QM in Procurement Overview

Scenario Overview

H88: Quality Management in Procurement

Quality Management in Procurement Overview

This scenario deals with quality inspection activities in the procurement process, in which a customer orders goods from a specified vendor and inspects them on receipt.
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, quality notification and vendor quality assessment Vendor re-evaluation on a future good receipt date to show score changes on quality and delivery criteria General QM evaluations
SAP AG 2006

Quality Management in Procurement Business View Rejection Process

Business Benefits
The purchasing department orders goods from a specified vendor.

Customer

Supplier / Manufacturer

Vendor

Business Benefits

Create purchase requisition

Create purchase order

Deliver goods

A quality certificate is mandatory in the scenario. This certificate is a document received from the vendor.

Create inbound delivery

Record quality certificate in system

The Quality Management department inspects the goods according to the quality inspection plan (result recording). All inspection results are documented in the inspection lot.

Process goods receipt

At the goods receipt, the material is posted to quality inspection stock. The system creates an inspection lot automatically.

Quality inspection / Result Recording

SAP AG 2006

Quality Management in Procurement Business View Rejection Process

Business Benefits
In case the material does not meet the standards it will be rejected during the usage decision.

Customer

Supplier / Manufacturer

Vendor

Business Benefits
The transfer to the blocked stock restricts the material usage.

Usage decision / Transfer to blocked stock

To track quality issues a quality notification is created. The vendor is informed about the rejection.

Create quality notification Once the material has been rejected the delivery is created to return the material to vendor. A customer number is assigned to the vendor as a return customer.

Create return delivery

The goods issue is posted and the material is sent back to the vendor.

Post goods issue

Complete notification

Vendor evaluation

During the vendor evaluation the quality score for the vendor is changed automatically.

SAP AG 2006

Quality Management in Procurement Business View Acceptance Process

Business Benefits
The vendor provides the manufacturer with a new delivery of the material in a future date. At the goods receipt, the material is posted to quality inspection stock. The system creates an inspection lot automatically and a quality certificate is generated automatically. The material meets the quality standards and will be accepted during usage decision. The transfer to unrestricted use stock makes the material available for production.

Customer

Supplier / Manufacturer

Vendor

Business Benefits

Subsequent delivery of material

Process goods receipt The Quality Management department inspects the goods according to the quality inspection plan (result recording). All inspection results are documented in the inspection lot.

Quality inspection

Usage decision / Transfer to unrestricted use

Invoice verification

The purchasing department carries out the invoice verification to post the invoice to accounting.

Vendor re-evaluation Finally, you reevaluate the vendor. Score changes against delivery and quality will be shown in the system.

Allgemeine QMAuswertungen

SAP AG 2006

Quality Management in Procurement Component Overview

Customer Supplier/Manufacturer
Purchase requisition and purchase order processing Inbound delivery based on the purchase order Quality Certificate document linked with material in the system Send goods Quality certificate recording Goods receipt to quality inspection stock and automatic 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

SAP ERP

Re-send goods in future date

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 Vendor evaluation change report

SAP AG 2006

Quality Management in Procurement Certificate Document Linked by Document Management

Material

Quality Certificate Document

SAP Document Management

Link to: Quality Info Record Vendor Plant

SAP AG 2006

Quality Management in Procurement Costing for Return Delivery

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

The Purchase Procedure Purchase Requisition

Purchase Order Inbound Delivery by Vendor Goods Receipt

PR Qty PO Qty Inbound Delivery GR

The Return Procedure Q Notification

Return Delivery Notification to Customer
SAP AG 2006

Q - Notification Return Delivery Notification to Customer GI

Quality Management in Procurement Vendor Evaluation Concerning Delivery Time

After goods return to vendor, vendor should re-send the goods to customer.
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
Return Delivery GI Vendor Evaluation (check quality score)

Vendor re-send the goods Goods Receipt on a Late Day Vendor Evaluation (check delivery score) Run Vendor Evaluation Report to Compare

SAP AG 2006

Quality Management in Procurement Overview

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

Quality Notification and Return Delivery

Usage Decision

Goods Receipt

not okay

H88-1000

Quality Certificate

Inspection Lot

okay Vendor Evaluation with Quality and Delivery

SAP AG 2006

Quality Inspection

Quality Mangement in Procurement Rejection Process: Overview

(8) Vendor evaluation

(1) Purchasing: Order the goods from vendor (2) Certificate recording in the system and goods receipt posting to quality inspection stock. An inspection lot is generated. (3) Quality inspection and inspection results recording (4) Usage decision: Reject the goods and transfer them to blocked stock

(7) Completion of the quality notification

H88-1000

(6) Goods Issue for return delivery

Sensitive Inductor ROH

(5) Creation of a quality notification and a return delivery with reference to the quality notification
SAP AG 2006

Quality Mangement in Procurement Acceptance Process: Overview

(7) General QM Evaluations of quality inspections lots

(1) Subsequent material delivery from vendor (2) Goods receipt with automatic quality certificate generation. Post to quality inspection stock and inspection lot creation. (3) Quality inspection and inspection results recording

(6) Vendor reevaluation and evaluation score report

H88-1000
Sensitive Inductor ROH

(5) Invoice verification with reference to the original purchase order

(4) Usage decision: Accept the goods and transfer them to unrestricted use stock

SAP AG 2006

Quality Management in Procurement Involved Business Departments

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

The following business departments are involved in the process, executing the relevant actions:
Purchasing department:
Purchase requisition and purchase order processing Vendor evaluation Goods return processing Invoice verification

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

Inventory department:
Goods receipt processing Goods return delivery processing
SAP AG 2006