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Quality management in Microsoft Dynamics 365 finance and operations: Part-1

Hi everyone!!! In this blog I am going to discuss about Quality management in supply chain management. I will cover all the required setups along with the execution.

We all know quality management is one of the important processes in supply chain management, as this ensures quality of the product which is of utmost important for customer satisfaction.

I have taken example of an automotive company who purchases product: car battery from the vendor. Like all other products, car battery also goes through certain quality checks when this is received in a warehouse against a purchase order.

Let’s start with the setups.

First, we need to enable quality management under parameters, so that all the setups work in dynamics.

Creation of Test instruments: Based on the type of product, we need to create different test instruments required for conducting quality tests on the product. In our case we need to create these instruments for product battery.

Tests: In this setup we need to create tests which we want to check as part of quality testing of car battery. Let’s say as per company requirement, battery will be tested for battery water level, battery charge status and external damage.

Test variables: Now we need to create test variables and define outcomes for each test variables. For easy understanding, in this example variables name are chosen similar to test name.

Item sampling: As per business requirement, you need to define how many items to be selected as sample for testing. It can be in percentage or fixed quantity. In this example, all the quantity received in the stock in a purchase order will be taken for testing. So, here I will create Item sampling for 100%.

Full Blocking: Enable this to block stock for inspection. This needs to be enabled as per business need. For example, we have received 100 Qty in a P.O and item sampling is 10%. Then enabling this would mean that entire 100 qty will not be able to use until inspection is complete for 10 qty.

Per updated quantity: Enabling this means that whatever quantity is received in a P.O (full or partial), Quality order will be generated for only that quantity. For example- Item sampling =100%, If P.O is for 100 qty and per updated quantity is not enabled. If you have received partial quantity i.e., 50 then also quality order of entire 100 qty will be generated as item sampling is for 100%. Hence, by enabling this system understands that item sampling to be considered is for quantity received.

Test groups: As per business requirement, you can define “acceptable quality level”. In our case, it is 100. Some industries may accept even at 90-95 to pass and ready to be used by customers.

Quality groups: you can create a quality group and add items. This will save time as otherwise you need to add individual item in quality association. Alternatively, you may create quality association for each individual item as per business requirement.

Quality association:  This is key setup of quality control process.

Execution:

Now, since all the required setups are completed. Let’s test this by creating a purchase order for Qty=20.

You can see when I tried to receive product, a quality order is generated as defined in the quality association.

Now, until quality order is performed, process of product receipt cannot be done as defined in quality association. In our example, quality order is for entire 20 qty (as item sampling 100%) and entire 20 qty need to pass the quality inspection check as acceptable level is 100.

Now, you can see that since quality order passed for entire 20 quantity, quality order status is closed. You will now be able to process the product receipt, invoice, and payment.

That’s it for this blog.

Keep reading and sharing. Thank you!!!

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