D365: Quality Management

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Quality management in Dynamics 365 Supply Chain Management can be used to help improve product quality within your supply chain. Quality assurance involves product testing and management of nonconforming material.

Nonconforming material describes an item or items that have a quality problem. The nonconformance process lets you create a nonconformance order that describes a quantity of nonconforming material, the problem source, the problem type, and explanatory notes.

The six default nonconformance types and the information that must be recorded for each type are:

  • Nonconformance type - Source information
  • Customer - The customer account number, the sales order number, or a lot number of a sales order transaction. For example, the nonconformance might be related to a specific sales order shipment or to customer feedback about product quality.
  • Service request - The customer account number, the sales order number, or a lot number of a sales order transaction. For example, the nonconformance might be related to a specific sales order shipment or to a customer's complaint about item quality.
  • Vendor - The vendor account number, the purchase order number, or a lot number of a purchase order transaction. For example, the nonconformance might be related to a purchase order receipt or to a vendor's concern about a part that it supplies.
  • Production - The production order number or a lot number of a production order transaction. For example, the nonconformance might be related to a specific batch that was produced.
  • Internal

The quality order number or a lot number of a quality order transaction. For example, the nonconformance might be related to the tests that are performed as part of a quality order or to an employee's concern about product quality.

Co-product production

A co-product production order nonconformance that is related to batch production orders.

Using Dynamics 365 Supply Chain Management, you can define a classification of problem types to make analysis of nonconforming material easier. You can also print a nonconformance tag and a nonconformance report to guide the disposition of nonconforming material. For example, the tag and report might indicate a condition of Unusable or Restricted usage.

Quality management can help you:

  • Manage turnaround times when you handle nonconforming products (regardless of their point of origin).
  • Schedule tasks to correct problems and prevent them from recurring.
  • Help guarantee a high level of product quality.
  • Optimize supply chain processes.
  • Increase customer satisfaction.

The Quality management for warehouse processes feature extends the capabilities of the basic quality management feature. It lets you integrate item sampling controls into the warehouse receiving process by using advanced warehouse management. Warehouse work can be automatically generated to move inventory to the quality control location based on a percentage or a fixed quantity or based on every nth license plate. After a quality order has been completed, work can be automatically generated to move inventory to the next location in the process, depending on the quality results. Quality orders aren’t always required, so it also allows for a lightweight quality control process that is based on warehouse work.

The Quality management for warehouse processes feature automatically generates work as part of the receiving process to move the inventory quantity that is required for quality control to a quality control location. If the quantity that is received exceeds the quantity that is required for quality control (according to the item sampling setup), the excess quantity is moved to an inbound location that is defined in the location directive setup. After the quality order is validated, work is automatically generated to move the quantity for the quality order to a new inbound or return location, based on the validation result and the location directive setup. The automatic generation of work that has only the quantity that must be moved to and from quality control provides an integrated process experience.

In addition to functionality for managing nonconformance, quality management includes functionality for tracking issues by problem type (even internal problems) and for identifying solutions as short-term or long-term. Statistics about key performance indicators (KPIs) provide insight into the history of previous nonconformance issues and the solutions that were used to correct them. You can use historical data to review the effectiveness of previous quality measures and determine appropriate measures to use in the future.

When you set up a quality association, Supply Chain Management can generate quality orders for various business processes, events, and conditions. The quality association can cover a specific item, a specific group of items, or all items.

Example uses of quality management

Quality management is flexible and can be implemented in various ways to meet the requirements of specific levels of supply chain operations. The following examples illustrate possible uses of these features:

  • Automatically start a quality control process based on predefined criteria (upon warehouse registration of a purchase order from a specific vendor).
  • Block inventory during inspection to prevent non-approved inventory from being used (full blocking of purchase order quantities).
  • Use item sampling as part of a quality association to define the amount of current physical inventory that must be inspected. Sampling can be based on fixed quantities, a percentage, or full license plate.
  • Create quality orders for partial receipts. To create a quality order that is based on the quantity that is physically received with an order, you must select the Per updated quantity check box on the Item sampling form.
  • Create test types that include minimum, maximum, and target test values, and perform qualitative-versus-quantitative testing that has predefined validation results.

Specify an acceptable quality level (AQL) to control quality measure tolerances. Specify the resources that an inspection operation requires, such as a test area and test instruments.

Controlling the quality management process

Here are some of the ways that you can control the quality management process:

  • Create quality orders that are based on trigger points such as “at product receipt” for inbound operations or “at product pick-up” for outbound operations.
  • Document test results, and determine whether the results meet the established test criteria and acceptable quality levels.
  • Use document management for detailed product specifications and user-specific notes as part of reporting during the inspection process.
  • Maintain nonconforming products, and correlate these products with additional nonconformance information to track down the original cause of a problem.
  • Document the cost of managing a nonconformance. This cost can include the items (such as spare parts), miscellaneous charges, and the timesheet hours that are required to correct the nonconformance.
  • Schedule error correction processes by using correction handling that is linked to quality orders.