Introduction In my previous blog, I explained the required Quality Management setups. In this blog, I will execute the Quality Management process with two scenarios; in the first scenario the Products passes all the Quality Control process, and in the second scenario will be where the Products fail a Quality Control Process. To address the Second scenario, two products will be selected, specifically Brake Pads from two distinct manufacturers. All the setups that I showed in my previous blog will remain the same. To execute the second scenario, I will take two products from two different manufacturers. And an additional Item Sampling has been created for the second product. Execution: (Scenario 1) As all the necessary setups are completed let’s test this by creating a Purchase Order for quantity 10. As per the Quality Association setup the Quality Order has been created after product receipt generation. So now until the Product passes the Quality Test, the Purchase order cannot be Invoiced since the Event Block is set to Invoice. Here the Quality Order is generated for 5 qty since the Item Sampling is 50% so the entire 5 qty needs to pass the Quality Test as the acceptable level is 100. Select the Test and then click on Results to fill in the Test Results for the Product: Brake Pads. In the Results Page, in the Results Quantity enter the Quantity which passed the quality test. Then select the Outcome and you can see a right tick in the Test Result column which means that the product has passed that particular Quality Test. Repeat this process for all the Tests. The Next step is to validate the Quality Order. For that click on Validate from the top of the screen. Here I have disabled the Quarantine upon Validation failure because my product has passed all the Quality Tests so there is no need to enable that parameter unless it fails the Quality Tests. Now since my Product has passed the quality order, I will now be able to generate the Purchase Order Invoice.   Notice how the Quality Order status changes from “Open Quality Order” to “Closed Quality Order”. Scenario 2 As I explained at the beginning of my blog, in this scenario, I will take two products from two different manufacturers (P-000017 and P-000018) and one of them fails the Quality Tests. The products that failed to pass the Quality Order will be transferred to the Quarantine Warehouse for further processing. The Quality Association has been set up for both the Products. For Product P-000017 the Item Sampling is set to 50% and the AQL is set to 100 and for Product P-000018 the Item Sampling is set to 100% with Full Blocking Parameter enabled. Quality Order Processing As per the Tests defined for both Items, the product P-000017 has failed the test as the acceptable quantity defined is 100 for all the tests. And for the other Product that is P-000018 has passed all the Quality Order tests. Refer below screenshot to view the failed Tests of product P-000017. In the above screenshot, you can see that only 1 quantity of product P-000017 has passed the test and the other 2 quantity has failed to pass that particular quality test which ultimately leads to Quality Order failure. Same is the case with the other two tests as well, which clearly state that Product P-000017 has failed the Quality Order process. Now you can see that Product P-000017 has failed the Quality Order process so it is necessary to move this stock to a different location where it will be further inspected. This process of segregating stock is referred to as Quarantine. Quarantine Management Quarantine management in Dynamics 365 Finance and Operations refers to the process of isolating and controlling items that are suspected of having quality issues or non-conformities. The quarantine management system helps track and manage these items, allowing for proper inspection, testing, and disposition decisions. It ensures that only items meeting quality standards are released for further use or shipment, while those in quarantine undergo necessary actions, such as testing, repair, or disposal, to address any identified issues. A new separate Warehouse should be created in the system to transfer the products that fail the Quality Order process. This warehouse is called a Quarantine Warehouse. Attach this warehouse with a warehouse that you are going to use for transactions under the Quarantine Warehouse drop-down option. Quarantine Process As the Product P-000017 has failed the test it needs to be transferred to the Quarantine Warehouse. To do that click on Validate from the top of the screen and then enable the Quarantine upon Validation Failure parameter and then click on OK. In the below screenshot, you can see that as I clicked on OK, the System automatically generated a Quarantine Order. Now if you go to that released product and click on Transactions under the Manage Inventory Fast Tab you can see that the Product P-000017 has been deducted from W1 and has been received in the Quarantine Warehouse. Depending on the product type and inspection results, an item can be repaired to make it acceptable or returned to the vendor if it is deemed unfit for use. If there is an agreement with the vendor, and permission is granted, the item can be directly scrapped from the quarantine warehouse using the Scrap functionality. If the items are to be returned back to the Vendor in such a case the inventory must be first returned to the default warehouse. A specific location can be defined in the Default Warehouse for this purpose. In this scenario, I am assuming that the product was repaired and deemed fit for use after Quarantine Inspection. Now in order to receive this inventory in the Main Warehouse(W1) we need to use the Item Arrival Journal. 1. The first step is to open that Quarantine Order. 2. Click on Report as Finished from the top of the screen. 3. Click on End from … Continue reading Quality Management Process in Dynamics 365 Supply Chain Management – Part 2 →

Introduction Hello Everyone! In this blog, I will explain the Quality Management Process in Dynamics 365 Supply Chain Management and cover all the necessary setups required for Quality Management. Imagine a supply chain where every component, every process, and every product meets or exceeds customer expectations. Where defects and delays are minimized, and customer satisfaction soars. This is the power of quality management in Dynamics 365 Finance and Operations. For this blog, I have taken the example of an Automobile company that purchases the Product Brake Pads from the Vendor. When car brake pads are received in a warehouse against a purchase order, they undergo specific quality checks, similar to other products. Setup required for Quality Management Process in Dynamics 365 SCM The first step is to enable the Quality Management parameter. The pathway for that is: Inventory Management>Set Up>Inventory and Warehouse Management Parameters. Step 1: Creation of Test Instruments: Depending on the Product Type we must create different Test Instruments to conduct quality tests on the Product. So here I need to create these instruments for my Product Brake Pads. To create Test Instruments, Go to Inventory Management>Set Up>Quality Control>Test Instruments. Now click on New from the top of the screen then enter the Name, Description, and Unit of the Instrument. Here I have created three different Test Instruments for the product Brake Pads. The Precision here is linked to the Unit which can be edited in the unit setup. Step 2: Creation of Tests: Now, the next step is to create the Tests in the system which I will use to check the Quality of the product Brake Pads. So as per my requirement Brake pads will be Tested for the following tests. Note: There are two types of tests: To create Tests in the system, go to Inventory Management>Set up>Quality Control>Tests. To create a Test click NEW from the top of the screen. Then enter the name and description of the Test. Then select the Type and Test Instrument. Follow these steps to create all the required Tests in the system. Step 3: Creation of Test Variables: The Test Variables page allows you to configure, modify, and observe the potential results for a test variable linked to a qualitative test. When selecting an outcome as a test result, you assign a Pass or Fail status to each outcome to indicate whether the test has been passed or failed. It is always better to define a minimum of two outcomes that is one with a Pass status and one with a Fail status for each variable. There are no restrictions on the maximum number of variables or outcomes that can be specified. Moreover, multiple tests can utilize the same test variables to record results. To create Test Variables, go to Inventory Management>Set Up >Quality Control>Test Variables. Step 1: Click on NEW from the Action Pane at the top of the screen, then enter the name and description of the Variable. To make it easy to understand here the Variables are created similar to the Test name. Step 2: The next step is to enter the Outcomes. For that select the Variable and then click on Outcomes from the Action Pane which is at the Top of the screen. Step 3: In the Test Variable Outcomes page click on NEW from the top of the screen. Then enter the Name and Description of the Outcome. When the outcome is selected as a test result, choose either Pass or Fail to indicate whether the test has been passed or failed. Repeat Steps 1, 2, and 3 to create multiple Test Variables and their Outcomes. Item Sampling According to the Business Requirement you must specify the sample size for testing which can be indicated as a percentage or a fixed quantity. In this scenario, the entire quantity received in the stock from the Purchase Order will be selected for testing. So in this case I will establish item sampling for the entire quantity, representing 100% of the items. Full Blocking Parameter under Item Sampling The Full Blocking parameter is enabled on the basis of business requirements. For example, if I create the item sampling as 10% and if I receive 100 qty so among them only 10% qty will be taken for testing. In such a case if I enable the full blocking parameter, even though I will be testing only 10% of 100 qty the system will automatically block the rest of the 90% of the quantity as this option is enabled. But if this parameter is disabled then only 10% of the qty will be blocked for quality inspection and the rest of the 90% qty can be used for consumption. Per Updated Quantity Parameter under Item Sampling Enabling this feature ensures that a Quality order will be generated specifically for the quantity received in a Purchase Order, whether it is a complete or partial quantity. For example, Item sampling is set to 100%, If the Purchase Order quantity is 100 and the Per Updated Quantity parameter is enabled and if I received a partial quantity that is 50, in such a case the Quality Order will be generated for 50 quantity and not for 100 quantity as the Per Updated Quantity parameter is enabled. But if this parameter is disabled and if I receive a partial quantity of 50 the Quality Order will be generated for the entire 100 quantity. Now to Create Item sampling the pathway is Inventory Management>Set up>Quality Control>Item sampling. In the Item Sampling page click NEW from the Top of the screen. Then enter the name and description of the sampling that you want to create. In the above screenshot, you can see that I have created an Item sampling of 100%. Under the name and description field, you can see the Sampling Quantity field in which I have selected the Quantity Specification as Percent. You can either select Percent or Fixed Quantity depending on the business requirement. Here I have defined the value … Continue reading Quality Management Process in Dynamics 365 Supply Chain Management (SCM) – Part 1 →