Understanding SAP Supplier Evaluation: Criteria, Configuration, and Real-World Application

Published by : BELMACHIA Alaaeddine

Publication date : 28 July 2025

In this article :

Getting Started with Vendor Evaluation in SAP

Core Elements: Criteria, Subcriteria, and Weighting

Step-by-Step Configuration of Vendor Evaluation

Running Vendor Evaluations Day to Day

How Scores Get Calculated in Detail

Using Reports and Analyzing Vendor Performance

When you start working with SAP in procurement, vendor evaluation quickly becomes one of the most useful tools for making smarter sourcing decisions. The system lets you measure supplier performance using actual data collected during normal operations. It draws from purchase orders, goods receipts, and invoices to calculate scores that reflect how reliably vendors deliver materials on time, maintain quality, and handle other key aspects. These scores help guide choices in source determination and reduce reliance on subjective opinions. For example, in a manufacturing environment where production lines depend on steady material supply, a vendor who frequently delivers late sees their score decrease over time. This makes it straightforward to favor more consistent suppliers when the system suggests sources automatically.

Overview diagram of SAP vendor evaluation process flow

Getting Started with Vendor Evaluation in SAP

Vendor evaluation forms part of the Materials Management (MM) module and connects directly to purchasing activities. Its main purpose is to provide an objective ranking of vendors so organizations can consistently select the most suitable ones based on performance history. In standard SAP, evaluations are carried out at the purchasing organization level, which allows different company units to assess vendors according to their own transactions and priorities.You begin by configuring criteria that align with business requirements, and the system handles automatic scoring wherever data exists, while manual entries cover areas needing human judgment. Without this structured approach, procurement teams often rely on memory or ad-hoc notes when choosing vendors for the next purchase order. With evaluation active, SAP analyzes historical records such as price variations across orders or quality issues noted during goods receipt inspections. Scores fall on a scale typically from 1 to 100, with higher values indicating stronger performance.These scores do more than display numbers—they feed into processes like maintaining source lists or supporting contract discussions. In newer SAP S/4HANA environments, Fiori apps present this information through intuitive dashboards, so users can review trends without running complex reports. The evaluation links to inventory processes for quality verification and to information systems that aggregate data over periods.Consider a production line receiving raw materials from multiple suppliers. The delivery score emerges from comparing confirmed dates in purchase orders with actual goods receipt postings. Repeated delays of several days lower the score according to set tolerance levels, helping teams identify recurring issues like seasonal capacity constraints at a supplier. Running evaluations periodically, such as every quarter for critical items, keeps scores current and supports ongoing supplier relationship management.In retail operations sourcing consumer electronics, one vendor might achieve a strong quality score thanks to low defect rates confirmed through inspection lots, while another receives lower marks from frequent customer returns. This fact-based method shifts decisions away from personal preferences toward measurable results. It also plays a role in broader risk management, especially in international supply chains where compliance with standards matters. A consistently low service score, perhaps from slow order confirmations, can signal potential disruptions like stock shortages, prompting earlier diversification of sources.

Core Elements: Criteria, Subcriteria, and Weighting

The foundation of vendor evaluation consists of main criteria and their supporting subcriteria, which specify exactly what aspects get measured. Standard main criteria cover price, quality, delivery, and service, though you can add or adjust them as needed. Each main criterion receives a weight that reflects its relative importance to the business, so delivery might carry more influence in time-critical operations.Subcriteria provide the detailed breakdown. For the price criterion, typical subcriteria include price level, which compares a vendor's pricing against market or average figures, and price behavior, which tracks stability over time. Configuration happens in the Implementation Guide (IMG) under Purchasing > Vendor Evaluation, where you define these elements and their scoring approaches.Quality subcriteria often involve goods receipt inspections, where the system evaluates accepted versus rejected quantities, and sometimes quality audits or complaint levels. In a chemical supply scenario, if roughly five percent of batches show impurities leading to rejections in Quality Management (QM), the score adjusts automatically based on QM data. This integration ensures scores reflect real inspection outcomes without extra manual effort.Delivery focuses on on-time performance and quantity reliability. The system measures variances between scheduled and actual dates, applying smoothing to prevent single incidents from overly affecting results. In consumer goods distribution, a vendor achieving ninety-five percent on-time delivery earns a high score, whereas repeated short shipments pull it down. Configurable variance intervals define point deductions—for instance, minor delays up to two days might reduce points only slightly, while longer ones deduct more significantly.Price assessment determines competitiveness by comparing net prices from purchasing info records or orders against benchmarks. A vendor consistently quoting above average for identical materials receives a lower score, which in commodity buying like office supplies provides clear data for price discussions.Service tends to rely more on manual or semi-automatic input, assessing factors such as responsiveness to changes or accuracy in documentation. During evaluation of custom equipment suppliers, quick adaptation to specification updates would earn positive manual scores entered at the time of review.Weighting keys determine how these criteria combine into an overall score. You can set equal distribution or prioritize certain areas—for a food processing client, quality might receive forty percent weight due to regulatory demands, with price at twenty percent. The final score becomes a weighted average that mirrors operational priorities, and adjustments during implementation ensure the setup fits specific needs.Scoring methods for subcriteria include automatic for data-supported areas like delivery, semi-automatic with partial system input and manual confirmation, and fully manual for subjective elements. Automatic calculations draw from statistical structures such as those in table S013, normalizing results to the chosen scale.

Step-by-Step Configuration of Vendor Evaluation

Configuration begins with defining weighting keys in the IMG under Vendor Evaluation > Define Weighting Keys. You establish options for equal or unequal distribution, assigning relative factors to main criteria. In manufacturing setups, delivery might get a higher factor than price to stress supply reliability.Next comes defining the main criteria and linking subcriteria. Under Define Criteria, you specify entries like Price or Quality, assign subcriteria, and select scoring methods—automatic for on-time delivery, semi-automatic for shipping instruction compliance. Standard settings avoid custom user exits unless necessary.Purchasing organization-specific data follows in Maintain Purchasing Organization Data. For each organization, assign the chosen weighting key, decide on automatic reevaluation triggers, and maintain point scores for quantitative subcriteria. Variance tables here set how quantity deviations translate to points—overdelivery by ten percent might score eighty, while underdelivery by five percent scores ninety. In wholesale environments, these tolerances get adjusted to accommodate normal fluctuations.Scope of list definitions control report content, with options to include all vendors or filter by material groups, preventing overly broad outputs in large vendor portfolios. Number ranges usually use defaults, but quality integration requires QM setup to pass inspection data correctly. In pharmaceutical contexts, rejected lots automatically influence scores through linked notifications.Semi-automatic subcriteria sometimes incorporate external inputs, though standard processes favor internal transactions. After setup, testing involves creating sample vendors, posting goods receipts and invoices, then running evaluations to verify score population. In SAP S/4HANA, core steps stay similar, but you activate relevant Fiori apps or use templates to incorporate questionnaires for softer assessments.The entire configuration typically completes in a development system within hours, followed by thorough testing with representative data. Teams frequently reference existing organizational data to accelerate rollout, fine-tuning intervals to match industry patterns.

Running Vendor Evaluations Day to Day

Daily operations use transactions like ME61 to maintain scores for a single vendor. You input the vendor, purchasing organization, and weighting key, and the system suggests automatic scores while allowing manual adjustments for areas like service responsiveness.Batch processing happens through ME63, which evaluates multiple vendors by drawing from information structures and updating relevant tables. In routine monthly cycles, this runs across active vendors in a plant, with results reviewed via ME64 for comparisons or ME65 for ranked lists.For a construction materials vendor, several purchase orders and goods receipts might show delivery delays, resulting in a seventy score there, alongside eighty-five for quality from inspections and ninety for price, yielding an overall eighty-two. Automatic reevaluation settings ensure new transactions refresh scores without repeated manual intervention.In SAP S/4HANA, period-based apps support trend viewing over time, and questionnaire features gather input on aspects like cooperation, which feed into final scores. Maintenance requires regular checks using ME6F to identify underperformers—scores dropping below seventy often lead to source list blocks until performance improves.The scores integrate with source determination, prioritizing higher-rated vendors in automatic purchase order proposals. In retail replenishment, this directs orders toward reliable suppliers first. Corrections involve reversing incorrect postings and rerunning evaluations, with archiving recommended for older records to maintain system efficiency.

How Scores Get Calculated in Detail

The calculation logic relies on defined formulas for automatic subcriteria. On-time delivery uses averaged and smoothed variances between planned and actual dates, normalized to the maximum score for perfect adherence, with deductions configured in point tables.Quantity reliability follows a similar approach, assessing percentage differences between ordered and delivered amounts. Limits determine scoring for over- or under-delivery based on business tolerance.Price level scoring compares a vendor's net price against averages from info records, awarding higher points for lower costs. Price history penalizes frequent changes by tracking volatility over periods.Quality draws from goods receipt inspection outcomes, where accepted quantities raise scores and rejections lower them. Audit results can supplement through manual entries.The overall score computes as the sum of each main criterion score multiplied by its weight, divided by the total weight. Equal weights produce a straightforward average.Smoothing emphasizes more recent data through exponential factors, allowing improving vendors to see gradual score increases. Manual entries apply directly for service aspects like invoice precision, while semi-automatic methods combine system data with overrides.In electronics sourcing, a vendor delivering on time ninety-eight percent of the time, with two percent defects and competitive prices, might reach an overall ninety-five, contrasting with sixty-five for one facing multiple issues.

Using Reports and Analyzing Vendor Performance

Effective use of evaluation data depends on reporting tools. ME65 generates ranked lists by overall score, supporting vendor selection decisions. ME6B provides material-specific views, aiding category management.Logistics Information System (LIS) structures like S011 supply base data for tailored analyses, with transactions like MCVE offering deeper insights. In SAP S/4HANA, embedded analytics deliver visual trends, such as quarterly score charts.Reviewing these outputs informs supplier discussions—presenting a low delivery score encourages corrective actions. Cross-organization comparisons help global teams standardize on top performers.In food distribution, persistently low quality scores prompt targeted audits, reducing recall risks and maintaining supply chain integrity. Regular analysis turns evaluation from a static record into a dynamic tool for continuous improvement.