score for
Cinnamon, then click
on the Detailed
information icon
Note first of all that the pricing score is based on all materials provided by this vendor. Click on
the score for Cinnamon, then click on the Detailed information icon to see what values were used
in calculating this score:
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Info record 53000004## is the
purchasing info record for this
vendor and material
Comparison Price is
average of both vendor’s
prices in this case
Because the market price has not been configured, the system calculates the Comparison price by
averaging the prices from all vendors with info records for this material that have conditions set.
For cinnamon, there are two vendors, both with the same price, so for ## Battle Creek Baking
Supplies, the price variance is zero, and the score configured for a zero price variance is 85. The
following screen show the scores configure for the price level (note: you do not need to go to
this screen):
Score is 85 for
zero price
variance: score is
higher for a
negative variance
Screen shot
from Vendor
Evaluation
configuration
in IMG
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Note that the score is only 85 for a zero price variance. Lower prices are good, so a negative
price variance is given a higher score. Cancel out of the Additional Information window, then
click on the back icon ( ) to get to the Scores screen:
Click on the save icon ( ) to save the new scores. Click on the exit icon (
SAP Easy Access screen.
) to return to the
3. Change Condition (Price) in Purchasing Info Record
Next, we will see the impact of a price change on the Price Criteria of the vendor evaluation. To
change the purchasing info record, follow the menu Path:
Logistics Materials Management Purchasing Master Data Info Record
Change
This will call up the following screen:
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Enter:
Vendor 1003##
Material ##R320
Purchasing Org. ##PR
Plant ##PT
Then click on the enter icon
Enter:
Vendor 1003## (Battle Creek Baking Supplies),
Material ##R320 (Cinnamon)
Purchasing Org. ##PR
Plant ##PT
then click on the enter icon (
). This will call up the following screen:
Click on the “Conditions” icon
Click on the Conditions icon (
). This will call up the following screen:
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Click on New validity
period
Click on the New validity period icon to enter a new base price:
Enter 3.09 for the new price
(Amount), then click on the save icon
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Enter 3.09 for the new price, then click on the save icon ( ) to save the new condition (price).
Click on the exit icon ( ) to return to the SAP Easy Access screen.
4. Rerun Automatic Vendor Evaluation
To see the impact of this price change, we need to rerun the Automatic Vendor Evaluation. To
do this, follow the menu Path:
Logistics Materials Management Purchasing Master Data Vendor
Evaluation Automatic New Evaluation
This will again call up the following screen:
Enter Vendor 1003##
and Purchasing
organization ##PR,
then click on execute
After executing the Automatic New Evaluation calculation, the following report will appear:
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The new scores are
correct
Click on the score for
Price level (84) and
then click on
Individual log
Click on the score for Price level (84), then click on the Individual log icon to get more detail on
the calculation:
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Note that the score for
cinnamon is now different
Click on the cinnamon
score, then click on
Detailed information
Note that the score for cinnamon is now 75. The composite score for price level is the average of
these 11 scores, which is now:
Main Criteria Score 
10 85   75
 84.09
11
Clicking on the score of 75 for cinnamon and then clicking on the “Detailed information” icon
will produce the following window:
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The market price is again estimated by the average of the two prices for cinnamon, truncated to
two decimal points:
 3.00  3.09 
Market Price  truncate
, 2   3.04
2


So the variance percentage for cinnamon from ## Battle Creek Baking Supplies is:
variance percentage 
3.09 - 3.04  X 100  1.32
3.04
And the score that this variance percentage retrieves from the configuration settings is 75, as
illustrated below:
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Score = 75
(percentage
of 1.32 is
rounded up)
Screen shot
from Vendor
Evaluation
configuration
in IMG
Because the market price is estimated from two vendor prices, the variance for ## Farmington
Food Products is the same magnitude, only negative. It produces a different score because the
scores are higher for a negative variance (lower score). Confirm this by using the exit icon ( )
to return to the SAP Easy Access screen (save the new evaluation), then run the Automatic New
Evaluation transaction for vendor 1004## (## Farmington Food Products) with weighing key 01:
Price level score is different
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Note that the price level score is different than for Battle Creek Baking Supplies (84). Click on
the exit icon (
) to return to the SAP Easy Access screen. Save the new evaluation.
5. Create POs for Cinnamon
We will now create and receive purchase orders to see how delivery times impact the vendor
evaluation. We will use the method create PO with vendor known (transaction ME21N):
Logistics Materials Management Purchasing Purchase Order Create
Vendor/Supplying Plant Known
which will call up the following screen:
Enter 1003## for vendor,
##R320 for Material, 100 for
PO quantity and today’s date
for the delivery date, then
click on enter
Enter the data shown above, then click on the enter icon ( ). Enter any data as required (plant,
purchasing organization, etc.) and ignore any delivery date warning messages by clicking on the
enter icon ( ), then save the Purchase Order, ignoring the system message.
We will create a second purchase order for Farmington Food Products. Make entries in the
purchase order screen as shown below:
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Enter 1004## for vendor,
##R320 for Material, 100 for
PO quantity and a date three
days in the past for the
delivery date, then click on
enter
Make sure to enter vendor 1004## (Farmington Food Products) and a date three days in the
past. This will create a number of warning messages, but it will allow us to see the impact of a
late delivery. Click on the enter icon ( ). Supply any required organizational data, and ignore
the numerous delivery date warning messages by clicking on the enter icon ( ), then save the
Purchase Order, ignoring the system message.
6. Perform Goods Receipt for POs
The data used to calculate the Delivery criteria score is generated when purchase orders are
received. To perform the goods receipt for a purchase order, we will use the goods receipt for
purchase order transaction (MIGO_GR):
Logistics Materials Management Inventory Management Goods Movement
Goods Receipt For Purchase Order GR for Purchase Order (MIGO)
which will call up the following screen:
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Click on the search
field to call up the
search screen
Select the search tab Purchase Documents per Vendor and fill in the following fields (which may
be already filled in by default):
Specify Vendor 1003##,
Purch. Organization ##PR
and Purchasing Group
##S, then click enter
By specifying the vendor in the search criteria, the system should come up with only one
purchase order. If more than one appears, the purchase order with the highest number will be the
one you are looking for:
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Double-click on the
purchase order with the
largest number to select it
For the Battle Creek Baking Supplies PO, we will see how an over-delivery affects their vendor
evaluation. Click on the enter icon ( ) to call up the PO details and process the goods receipt as
shown, making the receipt for 110 lb. of cinnamon:
Check OK, change the delivery quantity
to 110 and specify storage location 100
Click on the save icon ( ) to post the goods receipt. While you are still in this transaction,
search for the purchase order from Farmington Food Products (vendor 1004##). Because the
required delivery date was set three days in the past when the PO was created, this goods receipt
will be late when it is processed today. Process the receipt as shown below:
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Click on the save icon (
) to post the goods receipt.
7. Rerun Automatic Vendor Evaluation
To see the impact of these goods receipts on the Delivery vendor scores, follow the menu Path:
Logistics Materials Management Purchasing Master Data Vendor
Evaluation Automatic New Evaluation
This will again call up the following screen:
Enter Vendor 1003##
and Purchasing
organization ##PR,
then click on execute
After executing the Automatic New Evaluation calculation, the following report will appear:
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Click on the Quantity
reliability score (your
numbers may be different),
then click on the Individual
log icon
The Individual log report shows the data used to generate the score:
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Because the delivery for ## Battle Creek Baking Supplies was 10% over the ordered quantity
(100 lb. ordered, 110 lb. delivered), a Quantity Reliability score of 50 was assessed FOR this
order:
Score is 50 for an
over-delivery of
10 percent
Screen shot
from Vendor
Evaluation
configuration
in IMG
However, because there have other deliveries made by this vendor that have been for the correct
quantity, the rating for delivery quantity reliability for material ##R320 is 80, and the overall
quantity reliability rating is currently 98.
Use the back icon ( ) to get out of this vendor evaluation, saving the evaluation as you exit.
Run the Automatic New Evaluation for ## Farmington Food Products, vendor 1004##:
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Click on the on-time
delivery score (yours may
be different), then click on
the individual log
The individual log shows that the score of 70 comes from one late delivery:
does not provide any useful details about the On-time delivery score. The score of 70 was
defined in configuration:
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Score is 70 for a
delivery that is 3
days late
Screen shot
from Vendor
Evaluation
configuration
in IMG
Use the back icon (
) to get out of this vendor evaluation, saving the evaluation as you exit.
8. Maintain Manual Vendor Evaluation Data for Service
The Service main criteria are entered manually. To see how this is done, follow the menu Path:
Logistics Materials Management Purchasing Master Data Vendor
Evaluation Maintain
And the following screen will appear:
Enter ##PR for Purchasing
organization and 1003## for
Vendor, then click on the
Main criteria icon
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This transaction (ME61) allows the user to individually update both manual and automatic
scores:
Select the service main
criteria, then click on the
details icon
Manually enter the following service scores for ## Battle Creek Baking Supplies:
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Save these scores, then repeat the scoring process for Farmington Food Products (1004##) using
the following scores:
Subcriterion
Prod. Devel.
Purchasing
Materials Mgmt.
Score
60
98
95
9. Using Vendor Evaluation in Purchasing
One of the functions of vendor evaluation is the selection of a vendor for a purchase order. To
see how vendor evaluations can be used in the purchase order process, we will use the
transaction to create a purchase order with vendor unknown (ME25), which means we want to
choose the vendor as part of the PO creation process. To do this, follow the menu path:
Logistics Materials Management Purchasing Purchase Order Create
Vendor Unknown
And the following screen will appear:
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Enter ##S for Purchasing Group,
##PT for Plant and 100 for Storage
Location, then click on the enter icon
Click on the enter icon (
) to get the following screen:
Enter material ##R320, Qty
requested 100 and a delivery date
two weeks in the future, then
click on the enter icon
Select the line and then click on the Assign supply source icon:
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Select the line, then click
on Assign supply source
If only one vendor was defined via purchasing info record for this material, that vendor would be
assigned to the material without much fanfare by the system. As two vendors are available, the
system gives us a choice:
Click on Vendor eval.
Click on the “Vendor eval.” icon and a vendor evaluation summary will appear:
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Click on Farmington Food
Products, then click on the
evaluation icon
This report summarizes the vendor evaluation scores for the two vendors, and also provides a
link to a display-only version of the Maintain Vendor Evaluation transaction (ME62). Click on
Farmington Food Products, then click on the display Vendor Evaluation icon to see the
evaluation details for this vendor:
After reviewing the vendor evaluations, exit back to the SAP Easy Access screen.
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10. Rerun Automatic Vendor Evaluation
To complete this assignment, run the Automatic Vendor Evaluation transaction for both vendors
(1003## and 1004##) using transaction code ME63 or the menu path:
Logistics Materials Management Purchasing Master Data Vendor
Evaluation Automatic New Evaluation
Print the score summary sheet for each vendor:
Print the report shown above for both vendors.
Staple the reports together, write your name clearly on the first
sheet and hand them in.
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