Parts per million report for Buyer for getting insights on Supplier performance in SAP S/4HANA
With this blog I would like to introduce the report in the S/4 HANA Sourcing and procurement area for viewing the number of defective or rejected materials per million for a specific supplier. The App name is Parts per million for Buyer. And it is incorporated in the scope item 1JI (Real-Time Reporting and Monitoring for Procurement).
This helps the strategic buyer to analyze performance of a supplier. You can select the supplier with lower PPM value for your future deals. You could analyze in real-time the parts per million score to discuss with the suppliers the potential activities to improve quality.
This app is accessible for Strategic Buyers. The required Business catalog : SAP_PRC_BC_PURCH_ANALYTICS and Business Role : SAP_BR_BUYER
- Real-time calculation of parts per million score by various dimensions, e.g. supplier, material group, purchasing organizations or plant.
- Calculate number of items received against number of items returned.
- Calculate number of items received against number of items for which quality notifications are created.
- Navigate to respective documents from key performance indicators.
- Use various chart options for display
- Drill down: Display the details by different dimensions using View By option
The KPI is displayed in the following views:
Ø By Supplier
Ø By Purchasing Category
Ø By Purchasing Group
Ø By Purchasing Organization
Ø By Material Group
Ø By Plant
Ø Document: You can see the following additional attributes in the document view:
o Qty in Order Unit: Displays the total number of received items.
o Complaint Quantity: Displays the quantity of the defective or rejected items registered under the quality notification in order unit.
Ø Trend by Supplier
Ø Trend by Purchasing Category
Details on Calculation
The number of defective or rejected items is calculated based on one the following:
Number of Return Deliveries: The number of defective or rejected items is calculated based on the material document
Number of Quality Notifications: The number of defective or rejected items is calculated based on the field complaint quantity
Suppose you order a material with quantity 1,000. Out of these, if 100 were defective, the Parts Per Million (PPM) app calculates and tells you the number of defective or rejected materials per million (1,000,000). In this case the PPM value is calculated as follows:
= [(Number of defective or rejected items) / (Total number of received items)] * 1,000,000
= [100/1000] * 1,000,000