Vendor Evaluation Feature in Dynamics 365 Finance and Operations
Dynamics 365 Finance & Operations allows you to configure your own Vendor Evaluation Criteria and then track the vendor performance against any or all the criteria that you have defined. Finaally you can search right vendor for RFQ or Purchase Order by Vendor Evaluation Criteria.
In this worked example we will show how to configure the Vendor Evaluations groups and criteria and how you can record evaluation results against vendors.
1. Creating Vendor Evaluation Criteria Groups
The first step in configuring the Vendor Ratings within Dynamics 365 Finance and Operations is to create some Vendor Evaluation Criteria Groups. These will be used to group common sets of evaluation criteria together and allow you to get summary results on the evaluations at the criteria group level.
Sample Data of Vendor Evaluation Criteria Groups:
| Name | Description |
| OVERALL | Overall Evaluation Criteria |
| SERVICE | Service Evaluation |
| PRICING | Pricing Criteria |
| DELIVERY | Delivery Performance |
| QUALITY | Quality Ratings |
2. Creating Vendor Evaluation Criteria
Once you have set up your Vendor Evaluation Criteria Groups, you will need to set up some Vendor Evaluation Criteria codes that you will use to rate your vendors.
Sample Data of Vendor Evaluation Criteria:
| Name | Description | Vendor evaluation criterion group |
| Consistency | Supplier’s ability to exhibit quality and reliability | OVERALL |
| Cost | Total acquisition cost, not just price | OVERALL |
| Cash resources | Financial resources and stability of the supplier. Profit | OVERALL |
| Control | Effective management control and information systems | OVERALL |
| Commitment | Supplier’s willingness to commit physical, intellectual | OVERALL |
| Capacity | Supplier’s ability to meet physical, intellectual | OVERALL |
| Competency | Managerial, technical, administrative, and professional | OVERALL |
| Problem resolution | The vendor should respond in a timely manner to resolve | SERVICE |
| Emergency support | Does the vendor provide emergency support for repair | SERVICE |
| Good vendor representatives have sincere desire to serve | Vendor reps display courteous and professional approach, and | SERVICE |
| Emergency delivery | Does the vendor demonstrate extra effort to meet requirement | DELIVERY |
| Documentation | Does the vendor furnish proper documents | DELIVERY |
| Packaging | Packaging should be sturdy, suitable, properly marked | DELIVERY |
| Lead time | Is the average time for delivery comparable to that of other | DELIVERY |
| Quantity | Does the vendor deliver the correct items or services | DELIVERY |
| Technical support | Does the vendor provide technical support for maintenance | SERVICE |
| Inside sales | Inside sales should display knowledge of buying firms needs | SERVICE |
| Time | Does the vendor deliver products and services on time | DELIVERY |
| State-of-the-art product/service | Does the vendor offer products and services that are consist | QUALITY |
| Warranty | The length and provisions of warranty protection offered | QUALITY |
| Support | Is quality support available from the vendor? | QUALITY |
| Durability | Is the time until replacement is necessary reasonable? | QUALITY |
| Reliability of repairs | Is all repair and rework acceptable? | QUALITY |
| Reliability | Is the rate of product failure within reasonable limits? | QUALITY |
| Conformity to specifications | The product or service must conform to the specifications id | QUALITY |
| Compliance with purchase order | The vendor should comply with terms and conditions as stated | QUALITY |
| Billing | Are vendor invoices are accurate? | PRICING |
| Advance notice of price changes | The vendor should provide adequate advance notice of price | PRICING |
| Price accuracy | There should be a low number of variances from PO’s | PRICING |
| Sensitive to costs | The vendor should demonstrate respect for the customer firm | PRICING |
| Price stability | Prices should be reasonably stable over time | PRICING |
| Competitive pricing | The prices paid should be comparable to those of vendors. | PRICING |
3. Configuring Vendors for Evaluation
The final step in the setup process is to link the Evaluation Criteria with the Vendors within Dynamics 365 Finance and Operations. This is done through the Procurement Categories.
4. Recording Vendor Evaluations
Once the evaluation criteria have been configured, you can start recording the vendor ratings.
Thanks and Enjoy!
