The document details the significance and integration of SAP Quality Management (QM) within production planning processes, highlighting the evolution of QM software and its core functionalities such as quality planning, inspection, and control. It explains the differences in QM applications across various manufacturing strategies, including discrete, repetitive, and process industries, and outlines critical customization tasks necessary to integrate QM effectively. The presentation emphasizes the importance of compliance with industry standards and the allocation of resources to support accurate master data for successful QM implementation.

1. SAP Quality Management (QM):
When to Leverage It, How to Set
It Up, and How to Integrate It
with Your Current Production
Planning Processes
Murali K Nookella

2. What This Session Will Cover, and Why! (cont.)
• QM is increasingly viewed as a business advantage (as with
Motorola Six Sigma plan Statistical Process Control [SPC])
• This session will introduce the Quality Management component
(QM), and describe its main uses relevant to SAP Production
Planning (PP) processes 2

3. What We’ll Cover …
• What is QM?
• How different manufacturing strategies —
discrete, repetitive, and Process Industry (PP-PI)
— change the ways to integrate QM
• What are the differences between QM during
production and QM at the end of production?
• Main customizing tasks to integrate QM with PP
• Master data requirements to integrate QM with
PP
3

4. A Definition of QM
• Quality Management (QM) is a component of
mySAP PLM used to plan, check, verify, and
document the quality of products and
processes
• Three main requirements for a QM system:
– Total Quality Management (TQM)
– Industry-specific standards: FDA and Good
Manufacturing Practice (GMP)
– Standards for QM systems (ISO 9000)
4

5. Evolution of QM
• Let’s see a brief look at the history of software
development in the quality management area
– SAP R/3 – QM: Planned and event-controlled processes in
quality management for purchasing and production, with
little functionality (compared to today’s)
– mySAP PLM – QM: Functional area of mySAP PLM,
encompassing quality engineering, quality improvement,
and quality assurance and control
– mySAP ERP – QM: All QM-relevant processes (quality
planning, quality inspection, quality certificate, quality
notification, quality control, test equipment management,
stability study)
5

6. What Does QM Include?
• Quality Management is integrated in the SAP system
and uses basic and cross-application functions, such as:
– Document Management System (DMS)
– Engineering Change Management (ECM)
– Classification System
– Audit Management
– Workflow
– ArchiveLink
– SAPoffice
• Example: QM documents may be managed with DMS
(txn CC04) and/or SAPoffice (txn SBWP)
6

7. Functions of the Quality Management Area
• Quality planning – create and manage the master data
that is required to plan and execute quality inspections
• Quality inspection – identify whether the inspected
units fulfill the predefined quality requirements
• Quality certificate – certify the quality of a material
(contains texts, specification values, and
inspection results)
• Quality notification – record and process internal and
external problems that are primarily caused by
poor-quality goods or services
7

8. Functions of the Quality Management Area (cont.)
• Quality control – implement various preventive,
monitoring, and corrective activities
– Specifications from quality planning and evaluations from
quality inspections and quality notifications, form the basis
for quality control
• Test equipment management – manage master data,
as well as plan and process calibration inspections
for test equipment
• Stability study – manage basic data, as well as the
planning and execution of stability studies
8

9. Quality Management (QM) in Production Planning (PP)
• QM in PP covers the following areas:
– Integrating inspection planning/production
operations
• Inspection operations can be directly included in routines
(discrete manufacturing and repetitive manufacturing) or
Master Recipes (process industry)
– Controlling inspections during production
• Inspection lot origin 03 (during production)
• Inspection lot origin 04 (Goods Receipt [GR]
from production)
– Statistical Process Control (SPC)
• For example, control chart with mean value and standard
deviation for an inspection characteristic
– Processing internal problem notifications –
notification type Q3
9

10. Discrete Manufacturing
• These are the “normal” production
orders
– Each material is produced
individually (i.e., an
individual production
order for each production
lot)
• The work processes within
a company are executed
using production orders
• A production order defines which
material is to be processed, at
which location, at which time,
and requiring how much work
– It also defines which
resources are to be used
and how the order costs
are to be settled 10
• As soon as a planned
order is generated from
Materials Requirement
Planning (MRP), shop
floor takes over the
information available
and adds the order-
relevant data to it to
guarantee complete
order processing
• Production orders are
used to control
production within a
company, and also to
control cost accounting

11. Repetitive Manufacturing
• A component in the SAP
system for planning and
controlling repetitive
manufacturing and
flow manufacturing
• It enables the period-
dependent and quantity-
dependent planning of
production lines, reduces
the work involved in
production control, and
simplifies backflushing
(confirmation, Goods
Receipt posting) 11
•Implement repetitive
manufacturing if the
following is true of your
production process:
– You produce the same or similar
products over a lengthy period
of time
– You do not manufacture in
individually defined lots.
Instead, a total quantity is
produced over a certain period
at a certain rate per part-period.
– Your products always follow the
same sequence through the
machines and work centers
in production
– Routings tend to be simple and
do not vary much

12. Process Industry Manufacturing (PP-
PI)• With PP-PI, SAP provides
an integrated planning
tool for batch-oriented
process manufacturing
• It is primarily designed
for the chemical,
pharmaceutical, food,
and beverage industries,
as well as the batch-
oriented electronics
industries
12
• PP-PI uses terms such
as:
– Master Recipes – the
processes to be used for
producing materials in your
plant, as well as the resources
and ingredients required for
production
– Process Orders – copy a
process described in a Master
Recipe and adjust it to the
actual production run
– Process Management –
coordinate the
communication between PP-
PI and the process control
during the execution of a
process order

13. QM Changes According to Production Method
• QM uses different blocks (customizing, master data,
etc.) according to the production method (discrete,
process, and repetitive). Here are some examples:
– When process order is used – inspection planning may
reside in the Master Recipe
– When production order is used – inspection planning may
reside in the routine (txn CA03)
– When PP-PI is used – inspection results shall be recorded
in the PI sheet (txn CO60)
– When discrete or repetitive is used – inspection results
shall be recorded in the inspection lot (txn QE51N)
13

14. Production Chain
14
Production
Planning
Order
release
Inspection
during
production
Order
confirmation
Goods
movement
• Sample
calculation
• Inspection
lot creation
• Approval
procedure
• Recording
of scrap
• Partial lot
creation
• Valuation
• Batch
classification
• GR in
warehouse
• Batch
proposal
• Batch
classification
• Release of
batch record
• Operations +
inspection
characteristics
• Inspection
points
• Measured
value and
defects
recording
• SPC control
chart
• Externally
processed
operations

15. QM During Production
• Inspection lot origin = 03
• Inspection lot is created at the PP order release
• At Goods Receipt, material immediately entered
into unrestricted-use stock
• Control is less strict
– Materials with “bad” inspection may enter the “good”
stock
• If better control is required, production reporting
should be on the operation level
– In this case, it should be forbidden to move to the
next operation if the previous one was not accepted
15

16. QM at the End of Production
• Inspection lot origin = 04
• Inspection lot is created at Goods Receipt
• At Goods Received, the produced material is
received into QI-Stock
– Only usage-decision may move it to unrestricted-
use stock
• Control is more strict
– If material did not pass inspection, it cannot be
used
• Production reporting may be on operation
level or on order level 16

17. Customization Tasks to Integrate QM with PP
• Separate transaction for QM customization:
QCC0
• Quality planning
– Inspection characteristics, inspection methods
– Sample determination
– Define task list types, usage, and status
– Define control key for inspection operations
• The required Task List Usages can be created
in customizing
• The Task List Usage is entered in the headers of the
task lists and in customizing of the inspection types
17

18. 18
Assign Task List Type to Material Types

19. Quality Inspection
• Inspection types
• Inspection for goods movements
• Assign inspection type for manufacturing
order
(per production order type or process order
type)
• Maintain usage decision for catalog type = 3
• Define physical sample type, container, and
locations
19

20. 20
Define Control Keys for Inspection Operations

21. Quality Certificates
• Certificate profile
• Maintain form
• Output determination
21

22. Quality Notifications
• Notification types and content
• Additional notification functions (action box
and
follow-up actions)
22
Q: What are Quality Notifications?
A: Quality Notifications are the central medium
in QM for processing problems and
unplanned events

23. Quality Control
• In Materials Management (MM): Vendor
evaluation
• In Logistics Information System (LIS): Quality
Management Information System (QMIS)
• In QM: Definition and evaluation of original
documents
23
Control Chart: Form for the graphical display of characteristics values
that occur during an inspection. The control chart compares the
displayed values with the action limits and, in this way, supports the
quality-related control of the process.
The run-chart is a graphical display of the single values of a
quantitative characteristic in a run time. You cannot valuate
inspection results using the run-chart.

24. Stability Study
• Define physical sample types
• Define testing schedule category
• Notification types
• Catalogs
• Inspection types
24
Stability Studies are performed in the chemical,
pharmaceutical, and food industries to examine
how different conditions affect a product over a
specified period of time

25. Quality Planning as a Foundation for Master Data
• In quality planning, you define information
and processes on a long-term basis as Master
Records
• Quality planning provides the basis for
inspection processing
• To do that, quality planning uses cross-
application data, such as:
– Material Master
– Batch classification
– Quality documents
– Work center 25

26. Master Data: Material Master QM
View
26

27. Master Data: Routine View
27

28. Master Data: Routine View (cont.)
28

29. Quality Planning as Part of QM
• Quality planning uses QM-specific basic data
such as:
– Master inspection characteristics
– Inspection methods
– Sampling procedures
– QM work center (with its capacity)
– Catalog
29

30. Quality Planning and Inspection Planning Data
• Quality planning uses inspection planning data
such as:
– Inspection plans
– PP-PI: Master Recipe, Resource
– Routing
– Material specifications
30

31. Process Order Without QM
• When production is complete, enter a Goods
Receipt of the material into stock
• The Transaction is CO60 – maintain PI sheet
31

32. 32
DEMO – Process Order Without QM
No QM data!

33. Process Order with QM
• When production is complete, enter the
following:
– Inspection results (through characteristics)
– Usage decision
– Only then, enter Goods Receipt of the material
into stock
• The transactions:
– CO60 – maintain PI sheet
– QE51N – find inspection lot per material
– QA11 – enter usage decision 33

34. DEMO – Process Order with QM
34
Enter QM
data here!

35. 35
DEMO – Process Order with QM (cont.)

36. 36
DEMO – Process Order with QM (cont.)

37. 37
DEMO – Process Order with QM (cont.)

38. Resources
• Product information:
– www.sap.com/plm
• Product documentation:
– http://help.sap.com
• For customers and partners:
– http://service.sap.com/qm *
• Information about courses:
– www.sap.com/education
38
*Requires login credentials to the SAP Service Marketplace

39. 7 Key Points to Take Home
• QM became crucial in recent years
– Now, more than ever, it is important to implement it in PP
• Before starting the QM project, make sure your implementation
complies to the rules and regulations
of your company’s business (SOX, FDA, etc.)
• To allow the QM process to work, allocate the necessary
resources to ensure that master data is correct
• If a more strict control is required, you may consider inspecting
the material at the end of production
– If the production process is long or divided into many
processes, you may consider inspecting during production,
also
39

40. 7 Key Points to Take Home (cont.)
• Focus on the main customizing and master
data tasks
– Do not try to achieve everything right at the
beginning
• Use notification wisely. It is very powerful.
• Make sure you allow production to continue
working after QM implementation
– Do not sacrifice production on the altar of QM
40