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QM in ProcurementOverview

H88: Quality Management in Procurement

Scenario Overview

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Quality Management in ProcurementOverview

Quality management for the goods inbound process

Two sub-scenarios to cover both goods rejection and goods

acceptance

Linkage of quality certificate and material in quality info record

Including most of the technical objects for quality management,such as quality certificate, a complex inspection method, qualitynotification and vendor quality assessment

Vendor re-evaluation on a future good receipt date to show scorechanges on quality and delivery criteria

General QM evaluations

This scenario deals with quality inspection activities in theprocurement process, in which a customer orders goods from aspecified vendor and inspects them on receipt.

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Business Benefits Customer Supplier / Manufacturer Vendor Business Benefits

The purchasingdepartment orders

goods from a specifiedvendor.

A quality certificate ismandatory in thescenario. Thiscertificate is adocument receivedfrom the vendor.

The QualityManagementdepartment inspectsthe goods accordingto the qualityinspection plan (resultrecording). Allinspection results aredocumented in theinspection lot.

At the goods receipt,the material is posted

to quality inspectionstock. The systemcreates an inspectionlot automatically.

Create purchase order

Deliver goods

Create inbound delivery

Record quality certificate insystem

Process goods receipt

Create purchase requisition

Quality inspection /

Result Recording

Quality Management in ProcurementBusiness View Rejection Process

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Business Benefits Customer Vendor Business Benefits

In case the materialdoes not meet thestandards it will berejected during theusage decision.

To track quality issuesa quality notification iscreated. The vendor isinformed about therejection.

The goods issue isposted and thematerial is sent backto the vendor.

The transfer to theblocked stock restrictsthe material usage.

Once the material hasbeen rejected thedelivery is created toreturn the material to

vendor. A customernumber is assigned tothe vendor as a returncustomer.

During the vendorevaluation the qualityscore for the vendor ischanged automatically.

Usage decision /

Transfer to blocked stock

Create quality notification

Create return delivery

Post goods issue

Complete notification

Vendor evaluation

Supplier / Manufacturer

Quality Management in ProcurementBusiness View Rejection Process

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The vendor providesthe manufacturer witha new delivery of thematerial in a futuredate.

At the goods receipt,the material is postedto quality inspectionstock. The systemcreates an inspectionlot automatically and aquality certificate isgeneratedautomatically.

The material meetsthe quality standardsand will be acceptedduring usage decision.The transfer tounrestricted use stockmakes the material

available forproduction.

The QualityManagementdepartment inspectsthe goods accordingto the qualityinspection plan (result

recording). Allinspection results aredocumented in theinspection lot.

The purchasingdepartment carries outthe invoice verificationto post the invoice to

accounting.

Finally, you reevaluatethe vendor. Scorechanges againstdelivery and qualitywill be shown in thesystem.

Subsequent delivery

of material

Process goods receipt

Quality inspection

Usage decision / Transferto unrestricted use

Invoice verification

Vendor re-evaluation

Quality Management in ProcurementBusiness View Acceptance Process

Business Benefits Customer Supplier / Manufacturer Vendor Business Benefits

Allgemeine QM-Auswertungen

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Supplier/ManufacturerCustomer

Send goods

Re-send goods in future date

Quality certificate recording

Goods receipt to quality inspection stock andautomatic generation of inspection lot

Determination of inspection lot and inspection results recording

Change of status of quality certificate

Usage decision and material transfer to blocked stock

Creation of the quality notification

Return delivery from blocked stock

Completion of the quality notification

Vendor evaluation

Goods receipt in future date

Determination of inspection lot, inspection results recording

Change of status of quality certificate

Usage decision and material transfer to unrestricted stock

Invoice verification for the goods received

Vendor re-evaluation

Purchase requisition and purchase order processing

Inbound delivery based on the purchase order

Quality Management in ProcurementComponent Overview

QualityCertificate document linked with material in the system

Vendor evaluation change report

SAP ERP

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Material

SAP DocumentManagement

Vendor Plant

Link to:Quality Info Record

Quality Certificate Document

Quality Management in ProcurementCertificate Document Linked by Document Management

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Quality Management in ProcurementCosting for Return Delivery

PR Qty

The Purchase ProcedurePurchase Requisition

Purchase Order

Inbound Delivery by Vendor

Goods Receipt

PO Qty

Inbound Delivery

GR

The Return Procedure

Q Notification

Return Delivery

Notification to Customer

Q - Notification

Return Delivery

Notification to Customer

GI

From business point of view, both inbound and return delivery

should be handled by vendor.

No costing for the return delivery

Return delivery issue to update the PO open quantity

Add one activity in the Q Notification to inform vendor of taking the goods back

Q

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Quality Management in ProcurementVendor Evaluation Concerning Delivery Time

Return Delivery

GI

Vendor re-send the goods

Goods Receipt on a Late Day

Vendor Evaluation (check delivery score)

Run Vendor Evaluation Report to Compare

After goods return to vendor, vendor should re-send the goods tocustomer.Based on the same PO

Change the date of the GR to the some time later than required delivery date

Re-run the vendor evaluation function after GR

Run vendor evaluation report to compare the score reduction after a late delivery

Vendor Evaluation (check quality score)

Q lit M t i P t

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GoodsReceipt

QualityInspection

UsageDecision

H88-1000

Inspection Lot

Quality Certificatenot okay

okay

Quality Notification and Return Delivery

Vendor Evaluation with Quality and Delivery

In Quality Management in Procurement, the following elements are involved:

Quality Management in ProcurementOverview

Q lit M t i P t

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Quality Mangement in ProcurementRejection Process: Overview

(5) Creation of aquality notificationand a returndelivery withreference to thequality notification

(7) Completion ofthe qualitynotification

(8) Vendorevaluation

(6) Goods Issuefor returndelivery

(1) Purchasing: Order thegoods from vendor

(2) Certificaterecording in the

system and goodsreceipt posting to

quality inspectionstock. An

inspection lot isgenerated.

(3) Qualityinspection and

inspection resultsrecording

(4) Usage decision:Reject the goods and

transfer them toblocked stock

H88-1000

SensitiveInductor

ROH

Q lit M t i P t

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(5) Invoiceverificationwithreference tothe originalpurchase order

(6)Vendor re-evaluation andevaluation scorereport

(3) Qualityinspection and

inspection resultsrecording

(2)Goods receiptwith automatic

qualitycertificategeneration. Post

to qualityinspection stock

and inspectionlot creation.

(1) Subsequentmaterial delivery

from vendor

Quality Mangement in ProcurementAcceptance Process: Overview

H88-1000

SensitiveInductor

ROH

(7)General QMEvaluations ofqualityinspections lots

(4) Usage decision:Accept the goods and

transfer them to

unrestricted use stock

Q lit M t i P t

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This scenario deals with quality inspection activities in the procurement process,in which a customer orders goods from a specified vendor and inspects themon receipt.

The following business departments are involved in the process, executing therelevant actions:

Purchasing department:

Purchase requisition and purchase order processing Vendor evaluation Goods return processing Invoice verification

Inventory department:

Quality department:

Goods receipt processing Goods return delivery processing

Quality inspection Goods usage decision Quality certificate processing Quality notification processing General QM Evaluations

Quality Management in ProcurementInvolved Business Departments