QUALITY MANAGEMENT WITH SAP ERP

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1 SAP Functions in Detail SAP ERP QUALITY MANAGEMENT WITH SAP ERP A comprehensive approach to quality management one that integrates information and processes across departments and corporate boundaries empowers your employees and supply chain partners to maintain and improve quality levels. The SAP ERP application provides a single, powerful solution that lets you take a comprehensive, broadbased approach to total quality management. It de livers a wide range of integrated quality management functionality and supports collaborative business processes for cost-effectively ensuring the quality of your products and processes and transforming quality management into a competitive advantage.

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3 CONTENT 4 To the Reader 5 Modern Quality Management: An Integrated Management Approach 5 Offering a Total Quality Management Solution 6 Internal and External Integration 8 Quality Management with SAP ERP 8 Take a Closed-Loop Approach to Total Quality Management 9 The Planning Phase 11 The Implementation Phase 16 The Usage Phase 18 Inspection Planning: Putting Quality Strategies into Action 18 Closed-Loop Inspection Planning: Failure Mode and Effects Analysis and Control Plan 20 Integrated Inspection Planning 21 Basic Data for Inspection Planning 23 Planning Tools 25 Quality Inspections: Achieving Reliable Results 25 Inspection Lot Processing 28 Inspection Results 32 Sample Management 34 Quality Certificates: Guaranteed Reliability Printed or on the Internet 34 Certificate Processing in Sales and Distribution 35 Certificate Creation Meeting Your Requirements 36 Certificate Processing at Goods Receipt 37 Collaborative Business: Certificate Data for the Whole Company 38 Efficient Problem Management 38 Improved Quality Through Targeted Problem Handling 38 Using Quality Notifications 39 Notification Processing 39 Quality Notifications 40 Elements of the Quality Notification 40 Optimized Usage 41 Analysis of Items and Defects 41 Tasks 42 Support Functions 43 Sustained Quality Control Planning, Evaluation, and Direct Intervention 43 Dynamic Modification of the Inspection Scope 44 On the Right Track with Statistical Process Control 46 Vendor Evaluation: Permanent and Objective Performance Monitoring 47 Evaluations: Keeping You Up-to-Date 50 Taking Control of Quality Costs 51 Test Equipment Management 51 Calibration Inspections and SAP ERP 51 Master Data in a Calibration Inspection 52 Planning a Calibration Inspection 53 Calibration Inspection 54 Evaluations for Test Equipment 55 Enabling an Integrated Enterprise Laboratory Information Management System with SAP ERP 55 The Enterprise LIMS Approach 55 Stability Study Supporting Product Development and Product Improvement 56 Compliance and Quality Control 58 Audit Management: Flexible Tool for Planning, Execution, and Evaluation of Audits 58 Assessments: Methods for Audit Criteria 58 Audit Processing: Evaluate Risks and Confirm Information 60 Mapping SAP Solutions to Your Six Sigma Initiatives 62 Enterprise Service- Oriented Architecture for Services-Based Business Solutions 63 Appendix 63 For More Information 63 Key Terms 64 Quick Facts

4 TO THE READER In today s economy, you must invest in business software in order to invest in your company s future. It is important to lay a trusted foundation for business excellence and innovation and to provide your organization with the enterprise resource planning (ERP) functionality that is needed to gain strategic insight, competitive differentiation, increased productivity, and business agility. With the SAP ERP application, SAP has transferred its vision of increasing efficiency within an organization to software for enterprise resource planning (ERP) that helps automate end-to-end business processes and extends those processes to the entire business ecosystem, including customers, partners, and suppliers. With SAP ERP, you can increase your employees productivity and provide them with the insight needed to make decisions that set you apart from the competition. Quality is a vital core competency for manufacturers industry-wide and given today s complex and often global production cycles, it cannot be treated as simply an afterthought. You have to engineer quality into the design of products and processes; you have to track quality through procurement, production, and delivery; and you have to constantly improve quality to keep pace with ever-growing customer expectations and competitive pressures. In short, you need to take a comprehensive approach to quality management one that integrates information and processes across departments and corporate boundaries and empowers both your employees and supply chain partners to maintain and improve quality levels. SAP ERP enables the comprehensive and efficient approach you need to transform quality management into a competitive advantage. SAP ERP delivers a wide range of integrated quality management functionality and supports collaborative business scenarios for cost-effectively ensuring the quality of your products and processes. As your employees work throughout the entire product life cycle along the supply chain, SAP ERP ensures that quality is efficiently built into your processes, systems, and products, from the shop floor to the top floor. If you are considering implementing or have already implemented quality management (QM) with SAP ERP in your company, and you want information on current functions and new developments, then this document contains all the information you need. This document targets project planners, decision makers, and people interested in implementing QM with SAP ERP. It explains how QM with SAP ERP is integrated in the SAP Business Suite family of business applications and enterprise service-oriented architecture (enterprise SOA), powered by the SAP NetWeaver technology platform. It provides you with insight into the current functional scope of QM with SAP ERP. It also shows how QM functions are integrated in SAP ERP and support the business processes of the supply chain. For detailed information about SAP ERP, visit our Web site at or visit the SAP Service Marketplace extranet at (login is required). 4 SAP Functions in Detail Quality Management with SAP ERP

5 MODERN QUALITY MANAGEMENT: AN INTEGRATED MANAGEMENT APPROACH Offering a Total Quality Management Solution The SAP ERP application provides a single, powerful solution that lets you take a comprehensive, broad-based approach to total quality management (QM). Far more than a traditional isolated computer-aided quality system or a laboratory information management system, SAP ERP supports quality processes in any industry. Practice Continuous Improvement You can quickly identify and analyze problems, then rapidly eliminate their root causes. With the quality notifications functionality, for example, you can ensure that all problems and unplanned events are captured directly when they occur, that they are correctly assigned and resolved, and that all actions are monitored for maximum effectiveness. An enterprise service-oriented ap - proach allows employees as well as business partners to create requests or notifications, work together online to record information, dispatch information, and track the processing status of requests providing the full functionality needed to ensure corrective and preventive actions. In addition, the analytic functionality of SAP ERP and the SAP NetWeaver Business Intelligence (SAP NetWeaver BI) component enables you to monitor quality performance and adjust quality strategies to eliminate problems. Using the flexible QM cockpit for evaluations in SAP ERP, for example, you can analyze both online and archived quality management data to support your company s Six Sigma projects. Manage Audit Processes The audit management functions of SAP ERP let you plan, conduct, and evaluate audits throughout the enterprise. You can perform internal or external audits of systems, processes, products, and environmental conditions; conduct a range of assessments and reviews; and monitor the effectiveness of all corrective and preventive actions linked to quality notifications. All this helps you comply with legal requirements, support benchmarking efforts, and uncover opportunities for improvement. Audit management functions support a wide range of industry standards, such as ISO 9000:2000, QS-9000, Good Manufacturing Practice (GMP), ISO 14011, and ISO Deliver Quality-Related Information Where It s Needed Web-based enterprise portal technology and ready-made SAP content give your employees and your partners a single point of access to all the information, applications, tools, and services they need to collaborate on quality initiatives. The easy-to-use, contextdriven portal increases the reach of your quality management efforts to include both everyday and occasional users in quality processes. For example, quality inspectors can work more efficiently by using the portal to access the specific work list they need to complete each inspection lot. Stand Out at Quality Control SAP ERP gives you quality control functionality that supports strategic planning, continuous monitoring, and quick problem resolution. The application lets you share quality information and control quality processes across the supply chain. You can plan, conduct, and manage quality inspections and integrate them into processes throughout the product life cycle. You can accurately track results and defect data; record and charge inspection costs; manage and maintain laboratory data related to samples, tests, and stability studies; automatically create quality certificates for customers and exchange that information with business partners; and connect, monitor, and maintain test equipment to ensure data accuracy. You can collect and analyze all the quality-related data needed to conduct Six Sigma projects. With the application s built-in workflow functions, you can automate and accelerate many of your business processes. Meanwhile, the SAP Manufacturing Integration and Intelligence (SAP MII) application lets you rapidly integrate SAP ERP with other manufacturing software enabling production-line personnel to record inspection results directly from the shop floor. Leveraging an enterprise service-oriented architecture (enterprise SOA), SAP ERP offers a wide range of enterprise services for quality management. In an interconnected world, the ability to exchange data across applications and with various partners is rapidly becoming as important as statistical process control SAP Functions in Detail Quality Management with SAP ERP 5

6 and test equipment interfaces. SAP ERP is designed for easy integration with other SAP and non-sap applications for supply chain management, customer relationship management, supplier relationship management, and enterprise resource planning. As a result, it enables the seamless sharing of information and true end-to-end business processes. Internal and External Integration The openness of the SAP NetWeaver technology platform and the seamless integration of QM with SAP ERP into a complete business solution support you in total quality management and satisfy the criteria for ISO 9000 or GMP. In the integrated SAP Business Suite family of business applications, SAP ERP functions are incorporated into other applications, such as the SAP Supply Chain Management (SAP SCM) or SAP Customer Relationship Management (SAP CRM) applications. You have software support for all important processes. QM with SAP ERP is linked directly to various functions that help you efficiently manage your business processes. Examples of such functions include: SAP Business Workflow tool for targeted process control Using SAP Business Workflow, you can establish a clearly defined information and processing network to quickly and efficiently process inspection lots and quality notifications. SAP ArchiveLink software for storing documents SAP ArchiveLink stores documents that are linked to application functions in an optical archive. Such documents include quality records, certificates, customer complaints, and other original internal or external documents. In addition to SAP ERP, you can integrate other SAP solutions in the SAP NetWeaver Portal component, such as SAP NetWeaver BI. You can also integrate non-sap products. As a result, you can adapt and enhance your working environment to suit your own requirements. Using clearly defined roles, employees can access their own work areas in SAP NetWeaver Portal. A role describes a specific activity profile and groups together the corresponding functions of that profile. Employees can then target their involvement in business processes. The flexible SAP NetWeaver Portal allows you to adapt the roles to suit your individual needs. 6 SAP Functions in Detail Quality Management with SAP ERP

7 Knowledge Management Enterprise Service-Oriented Architecture SAP SCM SAP NetWeaver BI Customer Service Sales and Distribution Production Planning External URL Plant Maintenance Production Planning/ Process Industries Quality Manager Controlling Classification System QM within SAP ERP Quality Planning Quality Inspections Quality Control Quality Certificates Quality Improvement Test Equipment Management Audit Management Materials Management SAP Business Workflow Test Equipment Manager Quality Planner Office Engineering Change Management SAP ArchiveLink Document Management System Notification Processor Inspection Planner Quality Inspector Figure 1: Internal and External Integration of Quality Management with SAP ERP SAP Functions in Detail Quality Management with SAP ERP 7

8 QUALITY MANAGEMENT WITH SAP ERP Quality management with SAP ERP tightens control and contains costs. Under current market conditions, many organizations follow a twofold strategy: strive for continued growth and innovation through competitive differentiation and increase efficiency to meet the enormous pressure to cut costs. In the end, you must be excellent in both to meet stakeholder expectations and achieve financial success. You must reduce costs wherever possible, but avoid risks that might lead to unexpected and unbudgeted expenditures. QM with SAP ERP enables enterprises to manage quality in a highly efficient way, differentiate their business, and establish a reputation of excellence. Conversely, mismanaging or ignoring quality issues negatively impacts a company s brand and products and impairs cost control. The best answer is to put in place a comprehensive approach to total quality management along the entire supply chain. Enterprise-wide audit management, quality engineering, quality assurance and control, and continuous quality improvement are all aspects of it. By using QM with SAP ERP, organizations can comply with industry standards and legal requirements more easily, increase customer satisfaction, and improve competitiveness. Take a Closed-Loop Approach to Total Quality Management There is more to quality management than performing quality inspections every now and then. Companies want to focus on prevention of deficiencies, continuous process improvement through collaboration, and sustainable quality control. You need to react immediately to unplanned qualityrelated events, involve all affected parties, and start follow-up actions to solve or control an issue. SAP ERP supports and ensures consistently high quality throughout the supply chain. Companies can comply continuously with legal requirements and industry standards. Customer satisfaction goes up, as does overall product quality and customer service management. Because project management and quality management functions are integrated with the SAP ERP Corporate Services solution, you can run Six Sigma projects to further enhance quality, improve processes, and reduce costs within your company. QM with SAP ERP supports key business activities with a focus on prevention of deficiencies, continuous process improvement through collaboration, and sustained quality control. Comprehensive quality management functionality supports: Quality engineering Quality assurance and control Quality improvement Audit management Benefits: Increased customer satisfaction through better product quality and enhanced complaint management and tracking (corrective and preventive action) Increased revenues by retaining custo m - ers and strengthening customer loyalty Increased efficiency through improved asset utilization QM with SAP ERP supports you both internally and externally. It provides complete support, from product and process planning in research and development (the planning phase); through procurement, production, and sales and distribution (the implementation phase); to service and usage (the usage phase), as shown in Figure 2. 8 SAP Functions in Detail Quality Management with SAP ERP

9 Maintenance Shipping Warehousing Disposal The Planning Phase Usage Final inspection Figure 2: Quality Loop According to ISO 9004 QM with SAP ERP supports the process of quality management in the planning phase. It comprises the following features and functions: Implementation Closed-loop inspection planning Closed-loop inspection planning means integrated inspection planning for goods receipt inspections and for inspections during production, and it starts at the very beginning of the product development process for a new product. The international standard ISO/TS16949 requires an advanced product quality planning (APQP) Planning Market research Production Design Testing Production planning Procurement process, a must for each supplier in the automotive and other discrete industries. SAP ERP provides tools for supporting this process; one is a tool for a failure mode and effects analysis (FMEA) and the other is the control plan. You can use the FMEA tool to perform a risk analysis for a distinct object (material or operation) to identify possible defects of a process or a product. By applying the given tools, you can detect possible risks and eliminate them by defining preventive actions at an early stage. With the control plan, you can plan and visualize all relevant inspections for a final product and all its components. The control plan connects all information from the related objects and is a basis for detailed inspection planning for each step (in-process control, goods-receipt inspections, and so on). Document management An important tool in SAP ERP is document management. You can use document management software to create links between inspection outlines, design drawings, technical delivery terms, specifications, product specifications, inspection methods, and other quality-relevant documentation and the corresponding master data. You can manage data according to validity, version, and status. Master data management During the implementation phase of your project, you specify productrelated settings that are required for controlling quality-related processes in the material master record in the quality management view of master data. For the management of quality information related to materials, vendors, and customers, and for the control of vendor and customer-related processes, you can maintain appropriate quality information records. You can, for example, assign quality assurance agreements and perform model processing. In material-related inspection plans, you can define either customer- or vendorspecific inspection specifications and multiple specifications related to further objects. When you are performing an SAP Functions in Detail Quality Management with SAP ERP 9

10 inspection during production, these elements are integrated into the routing or recipe. You can make changes to the master data centrally, and you can transfer the data from one source system to one or more target systems. In addition, there are tools available for research and analysis of master data linked in a hierarchy, such as where-used lists and the product structure browser. Engineering change management Central engineering change management coordinates the changes you make to master data. You can run such changes through an approval procedure (for example, according to GMP requirements). You can create different versions and then distribute them using workflow. You can also allocate a revision level with regard to a specific validfrom date when a change is made. Classification Using the integrated classification function, you can specify and assign data that is available in SAP ERP (such as materials, documents, and inspection plans), in order to be able to locate this data later according to specific search criteria (such as batch characteristics). Stability study Stability studies or shelf-life studies are conducted to track and examine how different environmental conditions (for example, temperature, light, or moisture) affect a compound, a material, or a batch over a specified period of time. Using features and functions in SAP ERP, you create physical samples of the material or batch and store them under controlled conditions for the duration of the study. At specified intervals during the study, you remove these physical samples or parts of these samples from the various conditions and test them according to predefined inspection plans. You can then use the results of these tests, which have accumulated over the course of the study, for example, to check and confirm whether the desired or guaranteed life expectancy of the product conforms to the predefined recommendations for storage. As a business process, the stability study is fully integrated in SAP ERP, using functions from the following areas: Quality management: quality notifications, quality planning, and inspection lot processing Asset life-cycle management: maintenance planning and scheduling Materials management: material master, batch management, and bills of materials Authorization management A central administration function is responsible for data security and protection. You can assign individual authorizations for the processing of master data and movement data. This enables you, for example, to set up employees so that they have to provide a digital signature when performing certain operations. Business workflow You can use business workflow to control certain complex processes and the output associated with these processes. For example, corrective tasks within a problem notification can be transferred automatically to the organizational unit responsible. Quality costs You can enter, collect, and bill costs related to the prevention of defects, inspections, and nonconformity to different account-assignment objects using orders in controlling. Key figure analysis With its quality key figures, SAP NetWeaver BI offers a wide range of possibilities for monitoring and controlling your quality processes. Audit management With integrated audit management tools you can plan and process audits, grade audit objects, monitor corrective and preventive actions that are based on the findings, and document and analyze audit data. Audit management, as part of SAP NetWeaver and thus also part of SAP ERP, supports all appraisals based on predefined criteria (audits, checks, inspections, reviews, and examinations) and can subsequently be used to valuate the object. The audit management functionality is very versatile and can be used for various application areas. Examples of audit usages are: Quality management (system audit, process audit, or product audit) and GMP Environment and hygiene management Safety and security management (facility safety, fire safety, or data protection) 10 SAP Functions in Detail Quality Management with SAP ERP

11 Six Sigma Having SAP ERP and SAP Business Suite in place in your company allows you to implement your Six Sigma initiative. SAP ERP supports most of the elements that are essential for Six Sigma, such as the definition of a structured problem-solving road map such as DMAIC (define, measure, analyze, improve, and control); a clear setup of tasks and responsible persons by using the Collaboration Projects (cprojects) application; the calculation of risks and costs; the linking of related documents, notifications, inspections, and audits; the determination of capability and performance indicators, for example, from statistical process control (SPC) monitoring of control charts and Cpk index; and a failure mode and effects analysis. Process data can be extracted from the source and transferred into SAP NetWeaver BI and an executive information system for general analysis purposes. SAP NetWeaver BI and the executive information system provide all the functions needed for calculating key performance indicators (KPIs), feeding balanced scorecards, or other assessment techniques. Collaborative scenario: quality notifications In the product development stage, if you are working with customers or partners, QM with SAP ERP offers you the opportunity to initiate product ideas or changes to products using quality notifications. Customer complaints, which can be entered on the Internet, can be used to determine product quality. Vendors can ask for permission to deviate from specifications if they cannot adhere strictly to customer specifications. For this scenario enterprise services are also available to create and maintain notifications in SAP ERP. Collaborative scenario: quality certificates Working with your customers or vendors, you use certificate profiles to plan exactly which characteristics are to appear on the certificate. This certificate data can be exchanged electronically using quality data interchange (QDI), or it can be stored on the Internet. For example, you can store it as a PDF document. Collaborative scenario: results recording You can record inspection results using the Internet or intranet. Results can be recorded by external service providers (for example, commercial analysts) and internal inspectors (for example, in a source inspection) in their respective work centers. For this scenario enterprise services are also available to trigger and record inspection results in SAP ERP. The Implementation Phase QM with SAP ERP ensures quality across the entire supply chain and beyond company boundaries. It supports your quality management department in the following activities: Procurement. QM with SAP ERP manages vendor-related master data, controls the purchasing process according to certain quality criteria, and handles inspection certificates and goods receipt inspections. Production. QM with SAP ERP integrates inspection specifications in routings and recipes, allows inspections during production and goods receipt inspections for the manufacturing order to take place, monitors the production process using control charts, and confirms quality, quantity, and costs. Sales and distribution. QM with SAP ERP manages customer-related master data, controls the sales and distribution process according to quality criteria, and handles inspection certificates and inspections at goods issue. Procurement Vendor evaluation Materials management provides information for the purchasing agent about a vendor s delivery reliability, price record, and service record. QM with SAP ERP provides the purchasing agent with information about quality management used by the vendor and the quality of previously delivered goods. To do this, SAP ERP summarizes quality scores from vendor audits, goods receipt inspections, and complaints against the vendor. Vendor release In some industry sectors, vendors must have a quality management system in their company. Such a system might, for example, be required to be compliant with the ISO 9000 series of standards. Such vendors must have this system certified by an accredited organization. Your SAP ERP application SAP Functions in Detail Quality Management with SAP ERP 11

12 checks if the quality management system used by the vendor is adequate for certain materials and then either releases or blocks the supply relationship accordingly. You can limit the release of this supply relationship to a specific time frame and a maximum delivery quantity. If the vendor has serious quality problems, you can block requests for quotations, purchase orders, or goods receipts for specific materials supplied by this vendor. QM with SAP ERP also monitors the step-by-step release of a material. Vendor deliveries must sequentially pass through a series of customerdefined statuses, such as model, preliminary series, and production series, using appropriately assigned inspection plans. quality assurance agreement. Vendors may also be required to include a quality certificate with the delivery. Source inspection Occasionally, inspections can be performed at the vendor s premises to replace a goods receipt inspection. If this occurs, the software takes the target delivery deadline into account and creates an inspection lot in time for the source inspection. You can now perform a source inspection at the vendor s site, because it is possible for you to access SAP ERP using SAP NetWeaver Portal. This is possible even if the vendor does not use SAP ERP. Goods Receipt Goods receipt certificate If you have identified that a material requires a certificate, the receipt of this certificate must be confirmed. SAP ERP takes appropriate action if the certificate is missing (for example, posting the goods to blocked stock). SAP ERP supports the management of the certificate receipt process and sends reminders if necessary (see Figure 3). You can manually create the certificate and store it in the optical archive (SAP ArchiveLink), or you can send it in electronic form. Certificate data can be transferred directly to the goods receipt inspection lot using electronic quality data interchange. Reminder In many industry sectors, suppliers are intermediaries (distributors), which means that the quality of produced goods is dictated primarily by the manufacturer rather than the vendor. Consequently, you can apply the following functions to a manufacturer: vendor release, inspection planning, dynamic modification of the inspection scope, and complaints against the vendor. Certificate Requirement Certificate Included? No Inspection Lot: Confirm receipt when or after making usage decision No Inspection Lot: Post goods to blocked stock Quality assurance agreement, technical delivery terms, and certificate requirement When the purchasing agent requests a quotation and issues a purchase order, vendors that are released receive information automatically about the technical delivery terms and the current Yes Figure 3: Certificate Processing at Goods Receipt Update Certificate Record 12 SAP Functions in Detail Quality Management with SAP ERP

13 Dynamic modification If the quality of a supply relationship is consistently high, you may want to waive the goods receipt inspection, particularly if the vendor has a certified QM system. For partial lots, you can set the software to inspect a goods receipt only once for each purchase order, goods receipt, or batch. If you do not want to waive the goods receipt inspection completely, you can reduce the scope of the inspection as far as the quality level allows. The reduction of the inspection scope may lead to a skip lot. If you allow a skip lot and an automatic usage decision for a material, the software processes skipped lots without intervention. It then immediately posts the inspection lot quantity to unrestricted-use stock (ship to stock). Receiving inspection If the prerequisites for ship to stock are not fulfilled, SAP ERP automatically triggers inspection lot processing upon goods receipt. In addition to the goods receipt document, the application also creates an inspection lot record, selects an appropriate inspection plan, and determines the sample size based on the quality level. Physical-sample drawing If goods are delivered in containers, you can take samples in accordance with a sample-drawing procedure. The documents you need (such as sampledrawing instructions, sample labels, and inspection instructions) are available for printing immediately. You can then proceed with the inspection. Recording inspection results and defects You can record the results for the goods receipt inspection in the form of inspection characteristic values and defect data records or texts. If serious problems arise during a goods receipt inspection, a quality notification can be created automatically. Inspection results can also be recorded automatically using electronic measuring equipment. Appraisal costs Costs are associated with every inspection and defect. Appraisal costs are determined using the activity confirmations of the people involved in an inspection. You can allocate the costs that are calculated on the basis of these confirmations for one or more inspection lots in several QM orders, and you can then pass them on to the cost object. Costs associated with defects are settled using quality notifications. Purchase Order Goods Receipt Stock in Quality Inspection Inspection Figure 4: Inspection Lot Processing at Goods Receipt Inspection completion The processing of an inspection lot in QM with SAP ERP ends after the inspection is completed and the usage decision is made (see Figure 4). The accepted inspection lot quantity is posted manually or automatically to unrestricted-use stock. Special stock postings are available to you for rejected quantities, including posting to blocked stock, transfer posting to a different material, returning to the vendor, or posting to scrap. If the material is handled in batches, the software proposes a batch status that is compatible with the usage decision. Once the usage decision is made, SAP ERP updates the quality level and the QM information system and makes the quality score of the inspection lot available for the vendor evaluation. SAP ERP also updates material and vendor information in the quality data record. For example, once the inspection lot has been completed, No Yes Quality Notification Unrestricted- Use Stock SAP Functions in Detail Quality Management with SAP ERP 13

14 the status of the supply relationship can be updated from model delivery to regular delivery. SAP ERP can trigger a series of userdefined follow-up actions on the basis of the usage decision. For example, you can print specific inspection reports. Invoice verification If invoices for the delivery of goods are received before the usage decision is made for the goods receipt inspection lot, you can prevent an automatic payment during invoice verification. Complaints against the vendor Defects in delivered material that have been caused by the vendor or manufacturer can be documented in a quality notification. You can use SAP Business Workflow to pass this notification on to the processor responsible. The processor can then initiate various tasks (such as posting to blocked stock or sending a complaint against the vendor). Complaints can be entered on the vendor s Web site. Characteristic Length Width Inspection Lot Inspection Point Target 50.0 mm 30.0 mm Actual 49.8 mm 31.2 mm Figure 5: Inspection During Production Production Materials planning When you are inspecting raw materials or semifinished products, the planned duration of the receiving inspection is taken into account in materials planning. Inspection during production QM with SAP ERP integrates quality inspections into the production process (see Figure 5). It supports different types of production, from order-related, lot-based production and the assembly process in mechanical engineering, through repetitive manufacturing in the automotive industry, to batch-based process manufacturing in the chemicals, pharmaceutical, and food and beverage industries. You can initiate inspections on the basis of different types of goods movements. Inspection lots can be created automatically when a material component is removed or when a product for the production or process order is processed at goods receipt. Automatic Defects Recording Quality Notification Tasks Inspection lots for an inspection during production can be created in the following ways: As an inspection lot during production when a production order is released. This is not stock relevant. As an early inspection lot at goods receipt. This is stock relevant; in other words, the stock in the quality inspection is managed using the usage decision for the inspection lot. When goods are received from a subcontractor for external processing operations. This can be stock relevant, depending on software settings. Physical-sample drawing The sample size is calculated, and shop papers (such as sample drawing, inspection instructions, and sample labels) are printed at previously determined work centers after the valid routing or master recipe has been selected. Digital signature You can set the software to require a digital signature (electronic signature) from the employee who releases the physical-sample drawing, records results, or makes the usage decision, to ensure that this particular employee has the appropriate authorization. Inspection results and defects recording Inspection results can be recorded for the following objects: Inspection characteristics The results can be recorded in summarized form, in classes, or as single values. 14 SAP Functions in Detail Quality Management with SAP ERP

15 Inspection points Several inspections are performed for each inspection characteristic. Inspection points can be userdefined, and they can be planned in advance if necessary. They can be related to production quantities or production times (for example, inspection of a wire basket or silo once during each shift or every two hours). Physical samples These can be planned in advance using a sample-drawing procedure, or they can be unplanned. Partial lots Production quantities of the same quality can be grouped together. Batches Inspection results can be used for batch determination at a later stage; for example, they can be applied when choosing products at the delivery stage or when deciding which subcomponents to use for production. Serial numbers This applies if the inspection results are to be assigned to a single unit. In this case, the serial numbers can be copied from the production order. Defects can be recorded for inspection characteristics, inspection operations, or inspection lots. the results of an initial run. If an action limit is exceeded, messages and notifications can be created. Appraisal costs and production quantity confirmations When you are recording inspection results, you can also confirm production quantities and costs for the production order (see Figure 6). Such confirmations control the subsequent production process (for example, the release of inspection operations or subsequent work that has yet to be performed). Inspection completion The inspection is completed when the usage decision is made. Employees with appropriate authorizations can post stock quantities, classify charges according to their quality, and perform follow-up actions. QM with SAP ERP provides a digital signature for the usage decision. Sales and Distribution Quality assurance agreement and technical delivery terms You can store customer-related quality documents in the quality information record for sales and distribution. In addition, you can use this quality information record to control the time and type of a quality inspection. Variant configuration in the sales order At the time of sales order creation, customers can specify quality characteristics for the desired variant. This information then flows into all inspections during production in the form of inspection specifications. Statistical process control The inspection results are the basis for statistical process control using control charts. A control chart can be valid for several inspection lots and production orders. The warning and action limits of a control chart are calculated using the most recent inspection results or Figure 6: Quantity Confirmation and Inspection Point Valuation SAP Functions in Detail Quality Management with SAP ERP 15

16 Batches determination If you manage the stock of a material in batches, QM with SAP ERP allows you to select suitable batches at delivery using batch characteristics. These characteristics can be populated with quality results via valuation based on multiple specifications. Inspection for delivery or for goods issue Inspection lots can be created at the picking stage or at goods issue. After you have chosen a suitable inspection plan, the sample size is calculated and shop papers (sample-drawing items, inspection instructions, and sample labels) are printed. When the inspection results have been recorded, the inspection is completed with the usage decision. Certificate at goods issue At goods issue, you can use a quality certificate to document that the inspection results are in accordance with the customer s specifications. You can enter inspection characteristics from the inspection plan and characteristics that were defined in the batch determination as inspection specifications on the certificate. The form, content, and means of output are customer-specific. These are derived from the specifications made by the recipient of the certificate at picking or at goods issue. Quality data interchange Formatted quality data contained in a quality certificate can be sent electronically and then automatically transferred into an inspection lot at the customer site. It is also possible to make this data available on the Internet. Processing complaints and handling returns You can create customer complaints as quality notifications on the Internet. You can document defects and tasks, and you can also perform various follow-up functions using the action box. For example, you can process returns or repair orders, enter costs, perform stock postings, or trigger inspections. The Usage Phase In the usage phase of the product life cycle, service providers can process inspections (outsourcing) with QM with SAP ERP. Service providers can use SAP ERP to identify items, plan and confirm services, and create invoices for services rendered. Service Variant configuration in the sales order Inspection laboratories perform inspections as a service (commercial analysis). When creating the sales order, these laboratories can select the inspections requested by the customer from inspection plans and transfer them into a service order. Service order inspection Inspections can be selected using variant configuration in the sales order or by selecting inspection operations in the service order. Once the inspections have been selected, inspection lots can be created when the service order is released. Then the inspection can begin, and inspection instructions and sample-drawing items can be printed. Resource-related billing document After the inspection results have been confirmed, you can invoice the customer for the inspection costs. Inventory Management Stock categories Materials management categorizes inventory by the following stock types: unrestricted use, blocked, and in quality inspection. Usually the specified quantity of a received material is posted to inspection stock for the duration of the goods receipt inspection. This stock can only undergo a transfer posting during inspection lot processing. For example, when the usage decision is made, it can be posted to unrestricteduse stock. In the inspection lot, you can view all of the posting documents that relate to the lot stock. Warehouse management If you use warehouse management software, SAP ERP also manages the inspection lot samples and units created due to the usage decision or while locating a storage bin. The inspection lot identifies each unit and transfer requirement. Using the strategy defined for placement in storage, the software triggers the transport of samples and partial quantities, and it posts the stock. Handling unit management You can use handling units as transport units. A handling unit is a physical unit consisting of packaging and the goods stored with or on this packaging. The software enables you to move these handling units, as opposed to just moving the materials. Therefore, a quality inspection can be performed with reference to handling units. 16 SAP Functions in Detail Quality Management with SAP ERP

17 Batch management Materials management can manage stocks for materials in batches, and it can recognize the difference between batches in unrestricted-use or blocked stock. You can use QM with SAP ERP to monitor the shelf life of batches and deadlines for recurring inspections. In addition, you can change the batch status and perform stock postings automatically. For example, you can post to blocked stock when the expiry date is exceeded. Batch tracking The batch where-used list helps you determine which raw-material batches or semifinished products make up the batch of a finished product (top-down analysis) or, conversely, which batches of semifinished or finished products are made up of a particular batch of a raw material (bottom-up analysis). The where-used list also forms the basis for printing inspection results from the previous assembly stages (for example, semifinished products) for an end product on a quality certificate. SAP Functions in Detail Quality Management with SAP ERP 17

18 INSPECTION PLANNING: PUTTING QUALITY STRATEGIES INTO ACTION As inspection planner or quality engineer, you implement predefined planning strategies in your company. This includes: Performing closed-loop inspection planning with FMEA and control plans Defining the trigger, type, and scope of quality inspections Creating and managing task lists as the basis for quality inspections Managing and processing the basic data used in task lists Determining the procedure for statistical process control To complete these tasks, you can use the reusable basic data as building blocks and a flexible planning tool. all components, and is the basis for the third step, maintaining the operational inspection plans and routings. As soon as the product is produced, the supplier has to implement a closedloop process starting with a continuous improvement process. Each internal or external complaint must be checked against the preventive actions, which have been defined in the FMEA during the first step of the closed-loop inspection planning. One result of the complaint could be to change the FMEA and control plan as well as operational plans. FMEA is an analytical method for early detection and elimination of possible failures and issues in products and processes. In the context of quality management, this method is used for preventive failure avoidance. SAP ERP offers tools for monitoring as well as a cockpit for building an FMEA product or process structure. FMEA can be used for root-cause analysis in Six Sigma projects, risk assessment during product development, and operational quality control and planning. FMEA supports compliance with ISO/TS16949 (automotive industry). Closed-Loop Inspection Planning: Failure Mode and Effects Analysis and Control Plan Specification Characteristics FMEA (Product/ Process) Defects Characteristics Complaints (8D-Method) Defects Characteristics Closed-loop inspection planning means an integrated inspection planning for goods receipt inspection and for inspection during production, and it starts at the very beginning of the product development process for a new product. Typically the closed-loop inspection planning process comprises the following steps: CAD Stamping Characteristics Control Plan Defects Characteristics SPC Zero-Defect Production Defects Characteristics The first step is to work in a team of experts from different departments to create an FMEA. In doing so, the product and process characteristics with a high safety risk are pointed out. In a second step, these characteristics are transferred into a control plan. The control plan gives an overview about all inspections for a final product, including Inspection Plan Defects Characteristics Figure 7: Closed-Loop Inspection Planning According to ISO/TS D = eight disciplines CAD = computer-aided design FMEA = failure mode and effects analysis SPC = statistical process control 18 SAP Functions in Detail Quality Management with SAP ERP

19 The FMEA cockpit and monitor offer the possibility of a hierarchical display of the object, machine, or system being inspected for possible failures (see Figure 8). With the help of a hierarchical or a linked structure, the entire chain of failure mode, causes, and consequences can be viewed and investigated. With risk-priority numbers you can evaluate and estimate the defect cause of a failure. The necessary actions to diminish or avoid a failure can be managed with the FMEA tool as well. Furthermore, there is a connection between the FMEA of one element with the lists of those of subordinated and superordinated elements. Those lists contain not only the addressed elements but also the addressed functions and failures. This makes sure that the entire object, machine, or system is investigated regarding possible risks, since: One function can be dependent on the function of a subordinated element. The outage of one function can cause the outage of the function of a subordinated element. With the integration of the FMEA tool into SAP ERP, it is possible to connect the FMEA with related functions and objects, for example, with catalogs of failure characteristics or inspection characteristics. Furthermore, you can directly connect the FMEA with a control plan. You can archive FMEAs that are no longer in active use. In addition to FMEA, there are functions for managing a control plan to ensure a closed-loop inspection planning that is required as an international standard according to ISO/TS A control plan is the description of the entire technical or functional system that is being monitored or checked for possible risks and defects. Fundamentally, the control plan describes all the actions that need to be performed in each phase of the process. This includes the inspection of the goods receipt, the goods shipment, and the scheduled inspections and quality control activities that make sure all process results are controlled and documented (see Figure 9). Within the closed-loop inspection planning, you usually start an FMEA for a Figure 8: Example of FMEA with Structure product to evaluate product- and process-related characteristics with a high failure risk. These characteristics are transferred into the control plan. The control plan includes an overview of all inspections that are relevant for a particular product and all its components. This is the basis for developing inspection plans and inspection operations in the subsequent production process. Once a product is part of serialized or mass production, it is still necessary to check the previously defined risks as well as the control plan itself. In the course of the continuous improvement process, it may be necessary to adjust the FMEA or the control plan. SAP Functions in Detail Quality Management with SAP ERP 19

20 Integrated Inspection Planning With integrated inspection planning, you can create and process different task-list types to adapt quality inspections to suit the respective business processes: Inspection plan for inspections during goods movements Routing for inspections during production in discrete manufacturing Rate routing for inspections during production (repetitive manufacturing) Master recipe for inspections in the process industry Material specification for simplified inspection planning Task lists that differ only slightly in terms of content can be grouped together in task-list groups. The information that can differ within a task-list group may consist of task-list usage, vendor assignment, or validity of certain lot-size intervals. Figure 9: Example of Control Plan Task List Group Inspection Plan 1 Inspection Plan 1 Inspection Plan 2 Inspection Plan 3 Inspection Plan 4 Inspection Plan 5 Inspection Plan 6 Inspection Plan 7 Task List Header Operation 1 Operation 2 Operation 3 Operation 4 Characteristic 1 Characteristic 2 Customer 1 Customer 2 Material 1 Material 2 Vendor 1 Vendor 2 Method 1 Task List Structure As shown in Figure 10, a task list consists of the task-list header, operation, characteristic, and test equipment. Task-list header You define the following information in the task-list header: Material task-list assignments Assignment of a task list to materials. For example, you can assign several materials to a task list. There can be several task lists for one material. You can also assign inspection plans to a vendor or customer, in addition to the material. Figure 10: Task List Structure 20 SAP Functions in Detail Quality Management with SAP ERP

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