Optimize Procurement Processes by Implementing Source Inspection

  • by Jawad Akhtar, Head of SAP Delivery, AbacusConsulting
  • August 10, 2012
You can configure source inspection functionality with one step so that you can inspect goods from a vendor at the source (at the vendor’s premises) before they are delivered. This brings about significant overall process improvements and helps reduce the overall lead time in ensuring that only quality goods are delivered by the vendor.
Key Concept
A Master Inspection Characteristic (MIC) is the quantitative or qualitative attribute of a material. For example, a quantitative MIC can be the thickness of a steel sheet (raw material). The thickness can then be measured with the defined limits of 0.45 mm to 0.65 mm. The surface finish of the metal sheet can also have attributes, such as extra-smooth, smooth, pitted, or rusted on the surface, which are examples of qualitative MICs. MICs have their own set of specifications that needs to be defined as QM master data.

Source inspection functionality in the quality management (QM) module ensures that the quality of procured goods is checked and approved for compliance before the vendor delivers them. The vendor can then deal with any defects in product quality immediately. A company can use this functionality to track when source inspection needs to be, and to carry it out. This saves the time that otherwise would have been lost if the defective goods were delivered by the vendor and rejected (or asked to be reworked) by the company.

The article begins by outlining an important configuration step needed to consider various options available for source inspection. If the goods at source inspection are rejected or asked to be reworked, one option is to not allow the vendor to deliver goods until the problem is rectified. Another option is to have a new inspection lot created when the vendor delivers the goods, despite having previously cleared source inspection. The business needs to evaluate the available options and accordingly have the necessary configuration undertaken in the QM control key.

Apart from the single configuration step, you need to set up the master data needed for source inspection. I’ll create a purchase order so you can see the importance of the delivery date and how source inspection is affected by it. You then create an inspection lot by manually triggering the program. Finally, you record the results and make usage decisions about the goods.

You can implement source inspection at any time, even after an SAP system and the QM module are already implemented in a company. Source inspection can be added as a part of ongoing improvements in business processes in general and the procurement process in particular.

Jawad Akhtar

Jawad Akhtar earned his chemical engineering degree from Missouri University of Science and Technology. He has 17 years of professional experience, of which nine years are in SAP. He has completed eight end-to-end SAP project implementation lifecycles in the areas of PP, QM, MM, PM, and DMS in the steel, automobile, chemical, fertilizer, FMCG, and building products industries. He also has worked as an SAP integration manager and an SAP project manager. He has been proactively involved in a business development and solution architect role for seven years. He is the author of Production Planning and Control with SAP ERP, it's filled with in-depth infomation on discrete, process, and repetitive manufacturing types. His profile on LinkedIn is at http://pk.linkedin.com/in/jawadakhtar. You may follow Jawad on Twitter @jawadahl. Currently, he is associated with AbacusConsulting as Head of SAP Delivery.

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