What is SAP?

Definition of SAP ERP Software

What is SAP?

SAP stands for Systems Applications and Products in Data Processing.

SAP, by definition, is also name of the ERP (Enterprise Resource Planning) software as well
the name of the company.

SAP Software was Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner, and Tschira.

SAP system consists of a number of fully integrated modules, which covers virtually every
aspect of business management.

SAP is #1 in the ERP market. As of 2010, SAP has more than 140,000 installations
worldwide, over 25 industry-specific business solutions and more than 75,000 customers in
120 countries

Other Competitive products of SAP Software in the market are Oracle, Microsoft Dynamics,
etc.

What is SAP ERP? Why is it required?

The following video will explain the need for an ERP software like SAP in an enterprise

The very fundamental question for any beginners is why Enterprise Resource Planning also
called ERP, is required? To answer this, let’s examine this typical business scenario.

Suppose a client approaches a sales team asking for a particular product. The sales team
contacts the inventory department to check the availability of the product. To their surprise,
the sales team found out that the product is out of stock. So next time this doesn’t happen,
they have to introduce an SAP ERP tool.
Before we actually see in detail, what ERP is and how ERP can help in your business process,
we will understand how different departments are involved in the whole business process,
right from the ordering of the raw material – to manufacturing goods – to delivering final
products to the customer.

Here is the whole process that is followed by any business unit.

1. Client contacts the sales team to check the availability of the product
2. Sales team approaches the Inventory department to check for the availability of the
product
3. In case the product is out of stock, the sales team approaches the Production
Planning Department to manufacture the product
4. The production planning team checks with inventory department for availability of
raw material
5. If the raw material is not available with inventory, the Production Planning team
buys the raw material from the Vendors
6. Then Production Planning forwards the raw materials to the Shop Floor Execution for
actual production
7. Once ready, the Shop Floor Team sends the goods to the Sales Team
8. Sales Team who in turn deliver it to the client
9. The sales team updates the finance with revenue generated by the sale of the
product. Production planning team update the finance with payments to be made to
different vendors for raw materials.
10. All departments approach the HR for any Human Resource related issue.

That is a typical business process for any manufacturing company. Some key inferences one
could derive from the scenario would be.

 It has many departments or business units

 These departments or business units continuously communicate and exchange data
with each other
  The success of any organization lies in effective communication, and data exchange,
within these departments, as well as associated third party such as vendors,
outsourcers, and customers.

Based on the manner in which communication and data exchanged is managed. Enterprise
systems can be broadly classified as

1) Decentralized System

2) Centralized System which is also called as ERP.

Decentralized System

Let's look at Decentralized system first, in a company with Decentralized System of Data
Management. There are two major problems –

 Data is maintained locally at the individual departments

 Departments do not have access to information or data from other departments

To identify issues arising due to decentralized Enterprise management system lets look at
the same business process again. The customer approaches the sales team for a product,
but this time around, he needs the product, on an urgent basis.

Since it is a decentralized process, the Sales Team do not have any real-time information
access to the product availability. So they approach the Inventory department to check the
availability of the product. This process takes time, and the customer chooses another
vendor leading to loss of revenue and customer dissatisfaction.
Now, suppose the product is out of stock, and the Sales Team approaches the Production
Planning team to manufacture the product for future use. Production Planning Team checks
the availability of the raw materials required.

In a decentralized system, raw material information is stored separately by Production

Planning as well as the Inventory Department. Thus, data maintenance cost (in this case,
Raw Material) goes up.

The raw material information is available in two different departments Inventory as well as
Production Planning. When sales team check a particular raw material required to
manufacture the product, it shows the raw material is available as per the inventory, but as
per the database of the production planning team, the raw material is out of stock.

So, they go ahead and buy the raw material. Thus, material, as well as inventory cost, goes
up.

Once the raw material is available, the shop floor department suddenly realizes they are
short of workers. They approach the HR, who in turn hire temporary employees at higher
than market rates. Thus LABOR Cost Increases.
The production planning department fails to update the finance department on the
materials they have purchased. The finance department defaults the payment deadline set
by the vendor causing the company loss of its reputation and even inviting a possible legal
action.

These are just a few of many problems with decentralized systems.

Some Major problems with the decentralized system are –

 Numerous disparate information systems created individually over time which are
difficult to maintain
 Integrating the data is time and money consuming
 Inconsistencies and duplication of data
 Lack of timely information leads to customer dissatisfaction, loss of revenue and
reputation
 High Inventory, material, and human resource cost.

These are some major drawbacks for which we need a solution. Well, the Solution lies
in Centralized Systems i.e., ERP.

Centralized System

In a company, with a Centralized System of Information and Data Management.

1) Data is maintained at a central location and is shared with various Departments

2) Departments have access to information or data from other Departments

Let’s look at the same business process again to understand how a Centralized Enterprise
System helps to overcome problems posed by a Decentralized Enterprise System.
In this case, all departments update a Central Information System.

 When Customer approaches the sales team to buy a product on an urgent basis. The
Sales Team has real-time information access to the products in inventory which is
updated by the Inventory Department in the Centralized System
 Sales Team respond to customer request on time, leading to Increased Revenue and
Customer Delight.
 In case, manufacturing is required the Sales Team update the Centralized Database,
so that all the department remain informed about the product status.
 Production Planning Department is auto updated by the Centralized Database for
requirements. Production Planning Team checks the availability of the raw materials
required via the Central Database, which is updated by the Inventory Department.
 Thus, Data Duplication is avoided, and accurate data is made available. The Shop
Floor Team update their Man Power Status regularly in the Central Database, which
can be accessed by the HR department.
 In case of shortage of workforce, HR team starts the recruitment process with
considerable lead time to hire a suitable candidate at market price. Thus labour cost
goes down.
 While vendors can directly submit their invoices to the Central Enterprise System,
which can be accessed by the finance department. Thus, payments are made on
time, and possible legal actions are avoided
 SAP software is a type of Centralized System. SAP Systems are the most popularly
used in ERP software.

Key benefits of the centralized system are:

 It eliminates the duplication, discontinuity, and redundancy in data

 Provides information across departments in real time.
 SAP System provides control over various business processes
 Increases productivity, better inventory management, promotes quality, reduced
material cost, effective human resources management, reduced overheads boosts
profits
 Better customer interaction and increased throughput. It also improves customer
service
  Hence, a centralized enterprise management system is required.
 SAP Software is a centralized enterprise management system, also known as
Enterprise Resource Planning.
 The meaning of the acronym SAP is Systems Applications and Products in Data
Processing

SAP Business Suite

What is SAP Business Suite?

SAP Business Suite is collection of fully integrated applications such as SAP customer
relationship management (CRM), SAP Enterprise Resource Planning (ERP), SAP product
lifecycle management (PLM), SAP supplier relationship management (SRM), and SAP supply
chain management (SCM) modules.

Most people relate SAP with its ERP offering. But SAP now offers variety of products to
address varied needs of an organization. Let’s have a look at them -

 SAP HANA: - High Performance Analytic Appliance uses in-memory computing, a

breakthrough technology that enables analysis of very large, non-aggregated data at
unprecedented speed in local memory (vs. disk-based database) enabling complex
analyses, plans and simulations on real-time data.
 SAP Convergent Charging: - SAP Convergent Charging provides a rating and charging
solution for high-volume processing in service industries. It delivers pricing design
capabilities, high performance rating and convergent balance management.
 Customer Relationship Management:- Unlike other CRM software, the SAP
Customer Relationship Management (SAP CRM) application, part of the SAP Business
Suite, not only helps you address your short-term imperatives – to reduce cost and
increase your decision-making ability – but can also help your company achieve
differentiated capabilities in order to compete effectively over the long term.
 Enterprise Resource Planning: - A sound foundation is necessary to compete and
win in the global marketplace. The SAP ERP application supports the essential
functions of your business processes and operations efficiently and are tailored to
specific needs of your industry like SAP ERP Financials, SAP ERP Human capital
management, SAP ERP Operations, SAP ERP corporate services.
 SAP Environment, Health, and Safety Management: - It supports environmental,
occupational and product safety processes, regulatory compliance, and corporate
responsibility. This is accomplished by embedding corporate policies, compliance,
and environmental, health and safety capabilities with global business processes for
human resources, logistics, production and finance.
 SAP Global Batch Traceability: - It allows you to completely trace tracked objects,
for example, a batch, across both SAP systems and non-SAP systems. In the event of
a recall or withdrawal, SAP GBT ensures the timely compliance with legal reporting
timelines. Furthermore, it helps you to minimize cost and corporate risk exposure.
You can also analyse multiple objects, for example, batches, in one run.
 SAP Product Life Cycle Management: - To survive in an ever-changing global
environment, creating and delivering innovative and market differentiating products
 and services is what distinguishes your company from the competition. The SAP
Product Lifecycle Management (SAP PLM) application provides you with a 360-
degree-support for all product-related processes – from the first product idea,
through manufacturing to product service
 SAP Supplier Life Cycle Management: - SAP Supplier Lifecycle Management is a
holistic approach to managing supplier relationships. It deals with the supply base as
a whole to constantly determine the right mix of suppliers. It covers the lifecycle of
individual suppliers? From on boarding to a continuous development.
 Supply Chain Management: - You face enormous pressure to reduce costs while
increasing innovation and improving customer service and responsiveness. SAP
Supply Chain Management (SAP SCM) enables collaboration, planning, execution,
and coordination of the entire supply network, empowering you to adapt your
supply chain processes to an ever-changing competitive environment.
 Supplier Relationship Management: - With SAP SRM you can examine and forecast
purchasing behaviour, shorten procurement cycles, and work with your partners in
real time. This allows you to develop long-term relationships with all those suppliers
that have proven themselves to be reliable partners.
 Governance, Risk and Compliance: - Risk is unavoidable, but it can be managed.
With governance, risk, and compliance (GRC), businesses can strategically balance
risk and opportunity.
 Sales and operations planning: - SAP Sales and Operations Planning enables you to
optimally and profitably meet long-term future demand. Typically, this process
repeats every month and involves many participants including Sales, Marketing,
Finance, Demand Planning, and Supply Chain Planning.
 SAP Transportation Management: - It supports you in all activities connected with
the physical transportation of goods from one location to another.
 Extended Warehouse Management: - SAP Extended Warehouse Management gives
you the option of mapping your entire warehouse complex in detail in the system,
down to the storage bin level. Not only does this give you an overview of the total
quantity of a product in the warehouse, but you can also always see exactly where a
specific product is, at any time, in your warehouse complex. With EWM, you can
optimize the use of various storage bins and stock movements, and can combine the
storage of stocks from several plants in randomly-managed warehouses.
 Mobile Apps: - Mobile devices can also access SAP system.

SAP ERP Functional & Technical Modules

SAP Modules can be categorized into

 Functional Modules
 Technical Modules

These functional and technical modules are tightly coupled. Below is a list of key SAP
Modules

1. SAP FI Module - FI stands for Financial Accounting

SAP FI module is very robust and covers almost all financial business process encountered in
various industries. It is one of the widely implemented modules in SAP. Learn more
about SAP FI

2. SAP CO Module - CO stands for Controlling

Cost Accounting (CO) module of SAP provides information to managers decision makers to
understand where the company's money is being spent. CO helps them to optimize business
costs.

3. SAP HCM Module - HR stands for Human Resources

SAP Human Capital Management (HCM) is also called SAP-HR. SAP HCM consists of sub-
modules like Personnel Administration (PA), Organizational Management (OM), Time, and
Payroll that help in employee management. Learn more about SAP HCM

4. SAP MM Module - MM is Materials Management

Materials Management module in SAP consists of several components and sub-components

including Master Data, Purchasing, and Inventory. Learn more about SAP MM

5. SAP QM Module - QM stands for Quality Management

SAP QM (Quality Management) is an integral part of several key business processes of SAP
like production, sales, procurement, material management, etc. Learn more about SAP QM

6. SAP PP Module - PP is Production Planning

SAP PP (Production Planning) is a SAP module, specially designed for integrating different
department involved in production and manufacturing. It has various components like Data
Center, BOM, Work Center, CRP etc. Learn more about SAP PP

7. SAP SD Module - SD is Sales and Distribution

SAP Sales and Distribution (SD) is an important module of SAP ERP consisting of business
processes required in selling, shipping, billing of a product. The module is tightly integrated
with SAP MM & SAP PP. Key sub-modules of SAP SD are Customer and Vendor Master Data,
Sales, Delivery, Billing, Pricing and Credit Management. Learn more about SAP SD

8. SAP BW Module - where BW stands for Business (Data) Warehouse

SAP BI (Business Intelligence) or SAP BW is a leading data warehousing and reporting tool. It
helps convert raw data into information and insights that help improve business margins.
Learn more about SAP BW

9. SAP Basis -
SAP Basis is a set of programs and tools that act as an interface with Database, Operating
system, communication protocols and other SAP modules like FI, HCM, SD etc. Learn more
about SAP Basis

10. SAP ABAP -

ABAP (Advanced Business Application Programming) is the default programming language

for SAP applications. You can also use Java to code in SAP. Learn more about SAP ABAP

11. SAP CRM - where CRM stands for Customer Relationship Management

SAP CRM is the Market Leader in Customer Relationship Management Software. SAP CRM
plays a pivotal role in strengthening customer relationships. Learn more about SAP CRM

12. SAP HANA - where Hana stands for High-performance Analytic Appliance.

SAP HANA is an in-memory computing platform that allows real-time data analysis. It’s
currently the market leader in BI.Learn more about SAP HANA

13. SAP EC Module - where EC stands for Enterprise Controlling

14. SAP TR Module - where TR stands for Treasury
15. SAP IM Module - where IM stands for Investment Management
16. SAP IS -where IS stands for Industries Specific Solution
17. SAP PS Module- and PS is Project Systems
18. SAP CAC - Cross Application Components
19. SAP SCM- where SCM stands for Supply Chain Management
20. SAP PLM- where PLM stands for Product Lifecycle Management
21. SAP SRM- where SRM stands for Supplier Relationship Management
22. SAP CS- where CS stands for Customer Service
23. SAP SEM - where SEM stands for STRATEGIC ENTERPRISE MANAGEMENT
24. SAP RE - where RE stands for Real Estate
25. SAP PM Module- where Plant Maintenance is the PM
26. SAP Security Learn more about SAP Security
27. SAP FSCM - where FSCM stands for Financial Supply Chain Management
28. SAP Net Weaver
29. SAP IS - where IS stands for Industry Specific Solution
30. SAP XI - where XI stands for Exchange Infrastructure
31. SAP Solution Manager – Learn more about Solution Manager
32. SAP LE - where LE stands for Logistics Execution
33. SAP APO- where APO stands for Advanced Planning and Optimization
34. SAP AFS - where AFS stands for Apparel and Footwear Solution
35. SAP CC - where CC stands for Convergent Charging
36. SAP ITS - where ITS stands for Internet Transaction Server
37. SAP ICM - where ICM stands for Incentive and Commission Management
38. SAP KW - where KW stands for Knowledge Warehouse
39. SAP MDM - where MDM stands for Master Data Management
Introduction to SAP QM

SAP is an enterprise-wide Business Software Package designed to integrate each area of a

business.

Through SAP, all business processes can be fully integrated with each other. This means that
all the businesses processes in the company are "inter-connected" in the SAP system, and
changes in one department or process would have an impact on other departments.

 SAP is as an on-line, Real Time system. Thus, information pertaining to the business
is up-to-date and available for others to use immediately and take action when
required.
 SAP act as a single source and set of information.
 SAP is a leading enterprise package software in the market
 There are many modules in SAP like SAP SD, MM, PP, QM, FICO, PM, WM and HR,
etc. which are interconnected with each other.

What is SAP QM or Quality Management?

SAP QM is a key module of SAP ERP and can be used for following

Quality planning

 Basic master data for Quality Management

 Inspection planning using inspection plans of materials, which brings standardization
of quality planning.

Quality assurance

 SAP Quality inspection is performed through inspection lot processing. During this
process quality results are captured, and usage decision is taken to accept or reject
the inspection lot.
 Quality certificates of analysis

Quality control

 In SAP QM Quality notifications the root cause analysis is done for the identified
defect.
 SAP QM information system is where you can analyze various reports like vendor
evaluation, a list of quality notification, quality charts, etc.

SAP QM- Business Processes

1. Quality Management in Procurement

SAP Quality Management is fully integrated with the purchasing and Inventory Management
process.
It consists of receiving inspection wherein material is received against the purchase order.
Inspection lot is triggered if the material is flagged for quality check.

Quality results are entered against master inspection characteristics. Whether the results
are within/out of tolerance limits, based on that usage decision (accept/reject inspection
lot) is taken.

Stock posting from quality to other stock categories needs to be done subsequently in SAP
system.

2. Quality Management in Production

SAP Quality Management is used to connect with the production and Inventory
Management process.

It describes "In process inspections" where inspection lot is triggered on production order
release.

In "inspection after production", inspection lot is triggered after goods receipt is posted
from production order.

"In process inspections" are not relevant to inventory whereas inspection after production
involves stock posting from quality to other stock categories.

This process describes inspection lot processing wherein quality results are entered against
master inspection characteristics. Usage decision (accept/reject) is taken depending on the
quality results.

3. Quality Notifications

In this process, you can see how defects found during a quality inspection are analysed and
captured in a SAP quality notification.

Here, we do record the root cause analysis of the problems found during inspection to avoid
its re-occurrence.

For SAP QM in process inspections also, we can raise internal quality notification and record
our problem analysis.

Benefits of SAP QM

SAP QM provides lot of benefits for any company at various levels, for example through:

 Quality integration with procurement and production and hence more control over
the process.
 Planning support ( usage of inspection plans )
 Monitoring of vendor and customer complaints by implementing corrective tasks in
SAP QM quality notifications.
  Automation of quality certificates which are printed during sales delivery to
customers.

Next, we will look into each phase of SAP QM and learn how to operate SAP QM module.

What is Master Data in SAP? QS21, QP01, QS31, QDV1, QI01

Within the SAP Quality Management module and for other SAP applications we need to
maintain the data pertaining to inspection planning and inspection lot processing.

Before you create an inspection lot and record inspection results, basic SAP master data for
inspection planning should be maintained.

Following SAP QM master data should be set up before inspection of any material.

Master Inspection Characteristics (MIC)

Master Inspection characteristics are required to describe the inspection specifications for
materials like length, width, viscosity, etc.

We create master inspection characteristics at the plant level to simplify and standardize
the inspection planning activities.

It also helps to organize the master inspection characteristics in order to avoid duplicate
creation of MIC.

These characteristics can be used in Routings, Master Recipe, Inspection Plan and
maintenance task list. We can also create the different versions for the single MIC.

Inspection method and catalog could be attached to inspection characteristics.

The below are the types of Master Inspection characteristics available in SAP.

a) Quantitative

Quantitative characteristics are used to record the results of the Quantitative inspection.

Values of inspection can be directly feed to these type of characteristics while performing
results recording. Characteristics specification limits like Upper Limit, Lower Limit, and
central limits can be defined for each inspection characteristics at master level or while
creating an inspection plan.

Inspection Method can also be attached to inspection characteristics level.

b) Qualitative

Qualitative characteristics are used to record the results of Attribute inspection like "Ok" or
"Not ok".
Code groups / selected sets of Catalog type 1 can be used for recording result against
Qualitative inspection characteristics. Appropriate inspection method can be attached to
inspection characteristics.

Inspection Methods

The inspection methods describe the procedures for carrying out inspections.

You can assign an "inspection method" to a master inspection characteristic or directly to an

inspection characteristic in an inspection plan.

Inspection method can also be created in one plant, and the same can be used in the
inspection plan for another plant by using the original plant of inspection method.

Sampling Procedure

The sampling procedure is the procedure by which the sample size for an inspection lot is
determined. It can be used in inspection plans.

The sampling procedure can be a fixed sample, percentage sample, 100% or using sampling
scheme. Sample scheme is the collection of sampling plans.

A sampling plan defines the sample size based on a specific inspection lot quantity and
defines the criteria for determining whether and how a sample is accepted or rejected.

Depending on the business requirement sampling size is determined. For example, if a batch
of the drug needs to be tested, depending on the quantity of the drug manufactured, the
sampling for inspection is planned.

Inspection Plan

Defining inspection plan is necessary if you want to capture quality result it is used,

 To define inspection methodology, for example,

o Materials to be inspected
o How the inspection of materials need to be taken place
o What characteristics to be inspected, work center and inspection
specifications.

 Inspection plans define how a quality inspection of one or multiple materials will be
taken place. In the inspection plan, we define the

Sequence of inspection operations and the range of specifications available for

inspecting master inspection characteristics, sampling procedure to calculate the
sample size for inspection, Inspection method to inspect the MIC, etc.

 The "status" and "usage" can be maintained for the inspection plan to check
whether the plan is active or inactive. We can identify the inspection plan by using
 group number (client level) and group counter (plant level) generated by the SAP
system. Multiple materials can be attached to one plan provided the parameters to
be inspected are same.

Quality Info record

Quality Info record is maintained for a "material –vendor relationship." It is used to block
the material from procurement through a certain vendor when the quality of the product is
compromised supplied by the particular vendor.

In this SAP master, we will maintain the quality system for the combination of vendor and
material.

This SAP master will become mandatory only if the QM Procurement key is active in the
material master.

When a quotation or purchase order is created, the SAP system checks whether a Q-info
record is required and available for the combination of material and vendor.

A check is made to determine whether the purchase order can be released based on the Q-
info record.

Quality information record need to be maintained if we would like to use the source
inspection functionality which means, materials will undergo an inspection prior to the
material reaches the plant for Goods Receipt (GR).

This inspection will be purely based on the purchase order created in the SAP system against
a material – vendor – plant combination. There will not be any GR (Goods Receipt)
inspection if the material is already cleared through the source inspection.

Q info record is also useful in scenarios where inspection is restricted. Which means that the
inspection should be continued if it is procured from "xyz" vendor but not in the case when
it is procured by some "abc" vendor.

In this tutorial, you will learn-

 How to create Master Inspection characteristics

 How to create Inspection Methods
 How to create Sampling procedure
 How to create Inspection Plan
 How to create Quality Info Records

How to create Master Inspection characteristics

Step 1) From SAP Easy access menu, open Transaction code QS21

1. Enter Plant Code.

 2. Enter master inspection characteristic code which needs to be created.

3. Enter the Key date (valid from date) which means that MIC would be valid from that
date.

After filling in all the fields, click or press Enter to go to the next screen.

Step 2) In this step, we will maintain Master inspection characteristic general data as given
below.

1. Tick the checkbox for quantitative if we are creating quantitative characteristic which
can be measured.

2. Enter Status as "Released."

3. Enter "Complete copy model" as the MIC data needs to be maintained completely.

4. Enter the Short text of your choice.

5. Press Control indicators button to maintain other important data like lower and
upper limits i.e. specification range in which material would be accepted.
Step 3) In this step, after pressing control indicator button, the small screen will pop up
where we will maintain the lower and upper limit data.

1. Flag the checkbox for Lower specification limit.

2. Flag the checkbox for upper specification limit.

3. Flag the checkbox for sampling procedure as we would use sampling procedure for
this MIC.
Press enter to move to the next SAP screen.

Step 4) In this step, we will maintain absolute lower and upper limit data.

1. Input number of decimal places and measurement unit for MIC

2. Input the lower spec limit as 4

3. Input the upper spec limit as 4.5.

Press enter to move to the initial SAP screen and save the data. You will see the message
as .

How to create Inspection Methods

Step 1) From SAP Easy access menu, open Transaction code QS31

1. Enter Plant Code.

2. Enter inspection method code which needs to be created.

3. Enter the valid from the date which means that inspection method would be valid
from that date.

Press enter to move to the next SAP QM screen.

Step 2) In this SAP QM screen,

1. Enter status as "released".

2. Enter the short text of the inspection method and search field for searching for
inspection methods.

Press save button to save the inspection method.

How to create Sampling procedure

Step 1) From SAP Easy access screen open Transaction QDV1

1. Input sampling procedure code which we need to create.

Step 2) After filling in all the fields, click (right mark sign) sign from the top menu to go to
the next SAP screen.

1. Choose sampling type as "Fixed sample" but you can also select 100% inspection or
sampling scheme.
 2. Select Valuation mode "Attributive inspection non confirming units" which defines
the rules for accepting and rejecting characteristic.

3. Press next button to move to the next SAP screen.

Step 3) In this SAP screen,

1. Press "Sample" button which will open a small pop-up screen to define the sample
size.

2. Define the sample size as "5".

Press save button to save the sampling procedure.

How to create Inspection Plan

Step 1) From SAP Easy access screen open Transaction QP01

1. Input material code which we need to create an inspection plan.

2. Enter Plant code.

3. Enter the key date (valid from) from which inspection plan would be valid.
Press enter button from the keyboard to move to next screen.

Step 2) In this SAP screen, we will maintain header data

1. Input usage as "5" which means inspection plan will be valid for goods receipt and
status as "4" which means the plan is released.

2. Enter lot size as "99999999" which means inspection plan is valid for inspection lot
quantity of 99999999.

3. Press "operations" button to move to the next screen.

Step 3) In this SAP screen, we will maintain operation-data where inspection characteristics
will be maintained.

1. Input the Quality lab work center.

2. Enter the control key as "QM01" which means the operation is meant for quality
check.

3. Press "Inspection Characteristics" button to move to the next SAP screen.

Step 4) In this SAP screen, we will maintain inspection characteristics for the operation

1. Input the Master inspection characteristic name "MOIST".

2. Enter the Inspection method.

3. Input sampling Procedure to determine the sample.

After entering all fields, Lower and upper limits are populated automatically.

Press save button to save the inspection plan for the material.

How to create Quality Info Records

Step 1) From SAP Easy access screen open Transaction QI01

1. Input the material code which we need to create quality info records.

2. Enter vendor code.

3. Input the plant code.

Press enter button from the keyboard to move to the next screen.

Step 2) In this SAP screen, we will maintain release date

1. Input Release until this date which means the material can be ordered from the
vendor till release date.

2. Enter Block function if you want to block this material to be ordered from this
particular vendor.
Press Insp. Control-Tab to move to the next screen.

Step 3) In this SAP screen, we will maintain inspection control data.

1. Input the Inspection control as "No Inspection" if you do not want to inspect the
material for this particular vendor.

2. If you want to use source inspection, then flag the checkbox for source inspection
and enter source inspection type as "01" else keep it blank.
Press save button to save the quality info record.

Troubleshooting

 Before creation Inspection plan and quality info records, master inspection
characteristic, sampling procedure, inspection method, material master, vendor
master should be available in the SAP system.

SAP QM Incoming/Raw Material Inspection Procedure: MIGO, QA32

Incoming inspection is generally called as Raw Material Inspection received against

purchase order in SAP. This inspection will be activated in the raw material by maintaining
SAP QM data in Material Master.

To identify the triggering of inspection based on the business process, inspection types are
maintained in SAP.

Incoming inspection has following steps to follow in SAP system, like

 Creation of inspection lot at

goods receipts against purchase
order

A good receipt will happen in the procurement process as a part of purchasing. Good receipt
generally occurs against a purchase order or schedule agreement.

Against each GR line item, the SAP system will automatically generate one inspection lot
which contains details of the purchase like vendor, date of purchase, inspection
specifications and sampling details.

 Listing of Inspection lot

To list Inspection lots, you may use the transaction code QA33. The search criteria can be

1. Material (s)
2. Inspection lot creation date
3. Inspection dates
4. Plant
5. Inspection type
6. Batch
7. Vendor

 Attaching inspection plan and release the inspection lot

If only one inspection plan with task list type '05' (Goods receipt inspection) is
available for the material in released status, the SAP system automatically assigns
 the plan to the material. If more than one inspection plan exists for the material, we
have to,

1. Assign the proper inspection plan to the material

2. Calculate the sample
3. Release the lot for inspection processing.

 Sample calculation

If sampling procedure is attached with the inspection plan / material /

characteristics, the SAP system will automatically calculate the sample otherwise
manually go to the lot and calculate the sample.

 Result recording

Result recording will be done against the inspection lot created at the time of Goods
Receipt.

All the characteristics will be shown in the SAP recording screen for input. The SAP
system will give an f4 search for getting code values for attribute inspection.

For quantitative data, based on tolerance limit (upper and lower), the SAP system
will propose the valuation. In both cases, the inspector can accept or reject the
proposal (Manually).

 Usage Decision

When we make the usage decision, you decide whether to accept or reject the goods
in the inspection lot based on the results of the inspection. Once you have made the
usage decision, the inspection is completed.

 Stock posting

If inventory management is in place at the time of usage decision, we can transfer

the Quality stock into relevant stock categories like,

1. Unrestricted usage
2. Blocked
3. Scrap
4. Different material
5. Sample
6. Return to vendor

How to post Goods receipt against Purchase order

In this transaction, we will post goods receipt against purchase order which will trigger
inspection lot.
Step 1) From SAP Easy access menu, open Transaction code MIGO, and enter the following
details.

1. Select Goods receipt from the drop down box.

2. Select Purchase order from drop down box.

3. Enter purchase order number.

After filling in all the fields, click or press Enter to go to the next SAP screen.

Step 2) In this step, we will post goods receipt against the purchase order.

1. You can see the stock type as "quality inspection" is generated automatically as the
material is subjected to quality inspection.

After saving the SAP screen by clicking save button, the material document will be posted.

After posting the material document for Goods receipt against a purchase order, the next
step is the quality result recording.

How to do Result Recording

Step 1) From SAP Easy access menu, open Transaction code QA32.

Here, we will inspect the material and record the results against inspection specification.

1. Enter Plant Code.

2. Enter inspection lot origin as "01" which is standard SAP inspection type used for raw
material inspection.

3. Press Execute to display the list of inspection lot.

Step 2) In this SAP screen,

1. You can see the inspection lot generated in earlier steps along with material

2. Check the SAP system status as REL CALC SPRQ which indicates that Inspection plan
is copied in inspection lot, sample size calculated and stock posting required from
quality stock to unrestricted or any other stock category.

3. Press "Results" button and move to next SAP screen to do results recording.

Step 3) In this SAP screen, you will see the result of inspection lots
 1. You can see the short text of the Master Inspection characteristics along with
specifications like length, surface, visual, etc.

2. You can see a sample size of 5 calculated automatically by the system if sampling
procedure is assigned in the inspection plan.

3. Enter your actual results against the inspection specifications.

Press save button to save the inspection results.

How to do usage decision

Step 1) From SAP Easy access screen open same Transaction QA32 with which we have done
results recording in the previous step.

Here, we will do usage decision against inspection lot whether the lot is accepted or
rejected and move the stock from quality inspection.

1. Enter Plant Code in this SAP Screen.

2. Enter inspection lot origin as "01" which is a standard SAP inspection type used for
raw material inspection.

3. Press execute button to display the list of inspection lot along with lot quantity.
Step 2) In this SAP screen,

1. Press usage decision button to move to next SAP screen

Step 3) In this SAP screen,

1. Select UD code as "A" for acceptance of the lot and you can see the quality score as
"100" based on Usage Decision code.

2. Select Inspection lot stock TAB to do stock posting in next SAP screen.
Step 4) In this SAP screen, we will do stock posting from quality stock to any other stock
category.

1. We can move the quality stock of 200 to unrestricted stock (ready for use stock) if
the quality results are within expected specifications, which hits movement type 321
in the background. (Movement Type 321 indicates the movement of quality stock to
unrestricted stock).

Press save button to save the usage decision.

Thus, the stock movement from quality inspection to unrestricted stock, as shown above,
indicates the completion of Raw Material Inspection.

In the next SAP QM tutorial, we will see how to perform "In process Inspection".

Troubleshooting

 Inspection plan must be copied to inspection lot, without which we will not be able
to do result recording and usage decision.
 If inspection plan is created after inspection lot, then inspection lot will get CRTD
status. We need to manually assign inspection plan to change status from created
(CRTD) to released (REL). After Inspection lot is released, then we can perform result
recording and usage decision.
 The sampling procedure must be assigned in the inspection plan to do any result
recording and usage decision else manually we need to calculate the sample in the
inspection lot.

In-Process Inspection SAP QM: CO01 & QA32

In-process inspection (time-based) is used for recording the result for an in-process quality
check for the intermediate and finished product during the production process.

For example, inspection in every two hours, inspection per shift, etc. We will be discussing
this moving forward.

The "In process inspection" lot will have a reference/ link to a production order in SAP
system.

The routing operation will contain the inspection characteristics which are needed to be
inspected during the in-process checks.

Inspection lot will be generated at the time of production order release. The inspection type
for in-process inspection is '03'.

NOTE: This type of inspection will not control the inventory, but control the production
process.

In-process inspection has following process steps, like

 Creation of inspection lots at process Order release

Inspection lot creation in SAP system will be generated automatically at the time of
production order release.

 Listing of Inspection lot

To list Inspection lots, you may use the transaction code QA33. The search criteria can be,
 1. Material (s)
2. Inspection lot creation date
3. Inspection dates
4. Plant
5. Inspection type 03

 Assign Task list to inspection lot

Task list will be automatically assigned from the routing of material.

 Sample calculation

If sampling procedure is attached with the characteristics in the quality operation of the
master recipe, the SAP system will automatically calculate the sample during the time of lot
creation / plant assignment in case of multiple plans available for a material.

 Result recording

Result recording will be done against the inspection lot created against the production
order.

All the characteristics will be shown in the SAP recording screen for input. The SAP system
will give an f4 search for getting code values for attribute inspection.

For quantitative data, based on tolerance limit (upper and lower), the SAP system will
propose the valuation. In both cases, the inspector can accept or reject the proposal
(Manually).

 Usage Decision

When we make the usage decision, you decide whether to accept or reject the goods in the
inspection lot based on the results of the inspection. Once you have made the usage
decision, the inspection is completed. Stock posting is restricted to the in-process
inspection.

How to create and release production Order

In this SAP transaction, we will create and release production order, which will trigger
quality inspection lot in SAP system.

Step 1) From SAP Easy access menu, open Transaction code CO01, and enter the following
details.

1. Input the material code for which production order needs to be created.

2. Input production plant in SAP screen.

3. Enter your production Order type.

After filling in all the fields, click or press Enter to go to the next SAP screen.

Step 2) In the next SAP screen enter following details.

1. Input the production quantity in SAP screen.

2. Select "Current date" from the drop down box.

3. Press "release" button to release the order.

Now, we will check if inspection lot has been generated by clicking "Assignment" tab and
moved to the next SAP screen.

Step 3) In this SAP screen,

1. You can see the inspection lot triggered on the release of production Order.

After checking the inspection lot, save the order by clicking save button.

How to do Result Recording

Step 1) From SAP Easy access menu, open Transaction code QA32.

Here, we will do in process inspection of the material and record the results against
inspection specification.

1. Enter Plant Code in SAP screen.

 2. Enter inspection lot origin as "03" which is standard SAP inspection type used for in-
process inspection.

3. Press Execute to display the list of inspection lot.

Step 2) In this SAP screen,

1. You can see the inspection lot generated in earlier steps along with material

2. Check the SAP system status as REL CALC which indicates that inspection
specifications are copied in inspection lot and the sample size is calculated. We
cannot see SPRQ status (Stock Posting) here, as it is not applicable/required to
transfer quality stock to any unrestricted or other stock category for in process
inspection.

3. Press "Results" button and move to next SAP screen to do results recording.

Step 3) In this SAP screen, you will see the result of inspection lot is generated.

1. You can see the short text of the qualitative Master Inspection characteristics like
"Visual."

2. You can see a sample size of "5" calculated automatically by the SAP system if
sampling procedure is assigned in the inspection plan.

3. Enter your actual results manually against the inspection specifications.

Press save button to save the inspection results.

How to do usage decision

Step 1) From SAP Easy access screen, open same Transaction QA32 with which we have
done results recording in the previous step.

Here, we will do usage decision against inspection lot, and the decision is taken whether
inspection lot should be accepted or rejected.

Follow the following steps in SAP screen,

1. Enter Plant Code.

2. Enter inspection lot origin as "03" which is a standard SAP inspection type used for in
process inspection.

3. Press execute button to display the list of inspection lot along with lot quantity.
Step 2) In this SAP screen,

1. Press usage decision button to move to next screen

Step 3) In this SAP screen,

1. Select UD code as "A" for acceptance of the lot and you can see the quality score as
"100" based on Usage Decision code. You can see that there is no "Inspection lot
stock" tab to do any stock posting as we saw in the raw material inspection.

Press save button to save the usage decision and hence in process inspection is completed.
In next SAP QM tutorial, we will see how to perform final Inspection after production.

Troubleshooting

 Inspection characteristics from routing data must be copied to inspection lot,

without which we will not be able to do result recording and usage decision.
 If inspection characteristics are added in routing after inspection lot, then inspection
lot will get CRTD status. In such case, we need to manually assign inspection
specifications to change status from created (CRTD) to released (REL). After
Inspection lot is released, then we can perform result recording and usage decision.
 The sampling procedure must be assigned in the inspection plan to do any result
recording while the usage decision is done manually. We need to calculate the
sample in the inspection lot.

SQP QM: Final Inspection CO01 & QA32

Inspection against Production GR- this inspection will be based on production confirmation
against a production order.

The inspection lot (with inspection type 04) will be created at the time of Good receipt
against production order.

The SAP system will generate a unique inspection lot which will have the information of
production order, Inspection specification and sampling.

A separate lot will be generated for each GR line items (batch) in the confirmation.

The stock will remain in Quality inspection stock until the inspection is completed (Usage
decision is made).

Final inspection after production has following process steps in SAP system, like

 Creation and Confirmation of Production Order

A good receipt will happen in the procurement process as a part of purchasing. Good receipt
generally occurs against a purchase order or schedule agreement.

Against each GR line item, the SAP system will automatically generate one inspection lot
which contains details of the purchase like vendor, date of purchase, inspection
specifications and sampling details.

 Listing of Inspection lot

To list Inspection lots, you may use the transaction code QA33. The search criteria can be,

1. Material (s)
2. Inspection lot creation date
3. Inspection dates
 4. Plant
5. Inspection type "04"
6. Batch

 Attaching inspection plan and release the inspection lot

The SAP system automatically assigns the inspection plan to the material with task list type
'05' (Goods receipt inspection). If more than one inspection plan exists for the material, we
have to

1. Assign the proper inspection plan to the material

2. Calculate the sample
3. Release the lot for inspection processing.

 Sample calculation

If sampling procedure is attached with the inspection plan / material / characteristics, the
SAP system will automatically calculate the sample otherwise manually go to the lot and
calculate the sample.

 Result recording

Result recording will be done against the inspection lot created at the time of Goods
Receipt.

All the characteristics will be shown in the SAP recording screen for input. The SAP system
will give an f4 search for getting code values for attribute inspection.

For quantitative data, based on tolerance limit (upper and lower), the SAP system will
propose the valuation. In both cases, the inspector can accept or reject the proposal
(Manually).

 Usage Decision

When we make the usage decision, you decide whether to accept or reject the goods in the
inspection lot based on the results of the inspection. Once you have made the usage
decision, the inspection is completed.

 Stock posting

In Final inspection after production, inventory management is in place at the time of usage
decision, and we can transfer the Quality stock into relevant stock categories like,

1. Unrestricted usage
2. Blocked
3. Scrap
4. Different material
5. Sample
 6. Return to vendor

How to create and confirm Production Order

In this step, we will create and confirm production order which will trigger automatic goods
receipt and hence inspection lot would be generated.

Step 1) From SAP easy access menu, open Transaction code CO01, and enter the following
details.

1. Enter Material Code for which you want to create production order.

2. Enter your production plant code.

3. Enter production order type.

After filling in all the fields, click or press Enter to go to the next SAP screen.

Step 2) In this SAP screen, we will create the production order.

1. Enter the production order quantity.

2. Select "current date" from drop down box and press enter from the keyboard.

3. Press "Release" button from top to release the order.

4. Press "Goods Receipt" tab to check if the quality inspection is activated or not.
If it is activated, you will see "quality inspection" stock will be populated against stock type
in next step.

Step 3) In this SAP screen, we will check quality inspection flag in the production Order.

1. You can see stock type as "quality inspection" which means after confirmation and
goods receipt of production order, inspection lot would be triggered, and the stock
will hit quality inspection stock.
After saving the screen by clicking save button, Production order will be created.

Step 4) From SAP Easy access menu, open Transaction code CO11N.

Here, we will confirm and post goods receipt against production order.

Enter below details

1. Enter the production order number created in the previous step. After entering
order number, all details would be populated automatically.

2. Press "Goods Movement" tab to move to next screen, where we will post goods
receipt and goods issue of components.

Step 5) In this SAP screen,

1. You can see Goods receipt would be posted for material S-1003 for 20 EA, which
would trigger inspection lot.
Click save button to Save the Order.

After posting confirmation and Goods receipt against production order in SAP system, the
next step is the quality result recording.

How to do Result Recording in SAP System

Step 1) From SAP Easy access menu, open Transaction code QA32.

Here, we will inspect the material and record the results against inspection specification.

1. Enter Plant Code in SAP screen.

2. Enter inspection lot origin as "04" which is standard SAP inspection type used for raw
material inspection.

3. Press Execute to display the list of inspection lot.

Step 2) In this SAP screen,

1. You can see the inspection lot generated in earlier steps along with material
 2. Check the SAP system status as REL CALC SPRQ. This status is a confirmation for the
activities like,

 Inspection plan is copied in inspection lot

 Sample size calculated and stock posting required from quality stock to
unrestricted or any other stock category.

3. Press "Results" button and move to next SAP screen to do results recording.

Step 3) In this SAP screen, you will see the result of inspection lots

1. You can see the short text of the Master Inspection characteristics along with
specifications like length, surface, visual, etc.

2. You can see a sample size of 5 calculated automatically by the system if sampling
procedure is assigned in the inspection plan.

3. Enter your actual results manually against the inspection specifications.

Press save button to save the inspection results.

How to do usage decision

Step 1) From SAP Easy access screen open same Transaction QA32 with which we have done
results recording in the previous step.

Here, we will do usage decision against inspection lot. The inspection lot is either accepted
or rejected if accepted it will be moved from the quality inspection to stock posting.

1. Enter Plant Code.

2. Enter inspection lot origin as "04" which is a standard SAP inspection type used for a
final inspection after production.

3. Press execute button to display the list of inspection lot along with lot quantity.

Step 2) In this SAP screen,

1. Press usage decision button to move to next screen

Step 3) In this SAP screen,

1. Select UD code as "A" for acceptance of the lot and you can see the quality score as
"100" based on Usage Decision code.

2. Select Inspection lot stock TAB to do stock posting in next SAP screen.
Step 4) In this SAP screen, we will do stock posting from quality stock to any other stock
category.

1. We can move the quality stock of 20 to unrestricted stock (ready for use stock) if the
quality results are within expected specifications, which hits movement type 321 in
the background. (Movement Type 321 indicates the movement of quality stock to
unrestricted stock).
Press save button to save the usage decision.

Thus, the stock movement from quality inspection to the unrestricted stock category, as
shown above, indicates the completion of Inspection after production.

In next tutorial, we will see how to create quality notifications.

Troubleshooting

 Inspection plan must be copied to inspection lot, without which we will not be able
to do result recording and usage decision.
 If inspection plan is created after inspection lot, then inspection lot will get CRTD
status. We need to manually assign inspection plan to change status from created
(CRTD) to released (REL). After Inspection lot is released, then we can perform result
recording and usage decision.
 The sampling procedure must be assigned in the inspection plan to do any result
recording and usage decision in a case where manually you need to calculate the
sample in the inspection lot.

Quality Notification in SAP QM: QM02

SAP QM Quality Notification contains functions for capturing and processing different types
of problems or defects which are identified during inspection (for example, defects resulting
from poor-quality goods).

 SAP QM Quality notifications are

utilized to analyze the recorded
defects and perform root cause
analysis of these problems.

In particular, the SAP QM notifications can help you to process internal and external
problems such as:

 External Complaints filed by customers

This is standard SAP quality notification type Q1 that deals with the problem associated with
quality of goods delivered to the customer. This is used to record customer complaint and
take action against the problem reported by the customer.

 External Complaints against vendors

This is standard SAP QM quality notification type Q2 that deals with the problem associated
with quality of goods delivered by the vendor. This is used to record a complaint against
vendor and take action against the problem identified during an incoming quality inspection
of materials.

 Company-internal problems

This is standard SAP QM quality notification type Q3 that deals with the problem associated
with quality of goods which is originated inside the company. This is used to record internal
problems, which are identified during in-process quality inspections in the shop floor.

The SAP QM quality notifications contain various features and functions.

In general, SAP quality notification can be used to:

 Elaborate a problem and identify the affected reference objects (for example,
material, vendor, manufacturer, and customer)
 Record and store the names of all personnel (partners) who are directly associated
with the defect.
 Define processing specifications for the SAP QM quality notification (for example,
mentioning a time range within which the defect should be fixed and allocating a
priority to the notification)
 Capture individual Defect items pertaining to the problem and analyze the root
causes of the defect.
 Mention the corrective actions to be taken (for example, tasks that are executed
immediately or corrective activities that are executed after a deep analysis of the
defects)
  Track the implementation of corrective actions through status management features
of notification. It has a various status such as release, put in process and completed.
 Capture all activities and tasks that have been carried out for the problem
rectification.
 Document the nonconformity costs incurred during analysis and resolving a problem.
 Various types of reports pertaining to the problem can be printed, faxed and
exported.

How to record defects and create quality notification

In this step, we will record the defects when quality results are out of tolerance limits after
doing the analysis in SAP system.

Step 1) From SAP Easy access menu, open Transaction code QA32, and enter the following
details.

1. Select the inspection lot in which results are recorded and have SAP system status as
"RREC."

2. Press "Defects" button from the top of the SAP screen.

After pressing defects button, we will move to the next SAP screen.

Step 2) In this SAP screen,

1. Select the code group "Length" and Code "Too Long" which is the Defect we have
found after doing the analysis.
Step 3) In this SAP screen,

1. You can see the material code and inspection lot against which we have created the
defects.

2. You can see the Defect code length which is "too long."

3. Press "Notification Button" on top to create a quality notification.

You will get the message as "quality notification created".

How to release & complete notification

Step 1) From SAP Easy access screen open Transaction QM02.

Here, we will release and record the tasks & activities to complete the quality notification.
 1. Enter quality notification number which we have created in the previous step.

Press Enter button from the keyboard to move to the next SAP screen.

Step 2) In this SAP screen,

1. You can see the Purchase order number against which we have received the
defective goods.

2. You can see the inspection lot which is linked with the purchase order number.

3. Press "Items" Tab to move to the next SAP screen.

Step 3) In this SAP screen,

1. You can see the Defect code as "too long" which we have entered in previous steps.
 2. Press release button to release the notification.

3. Press "causes" button to define the cause of the problem and move to next SAP sub
screen.

Step 4) In this SAP screen, we need to mention the cause of the identified defect.

1. Here, select code group "QM" for the cause which means it is a design fault.

These code groups are configured based upon the business requirements.

2. Press "Tasks" button to move to the next SAP sub screen.

Step 5) In this SAP screen, we need to mention the tasks to be performed after
identification of a defect.

1. Here, select code group "QM- G2" for the tasks, which means rework needs to be
done. These code groups are configured based upon the business requirements.

2. Press "Activities" tab to move to the next SAP sub screen.

Step 6) In this SAP screen, we need to mention the activities to be performed after
identification of a defect.

1. Here, select code group "QM- G2" for the activities which means a special complaint
to be filed against the vendor. These code groups are configured based upon the
business requirements.

2. Press "complete" button to complete the notification process.

Troubleshooting

 Inspection plan must be copied to inspection lot, without which we will not be able
to do result recording and usage decision.
 If inspection plan is created after inspection lot, then inspection lot will get CRTD
status. And we need to manually assign inspection plan to change status from
created (CRTD) to released (REL) in SAP system. After Inspection lot is released then
only, we can perform result recording and usage decision.
 The sampling procedure must be assigned in the inspection plan to do any result
recording and usage decision or else manually we need to calculate the sample in
the inspection lot.
 Code groups and codes need to be configured which depends on the business needs
to process quality notifications.