Reviewing Supplier Performance

This chapter provides an overview of supplier performance metrics, lists prerequisites, and discusses how to:

• Define supplier performance targets and tolerances.

• View supplier performance metrics.

See Also

Using PeopleSoft eSupplier Connection Pagelets

Understanding Supplier Performance Metrics

Supplier performance is crucial to your ongoing relationship with your suppliers. Problems (such as poor quality or late delivery) with supplier shipments can lead to additional expense, a breakdown in the relationship, and, ultimately, exclusion of the supplier.

You can provide your employees (and your suppliers) with ongoing performance measurements against various metrics and provide instant feedback (against predefined targets) if there are delivery or quality problems.

You can generate metrics to track a vendor's on-time, quantity, quality, and quantity ordered versus received performance.

This section discusses:

• Supplier metric access.

• On-time metric.

• Quantity metric.

• Quantity ordered versus received metric.

• Quality metric.

Supplier Metric Access

Supplier performance metrics are available to your internal users as a regular PeopleSoft eSupplier Connection feature. Your suppliers can use the supplier performance pagelets to view these metrics for the vendors to whom they have access in a graphical display and navigate to the performance detail pages.

All users can navigate from one metric to another by changing their selections in the Metric field on any performance detail page, provided that their security settings allow access to all of the pages.

See Also

Using PeopleSoft eSupplier Connection Pagelets

On-Time Metric

The On-Time metric tracks the percentage and actual number of vendor shipments that are on time, early, and late for all of the items within a period. You can base your measurements on one of two methods:

• The number of receipts in relation to the schedule date.

  For example, if you expect one shipment of 100 pieces on February 15 but, instead, you receive the following, the calculation would reflect a 75 percent early metric:

  1. Receiver ID 1, 10 items received on February 11.

  2. Receiver ID 2, 10 items received on February 12.

  3. Receiver ID 3, 10 items received on February 13.

  4. Receiver ID 4, 70 items received on February 15.

• The aggregate receipt quantity in relation to the schedule date.

  Using the previous example, this calculation would reflect a 30 percent early metric.

See Also

Defining Supplier Performance Targets and Tolerances

Viewing On-Time Performance Details

Quantity Metric

The Quantity metric tracks the percentage and actual number of vendor shipments (receipts) with correct quantities, over-shipment quantities, and under-shipment quantities by period.

Using the previous example for on-time metrics, the calculation would reflect a 75 percent under metric (three of four receipts were less than the correct scheduled quantity).

See Also

Viewing Quantity Performance Details

Quantity Ordered Versus Received Metric

The PO/Received Quantity (purchase order/received quantity) metric tracks the percentage and actual quantity of the receipts against purchase order (PO) quantity by period.

Using the previous example, the calculation would reflect a 100 percent received metric (100 were scheduled, and 100 were received, regardless of the number of receipts).

See Also

Viewing PO Versus Receipt Performance

Quality Metric

The Quality metric tracks the percentage and actual number of vendor shipment quantities that are inspected, accepted, rejected, and returned by period.

The system calculates a percentage rejected and a percentage returned as part of the quality performance metric. This calculation uses only return-to-vendor records that have a receiver ID and ignores canceled receipts.

You can exempt (or include) certain receiving reject or return reason codes from the percentage of defectives that your supplier performance metrics reflect.

For example, you may not want to use incomplete shipments as a performance measurement for product quality. You can use the Return/Reject Reasons page to remove the Include in Quality Metric flag from that particular reason code.

See Also

Viewing Quality Performance Details

Defining Procurement Options

Prerequisites

Before the system can calculate performance metrics, you must:

1. Build a calendar using the Calendar Builder page in the Common Definitions menu.

2. Set up a procurement analysis reporting entity using the Define Procurement Controls page in the Analyze Procurement menu.

   In particular, you must:

   1. Select the Include Receiver Data and Include PO Data check boxes.

   2. Enter at least one receiving and one purchasing business unit.

      Note. Your business unit selections must include all of the business units that contain the data that you want your suppliers to view. The metrics that appear to suppliers are related only to the reporting entity that you attach to the PeopleSoft eSupplier Performance setup record.

3. Define system targets and tolerances for the reporting entity.

4. (Optional) Define vendor-specific targets and tolerances for the setID.

5. Run the Procurement History Update process (FS_PRCRUPD).

See Also

Defining Financials and Supply Chain Management Common Definitions

Configuring Procurement Analysis Inquiries

Generating Procurement History

Defining Supplier Performance Targets and Tolerances

To define supplier performance targets and tolerance levels, use the Supplier Performance Setup component (WV_PE_METRIC_SETUP). To vendor supplier performance targets and tolerance levels, use the Supplier Performance Vendor component (WV_PE_METRIC_VNDR).

You can define how the system derives and displays supplier performance metrics by setting performance targets and tolerances.

This section provides an overview of metric display and discusses how to:

• Define system targets and tolerances.

• Define vendor-specific targets and tolerances.

Understanding Metric Display

This section discusses the appearance of the charts that display supplier metrics.

Graph Colors

The target and tolerance percentages that you enter on the metrics setup pages determine certain performance graph bar colors. Values that are:

• Equal to or greater than the target percentage are green (acceptable).

• Less than the target percentage but greater than the target percentage minus the tolerance percentage are yellow (warning).

• Less than this difference between the target percentage and the tolerance percentage are red (unacceptable).

Performance graph bars can also represent particular metric values; for example, the percentage of early shipments is expressed in blue on the On-Time Performance graph.

We use a PeopleTools 2D Bar chart type.

See Enterprise PeopleTools PeopleBook: PeopleCode Language Reference

Metrics

The system displays metrics against a specific target and tolerance for a particular vendor within a reporting entity if you define targets and tolerances on the Supplier Performance Vendor page. Otherwise, the system uses the general system-level targets and tolerances, which you define on the Supplier Performance Setup page.

Periods

The data (percentages) that appear are an aggregation of the items and units of measure for which receipts have been made. For each period shown, the user must navigate to view the underlying data that supports the chart.

The number of periods that appear is determined at the system level. The periods that appear in the performance detail pages (and their associated supplier pagelets) are based on the date ranges that the calendar ID that is associated with the reporting entity ID in PeopleSoft Purchasing defines.

See Defining Reporting Entities.

Pages Used to Define Supplier Performance Targets and Tolerances

Defining System Targets and Tolerances

Access the Supplier Performance Setup page (Set Up Financials/Supply Chain, Product Related, Procurement Options, Purchasing, Supplier Performance Setup).

To set up system targets and tolerances for the reporting entity:

1. Determine the reporting entity:

   Reporting Entity ID

   Select to establish system targets and tolerances for this reporting entity. Define reporting entities on the Define Procurement Controls page in PeopleSoft Purchasing. See Defining Reporting Entities.

2. Establish performance targets and tolerances (these metrics are expressed in percentages):

   On-Time Performance Target	The optimal percentage of on-time deliveries (quantity or receipts) for the given period. See Viewing On-Time Performance Details.
   Quantity Performance Target	The optimal percentage of correct shipments in terms of quantity received versus scheduled quantity for the given period. See Viewing Quantity Performance Details.
   Quality Performance Target	The optimal percentage of receipts that are received without being rejected due to quality for the given period. See Viewing Quality Performance Details.
   PO/Receipt Qty Perf. Target (purchase order/receipt quantity performance target)	The optimal percentage of ordered versus received quantities for the given period. See Viewing PO Versus Receipt Performance.

3. Set the chart and grid settings:

   Number of Periods to Display	The number of periods that you want to appear in the graphical charts. The calendar definition determines a period's length.
   Max Rows to Return (maximum rows to return)	The maximum number of rows that the system retrieves when the supplier selects detail for a period. This limits how much data the system retrieves to conserve web server resources.

4. Select early and late metric display settings.

   You can calculate early and late metrics in one of two ways:

   Early/Late Metrics by Receipts	Bases the metric on the total number of receipts in relation to the schedule date. You may prefer this method when you want to measure timing of shipments regardless of quantity.
   Early/Late Metrics by Quantity	Bases the metric on the aggregated receipt quantity in relation to the schedule date. You may prefer this method when you typically have several receipts for a given PO schedule line (versus the metric based on receipt count only). See Understanding Supplier Performance Metrics.

Defining Vendor-Specific Targets and Tolerances

Access the Supplier Performance Vendor page (Set Up Financials/Supply Chain, Product Related, Procurement Options, Purchasing, Supplier Performance Vendor).

This page is nearly identical to the Supplier Performance Setup page with the exception that you are defining values for a specific vendor in a SetID rather than system-wide reporting entity values.

Viewing Supplier Performance Metrics

Your employees and your suppliers can access the supplier performance detail pages.

This section provides an overview of viewing supplier performance metrics, lists common elements, and discusses how to:

• View on-time performance details.

• View quantity performance details.

• View quality performance details.

• View PO versus receipt performance.

Understanding Viewing Supplier Performance Metrics

The internal-facing versions of the supplier performance detail pages are identical to the external-facing versions, with one exception: internal-facing pages include a SetID field with which internal users can access all vendors that are associated with the setID. However, vendors who use the external-facing pages can access only the vendors to whom you have granted them access. Vendors don't have access to the internal-facing detail pages.

Common Elements Used in This Section

Pages Used to View Supplier Performance Metrics

Viewing On-Time Performance Details

Access the View Vendor Shipment Performance - On-Time Performance page (internal users - Purchasing, Analyze Procurement, Review Supplier Performance; external users - click the Detail link on the appropriate pagelet).

The system displays on-time performance summary information. This table displays the equations that the system uses to derive this page's metric fields:

See Also

Viewing On-Time Performance Details

Common Elements Used in This Section

Viewing Quantity Performance Details

Access the View Vendor Shipment Performance - Quantity Performance detail page (internal users - Purchasing, Analyze Procurement, Review Supplier Performance; external users - click the Detail link on the appropriate pagelet).

The system displays quantity performance summary information. This table displays the equations that the system uses to derive this page's metric fields:

See Also

Viewing Quantity Performance Details

Common Elements Used in This Section

Viewing Quality Performance Details

Access the View Vendor Shipment Performance - Quality Performance page (internal users - Purchasing, Analyze Procurement, Review Supplier Performance; external users - click the Detail link on the appropriate pagelet).

The system displays quality performance summary information. This table displays the equations that the system uses to derive this page's metric fields:

Note. You can control at the setID level which return or reject reason codes are included in these equations.

See Also

Viewing Quality Performance Details

Common Elements Used in This Section

Viewing PO Versus Receipt Performance

Access the View Vendor Shipment Performance - PO/Receipt Quantity Performance Detail page (internal users - Purchasing, Analyze Procurement, Review Supplier Performance; external users - click the Detail link on the appropriate pagelet).

The system displays quantity performance summary information based on the difference between the PO schedule quantities and the actual receipt quantities. This table displays the equations that the system uses to derive this page's metric fields:

See Also

Viewing PO Versus Receipt Performance

Common Elements Used in This Section