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 supplier'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 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 suppliers 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.

The On-Time metric tracks the percentage and actual number of supplier 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.

The Quantity metric tracks the percentage and actual number of supplier 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).

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).

The Quality metric tracks the percentage and actual number of supplier 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-supplier 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.