1 Isaac Mazliach S.D.M. Consulting Real-World Techniques to Tighten Purchasing Controls and Ensure the Quality of Incoming GoodsIsaac MazliachS.D.M. Consulting
2 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
3 Why Use SAP QM?PurposeWith the functions of this component, you can implement the most important elements of a quality management systemIntegrationThe integration of the QM application component in the SAP system allows quality management tasks to be combined with those in other applications (such as Materials Management, Production Planning, Sales and Distribution, and Cost Accounting)BenefitsDo I need to convince you of this?
4 QM Features — GeneralThe QM application component supports tasks associated with quality planning, quality inspection and quality control. In addition, it controls the creation of quality certificates and manages problems with the help of quality notifications.The following components are available in QM:Basic data (for example, Material Master, catalogs, inspection characteristics, inspection methods, and sampling procedures)Inspection planning (inspection plans, reference operation sets, and material specifications)QM in procurementQM in sales and distributionInspection lot processing (inspection lot creation and inspection lot completion)
5 QM Features — General (cont.) The following components are available in QM (cont.)Results recordingDefects recordingSample managementQuality Information SystemDynamic modification of the inspection scopeQuality certificatesQuality notificationsTest equipment management
6 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
7 Customizing Settings for QM in Procurement The following slides identify settings that can be made in the Customizing application in order to use the quality management functions in procurement
8 Keys for Certificate Processing Keys are defined for processing quality certificates and are stored in the Material Master record. These keys stipulate that a certificate be requested from the vendor for every Purchase Order item. The keys can also be used to determine:Whether the system checks that a certificate has already been received for the Purchase Order item during Goods ReceiptWhether a certificate must be provided for a Purchase Order item with every Goods ReceiptThe notification type generated by the system if the required certificate is not present
9 Keys for Certificate Processing (cont.) Keys are defined in the Customizing application for blocking supply relationships. Depending on whether the block applies to all, or only some, of the materials from a vendor, a blocking key is stored in the Vendor Master or in the Q-info record for the "material * vendor" combination.The key controls blocking of the following transactions:Request for quotationPurchase OrderGoods Receipt
10 Document Types There are two types of system support for exchanging Q documents with vendors:Technical delivery terms (document type Q02)Quality assurance agreements (document type Q01)These documents are used during procurement operations (for requests for quotation and Purchase Orders, that is), and are sent to the vendorThe standard SAP system contains fixed settings for these document types, such as:Changes to a document cause a new version to be created in the systemThe status sequence of the document is suitably defined
11 QM SystemsVerification requirements with regard to the QM system of the vendor are definedYou store the actual QM system in the Vendor Master record at the client level or in the Q-info record for the material-vendor combination at the plant levelIn procurement (request for quotation and Purchase Order), the system checks whether the vendor’s QM system meets the specified requirements for the material or material group that is to be purchased
12 Status of the Supply Relationships Status profiles are defined for the supply relationships. An inspection type is assigned to each status contained in the profile.You can stipulate that deliveries of materials from a vendor must pass through several statuses. For example:Model seriesPreliminary series deliveryProduction series deliveryThese statuses can be assigned different inspection types with corresponding plan usages. The system will then select inspection plans to match the status of the supply relationship.
13 Other Customization Settings Maintain QM Standard Setting CatalogsQCCK – The purpose of this activity is to copy entries for QM standard settings for catalogs from client 000 to the installation clientMaintain QM Standard Setting Quality NotificationsQCCM – The purpose of this activity is to copy entries for QM Standard Settings for Quality Notifications from client 000 to the installation clientMaintain Settings at Plant LevelSPRO – Quality Management Basic Settings Maintain Setting at Plant Level: Plant-Dependent QM Setting
14 Other Customization Settings (cont.) Define Catalog ProfileThe purpose of this activity is to define a catalog profile and to assign the permitted code groups to that catalog profileIMG Quality Management Quality Notifications Notification Creation Notification Content Define Catalog ProfileDefine Action BoxThe purpose of this activity is to define additional functions (activities) that can be performed during the processing of a notification:IMG Quality Management Quality Notifications Notification Processing Additional Notification Functions Define Action Box
15 Inspection Lot Creation: Purpose In the Quality Management (QM) component, you process quality inspections on the basis of inspection lots.If you want to inspect a specific quantity of a material or a piece of equipment, an inspection lot must be created in the systemThe documentation describes how inspection lots are created automatically or manually, and how you use the inspection lots to process different types of inspectionsOnce an inspection lot has been created, you can inspect the goods, record the inspection results or defects, and complete the inspection with a usage decision
16 Inspection Lot Creation: Implementation Considerations You should implement the Inspection Lot Creation component if you want to create inspection lots in the system. You must also implement the following additional QM components to be able to plan, process, and complete the inspections:Basic Data (QM-PT-BD)Inspection Planning (QM-PT-IP)Results Recording (QM-IM-RR)Defects Recording (QM-IM-RR-DEF)Inspection Lot Completion (QM-IM-UD)
17 Inspection Lot Creation: Integration You must also implement the following component in the logistics supply chain: Materials Management (MM)Manage materials and material stocks in the system and process inspections for goods movements
18 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
19 Master Data Enhance Material Master (QM View): The purpose of this activity is to maintain the Material Master using the quality management view:Logistics Materials Management Material Master Material Change Immediately (MM02):The table on the right demonstrates some of the fields available for entry/useFieldValuesInspection Type01PreferredInsTypInspection Type ActivePost to Inspection StockblankInspection for Handling UnitInsp. with mat spec.Insp. with task listInsp. by configurationAutomatic assignment
21 Quality Information Record If a quality assurance agreement or a vendor release is required for a material, you must create a Quality Information Record (QIR). The QIR determines how the material can be processed further.
22 Quality Information Record (cont.) When a quotation or Purchase Order is created, the system checks whether a QIR is required and is available for the combination of material and vendorThe system also checks whether the vendor and material-vendor combination is blocked or released for quotations, Purchase Orders, and/or Goods Receipts. The execution of this check depends on the setting of the QM in Procurement control key in the Material Master.The QIR displays a vendor block specified in the Vendor Master, the vendor's QM system, and the lock dateYou can also specify a status profile for releasing the supply relationship and the QM system of the material-vendor combination in the QIR. You can also decide whether you want to deactivate the Goods Receipt inspection or perform a Goods Receipt inspection and/or source inspection.2222
23 CharacteristicsThe design of different inspections per material etc. is configured using the characteristics technique:Create master Inspection characteristics (Plant level)Create Inspection Plan (Material+Plant level)Add Operations to the Inspection PlanAssign the Master Inspection Plan to each operation
27 Assign the Master Inspection Plan to Each Operation
28 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
29 Inspection at the Vendor’s Site: General Source inspections are performed upon request and with the participation of the customer or sold-to party. A source inspection can be performed by the receiver of the service, the vendor in the presence of the receiver, or by a person or third party (for example, a surveyor) appointed by the receiver.Inspection lots for source inspections that reference a purchasing document can be created with or without specifying a (vendor) batch. (Set the Inspect Without Batch indicator in the worklist for source inspections).If the inspection lot for the source inspection is rejected for a Goods Receipt item, the Customizing settings for the QM in the procurement control key determine whether:A Goods Receipt posting is not possible orA quality notification is not created and a new inspection lot is created
30 Triggering of Source Inspections When the system generates a worklist for source inspections, it only considers materials and vendors for which:Quality information records exist (these records specify a source inspection as the inspection type)The inspection type has been defined and activated in the Material Master recordYou can manually generate a list of materials that are defined for a source inspection
31 Triggering Source Inspections Manually Choose: Logistics Quality management ª Quality inspection ª Worklist ª Inspection lot creation ª Source inspection ª Trigger manuallyThe system creates a list of materials that are defined for a source inspectionOptions:Create an inspection lot for an item in the listDisplay the scheduling agreement (Purchase Order) for a materialDisplay the quality information record for a material
32 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
33 Vendor ReleaseThe quality department releases a vendor for a certain material. It can also restrict the release to a certain period of time or a certain quantity. If the vendor has serious quality problems, the Quality System can safeguard against this by blocking requests for Quotations, Purchase Orders, or Goods Receipts for certain materials from that vendor.
34 Inspection Skip for Certified Vendors Vendors that have certified QM systems in use may be able to maintain a higher product quality than those without QM systems. In Customizing for QM in Procurement, you can waive the requirement for Goods Receipt inspections when goods are delivered from vendors who have certified QM systems in use. If you waive the inspection requirement:The system does not create an inspection lot when goods are procured from these vendorsThe goods are posted directly to unrestricted-use stock when they are receivedIn Customizing for QM in Procurement (Define QM systems), you must set the indicator Certified QM System for the QM system that is presently in use
35 Inspection Skip for Certified Vendors (cont.) If you want to define a QM system and be able to control inspection skips, you must maintain various master records:You define the requirements for a vendor's QM system in the Material Master recordYou specify the vendor's QM system (which is identified in Customizing as a certified system) in the Vendor Master record or the quality info recordIn the quality info record, you can override an inspection skip that has been defined in Customizing. For example, if you want to force inspections for a certain combination of material, vendor, and plant, you can specify this in the corresponding quality info record.
36 Quality Certificate for Goods Receipt When you procure goods from a vendor, you can request that the vendor submit a quality certificate with the shipment of goods (in addition to meeting the requirements specified in the technical delivery terms and quality assurance agreement). If you request a quality certificate:You can monitor the receipt of the certificate independently of the Goods Receipt posting …Regardless of whether an inspection lot is created or not. The certificate can be filed in the optical archive. If a certificate is yet to be delivered, a reminder can be created automatically.
38 Electronic Certificate Receipt of a Quality Certificate for Delivery
39 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
40 GeneralThe Vendor Evaluation belongs primarily to the purchasing area. Its functionality and the relevant customizing can therefore be found in the SAP purchasing component.The QM component contributes to the calculation of the criterion “Quality”The Quality criterion contains the automatically valuated subcriteria:Goods ReceiptAuditComplaints
41 Goods Receipt (GR)The Goods Receipt score is calculated from the quality score (QSc) for the inspection lots, according to the following formula:QSc = (S1 + S2) / (n1 + n2), where:S1 = Sum of quality scores for the inspection lots n1 = Number of inspection lots n2 = Number of deliveries for materials with a quality information record, for which no inspection lots existQScmax = highest value of Quality scores, and S2 = n2 * QScmaxYou can break down the GR score for the vendor according to the material and the inspection type
42 AuditThe audit score is either the average quality score for the audits or is made up of the quality scores for the most recent auditsYou can also enter an audit score manually
43 ComplaintsThe complaints score is calculated from the number of complaints against the vendor, according to the following formula:QSc = QScmin + (QScmax - QScmin) * (1 - (N * K) / (F * U)) QSc = QScmin if (N * K) > (F * U)where:QScmin = Lower limit for QSc QScmax = Upper limit for QSc N = Number of Q-notifications in the applicability period K = Estimated nonconformity costs F = Share of business volume for QSc calculation U = Sales of the vendor in the applicability period
44 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
45 Audit UsageYou can use Audit Management for a variety of purposes — to perform quality audits or environmental audits, for example. In general terms, you can apply Audit Management to any usage involving the valuation and appraisal of material or intangible items on the basis of a question list.
46 Audit TypeYou specify an audit usage (for example, quality audit) and an audit category (for example, system audit, process audit, or product audit) to provide a closer definition of the audit type. Note: The audit usages are defined in a Customizing table. The audit categories are predefined in the system. These specifications only serve to differentiate between audit types. They have no controlling effect.
47 New Functionality in SAP ERP Creation of corrective actions:You can use a BAdI to create a business object, such as a quality notification, for a corrective actionBetter integration Document Management System (DMS), e.g., viewing Document Information Record (DIR) data as thumbnails in the Audit documentBetter integration of DMS with Knowledge Management (KM) in SAP NetWeaver® Portal
48 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
49 Sample Management (Enhanced) As of SAP ECC 5.0 the following fields were added to the master record of physical samples:Sampling LocationSampling Location InformationProcessorDate of Sample DrawingTime of Sample DrawingYou can select according to these and other fields using the worklists for results recording transactions QE52 and QE51N. You can also select according to the sample status.
50 Communication with Quality Inspection Engines As of SAP ERP 6.0, SAP_APPL 600, you can use Customizing to control the communication between SAP or other quality management systems and the Quality Inspection Engine (QIE)The QIE allows you to perform quality inspections when using a combination of different SAP solutions or even non-SAP applicationsThe QIE is service-oriented, and therefore supports new processes; for example, inspections can be performed if you are using decentralized Warehouse Management in SAP Supply Chain Management (SAP SCM)If required, the QIE can transfer inspection requests to Quality Management (QM) in SAP ERP. This allows you to use additional functions, such as characteristic-based results recording.
51 Communication with Quality Inspection Engines (cont.) You make the settings in Customizing for QM in the following IMG activities:Assign PropertiesBAdI: Creation of Inspection Lots for Externally Triggered InspectionBAdI: Change of Inspection Lots for Externally Triggered InspectionBAdI: Copying of Inspection Decisions for Externally Triggered InspectionActivate Event Type Linkage for Confirmations
52 Structure Changes to the Quality Management IMG As of SAP ERP 6.0, SAP_APPL 600, the structure of the Implementation Guide (IMG) for Quality Management has changedTo copy these changes to project IMGs, you must regenerate the project IMGs
53 New IMG ActivitiesArea Quality Planning Inspection Planning General Multiple Specifications: All IMG activities in this area are new.Area Quality Inspection Results Recording Make Settings for Operation CompletionArea Quality Control Define View Implementations for Evaluations of Original DocumentsDefine Data Definition for Evaluations of Original DocumentsDefine View Types for Evaluations of Original DocumentsDefine Graphic Types for Evaluations of Original Documents
54 New IMG Activities (cont.) Area Environment Tools Business Add-Ins Quality Inspection BAdI for Aggregation when Evaluating Original DocumentsBAdI for Definition of Views for Evaluations of Original DocumentsMultiple Specifications: Valuations of ObjectsDefine Object Names for Multiple SpecificationsArea Environment Tools Communication with Quality Inspection Engines: All IMG activities in this area are new.
55 Multiple Specifications As of SAP ERP 6.0, SAP_APPL 600, new functions for processing multiple specifications are available in the QM application componentWhen you are deciding how to use a material or batch you sometimes require additional information about the suitability or admissibility of the product (for example, because of customer-specific or country-specific requirements, or requirements specified by pharmacopoeia). In the SAP system, you can define such criteria in inspection plans using multiple specifications, based on various objects such as country, customer, pharmacopoeia, and so on.
56 Multiple Specifications (cont.) You use the multiple specifications to determine the suitability of a batch based on particular specifications. The overall valuation of a batch for each object tells you whether or not the batch can be delivered to a specific customer or used under certain conditions. The use of multiple specifications influences all inspection processing activities in Quality Management (QM), from inspection planning through to certificate creation.
57 Multiple Specifications (cont.) With the new functions, you can:Maintain multiple specifications using the Engineering Workbench (EWB)Call up and display multiple specifications for information purposes throughout the entire inspection process in QMUse multiple specifications as the basis for the valuation of characteristics in results recordingUse multiple specifications in the usage decision for the overall valuation of a product for a country, customer, or pharmacopoeiaUse multiple specifications to represent the suitability when valuating an inspected batch using the batch classificationConsider multiple specifications when creating quality certificatesOutput multiple specifications in inspection reports
58 What We’ll Cover … Why use SAP Quality Management (QM)? Setting up QM in PurchasingMaster data neededInspection at the vendor’s siteInspection at Goods ReceiptIntegrating inspection results with Vendor EvaluationThe use of Audit ManagementWhat’s new in SAP ERP?Wrap-up
59 Resources http://help.sap.com Quality management; quality management in PurchasingIMG helpFollow SPRO Quality management PlanningAudit management release notes (SAP ERP 2005 ECC 6.0): https://websmp201.sap-ag.de/releasenotes *Quality management release notes (SAP ERP 2004 ECC 5.0 and SAP ERP 2005 ECC 6.0): https://websmp201.sap-ag.de/releasenotes ** Requires login credentials to the SAP Service Marketplace
60 7 Key Points to Take HomeSAP QM can be used to inspect the received goods from suppliers to support information gatheringIntegrating QM and Vendor Evaluation may result in better supplier selectionIntegrating QM and SRM allows the introduction of surveys — but then we need to create BW cubes to support itSource inspection should be used as often as possible to reduce transportation waste
61 7 Key Points to Take Home (cont.) Inspection at Goods Receipt can be performed on the total quantity or on a specific sample. The results are entered using a single transaction that can be used to enter the inspection results and also return the goods to the supplier or move the goods from QM stock to standard stock, etc.Integrating QM and Audit Management may allow more information to be captured on the performance of each supplierSAP provides interfaces to different QM systems and their integration with SAP ERP
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