Vendor is one of the most important clog in the current ecosystem of business and an efficient vendor has the potential to add tremendous value to the supply chain system. With this comes the need to carefully hand pick the vendors for one's business. Dynamics AX as an ERP system helps the user in this regard by providing a method to evaluate the vendors associated with business. The article explains how a quantitative assessment based on multiple user defined evaluation criteria can be used to arrive at a strategic decision to decide on the best suited vendor for the business.

1. Vendor Evaluation by configuring Vendor
Ratings and Vendor Scorecard:
Create Vendor Evaluation Criteria Groups
Agenda
Vendor Evaluation by configuring Vendor Ratings and Vendor Scorecard:
Organizing the procurement becomes easier if the business can have a bird’s eye view of preferred ven-
dors, according to the ratings for their services. Dynamics AX allows to configure the vendor evaluation and
then monitor and track vendor performance against the criteria defined.
Creating Vendor Evaluation Criteria Group
To begin we will start with the creation of vendor evaluation criteria groups. These groups will
house common sets of evaluation criteria together. It will allow getting a summary result on the
evaluations.
Key Take-Away
At the end of this session you will be able to
Process:
Create Vendor Evaluation Criteria
Configure Vendors for evaluation
Record Vendor Evaluations manually
AX Version:
Dynamics AX 2012 R3 CU8
Module Covered:
Procurement and Sourcing

2. Go to Procurement and sourcing > Setup > Vendors > Vendor evaluation criterion groups.1
Close the form after creating the desired group names
Create Vendor Evaluation Criteria
Once the Vendor Evaluation Criteria Groups is set, we will need to set up some Vendor Evaluation Criteria
codes which will be used to evaluate the vendors. It determines a vendor can be used or not based on the
specified criteria.
1
2
Click New and enter a name for the group and enter a description of the group
Click Procurement and sourcing > Setup > Vendors > Vendor evaluation criteria.

3. Click new and enter a unique name for the criterion and enter a description of the criterion2
1
3
Select a vendor evaluation criterion group from the dropdown.
This is the same Vendor Evaluation Criteria Group which was created in the previous step
Configure Vendors for evaluation
This is the final setup which involves assigning the evaluation criteria with the vendors.
Click Procurement and sourcing > Setup > Categories > Procurement categories.

4. Select a procurement category from the procurement hierarchy and click vendor evaluation
criterion groups Fast Tab.
2
Add the required criteria groups from the available list3
Add the required criteria groups from the available list4

5. Click on the Vendors Fast Tab5
Click on Add to associate the vendors for the evaluation.6
All the requisite vendors are now associated with the procurement category. Click close to exit
from this form.
7

6. Record Vendor Evaluations manually
After setting up the criteria, the vendor evaluation can be recorded.
Click Procurement and sourcing > Setup > Categories > Procurement categories
Expand the Vendors tab, select the Vendors and click on the Evaluation button in the menu bar.
1
The Rating on vendor criteria form will be opened with all the Evaluation Criteria Groups listed
on the left and the corresponding Evaluation Criteria for that group on the right.
2

7. The individual Evaluation Criteria rating can be selected from the dropdown.3
After entering ratings for all the criteria, the average rating for the Vendor Evaluation criterion
group is calculated automatically.
4

8. The same rating can be found out for all the Vendor Evaluation Criterion Group. These ratings can
be used to select a vendor before placing an order.
5
Disclaimer: Pushing ratings automatically to the rating system is currently not available out-of-box.
ATUL
An engineer and a business management graduate by profession, Atul, has the experience in working for multiple
companies in the manufacturing and services sector for the past 6 years. He likes to spend his leisure time in reading
fiction and writing. Atul is currently working as a Dynamics AX functional consultant at Sonata Software Ltd.
ABOUT AUTHOR