What is vendor evaluation in SAP MM - Materials Management?

SAP Term: vendor evaluation

• Component: MM

• Component Name: Materials Management

• Description: A program that provides a decision basis for selecting and controlling sources of supply. The user can specify and weight the main criteria for evaluating a vendor. The main criteria are: Delivery reliability Price Quality General service and support The main criteria can be divided into subcriteria. The system computes a points score for the vendor based on the weightings given to the criteria. The user specifies the maximum attainable score.

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• Key Concepts: 
  Vendor evaluation is a process in SAP Materials Management (MM) that allows companies to assess the performance of their vendors. It involves collecting and analyzing data on the vendor’s performance, such as delivery times, quality of goods, and pricing. This data is then used to determine whether the vendor is meeting the company’s expectations and if any changes need to be made.
  
  How to use it: 
  In SAP MM, vendor evaluation is done through the Vendor Evaluation module. This module allows users to create evaluation criteria, assign weights to each criterion, and enter data for each vendor. The system then calculates a score for each vendor based on the criteria and weights. This score can then be used to compare vendors and make decisions about which ones should be used in the future.
  
  Tips & Tricks: 
  When setting up vendor evaluation criteria, it is important to make sure that they are relevant to the company’s needs. For example, if delivery times are important, then this should be included as a criterion. Additionally, it is important to assign appropriate weights to each criterion so that they accurately reflect the company’s priorities.
  
  Related Information: 
  SAP MM also includes other features related to vendor evaluation, such as Vendor Performance Analysis and Vendor Performance Reports. These features allow users to analyze vendors over time and generate reports that can be used for decision-making purposes. Additionally, SAP MM includes a Vendor Master Data module which allows users to store information about vendors such as contact details and payment terms.