What is vendor ranking in SAP IS-AFS-MM - Materials Management?

SAP Term: vendor ranking

• Component: IS-AFS-MM

• Component Name: Materials Management

• Description: Structuring the evaluation criteria of the source allocation in a hierarchy. Before each simulation run you specify which evaluation criteria should be weighted when searching for an appropriate vendor. Such evaluation criteria include quantity reliability, on-time delivery performance, factory status, and complexity factor. You weight them using percentages. Which vendor is determined as an optimum vendor depends largely on the settings of the vendor ranking.

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• Key Concepts: 
  Vendor ranking is a feature of SAP Materials Management (MM) that allows users to assign a numerical value to each vendor in order to prioritize them for purchasing. This numerical value is based on criteria such as quality, delivery time, and price. The higher the numerical value, the higher the priority for that vendor. 
  
  How to use it: 
  In order to use vendor ranking, users must first define the criteria they want to use for ranking vendors. This can be done in the Customizing menu of SAP MM. Once the criteria have been defined, users can assign numerical values to each vendor based on their performance in those criteria. The numerical values can then be used to prioritize vendors when making purchasing decisions. 
  
  Tips & Tricks: 
  When assigning numerical values to vendors, it is important to consider all of the criteria that have been defined. It is also important to keep in mind that the numerical values should reflect the relative importance of each criterion. For example, if quality is more important than delivery time, then vendors with higher quality should be assigned higher numerical values than those with faster delivery times. 
  
  Related Information: 
  Vendor ranking is closely related to vendor evaluation, which is another feature of SAP MM that allows users to assess vendors based on criteria such as quality and delivery time. Vendor evaluation can be used in conjunction with vendor ranking in order to make more informed purchasing decisions.