Introduction
Recording quality-related costs is crucial for an effective quality assurance program. Play the video to learn how you can record quality-related costs in SAP S/4HANA.
QM Orders for Recording Inspection Costs
Appraisal costs are associated with inspection processing activities, such as labor, material, and equipment costs for inspections. From a business perspective, you record these costs to gain an overview of how much you spent on a goods receipt inspection for a specific material during one quarter. You may also be interested in the costs of the inspection for a particular inspection lot. The image below illustrates the two alternatives:
The system offers the following options when you want to record inspection costs:
General QM Order: You use this variant if you want to accumulate costs for multiple inspection lots against one QM order. From a business perspective, you can consider this order as a cost collector for costs occurred by, for example, all goods receipt inspections of a certain raw material during one year. At the beginning of the reporting period, the Quality Engineer creates all necessary QM orders and assigns them to the materials. At the end of the period, the cost collector is settled against the account assignment object, for example, the cost center for goods receipt quality control.
This approach has the advantage that there are only few QM orders. However, you cannot distinguish costs for individual inspections.
Technically, the Quality Planner or Engineer assigns QM orders to the inspection type level in the material master. Therefore, you can track appraisal costs up to material, plant, and inspection-type level, if necessary.
To create a new general QM order in the system, the Quality Planner or Engineer uses the app Create QM Order.
To assign an existing general QM order to the inspection type in the material master, the Quality Planner or Engineer can either use the app Change Material (→ individual assignment of an order to a material) or the app Assign QM Order (→ mass assignment of an existing order to multiple materials or mass creation and assignment of new orders).
Individual QM order: You use this variant if you want to record individual costs for each inspection lot. After inspection lot processing is finished, you settle the order against the account assignment object entered in the order header.
This approach has the advantage that you can track costs for each individual inspection. However, there a potentially as many orders as the system creates inspection lots (provided that the inspection type settings require QM orders).
Technically, the system automatically creates a new QM order when it creates the inspection lot and assigns the QM order to the lot. To enable this process, the Quality Planner sets the flag Individual QM Order in the inspection type settings of the material master.
Note
To be more precise, an Individual QM Order is created for the inspection lot if the document for inspection lot creation contains account assignment information. This applies for goods receipts for orders with account assignment, for example. The account assignment object, for example, the cost center, is copied to the settlement rule of the individual QM Order.
During the automatic creation of a QM Order in the inspection lot creation, you can determine the order type depending on the inspection type. In Customizing, the Application Consultant can assign a QM Order type to each Inspection Type (IMG: Maintain Inspection Types). This is transferred during the inspection lot creation. If there is no Order Type defined for the Inspection Type, the Order Type for the individual QM orders from the QM plant settings is used (IMG: Maintain Settings at Plant Level).
In SAP standard, order type QL01 is used for General QM Orders and order type QL02 is used for Individual QM Orders. If required, the Application Consultant can add additional order types. However, we recommend to align the settings with the Controlling department.
Note that you cannot use QM orders to confirm activities for inspections during production (inspection lot origin 03 and 13). For these inspection lots, the relevant order or cost collector from production is used as the cost collector for the activity confirmation.
Prerequisites for Recording Inspection Costs
To record appraisal costs, the Quality Planner must prepare the inspection plan as shown in the following image:
To each operation in the inspection plan, the Quality Planner assigns one work center. The work center again is assigned to a cost center providing various activity types. Each activity type corresponds to an activity that can be performed at the work center. In our example, we need to differentiate between personnel time and machine time, as they have different hourly rates.
Note
Usually, cost centers and activity types are defined by the Controlling department.
To be able to record activities for an operation, the Quality Planner also sets a control key with the indicator Milestone conformation, Confirmation required or Confirmation possible but not necessary.
During result recording, the system automatically raises an input screen where the Quality Technician can record times for each activity type. If the indicator Confirmation possible but not necessary is set, the Quality Technician must call this screen from the application toolbar (Menu → Edit → Confirm activities). The following image shows an example:
The Quality Technician performed the visual inspection operation and recorded the inspection results. To measure all the results, the Quality Technician needed 30 minutes. Additionally, they used a machine for 15 minutes. After entering the results, the system looks up the current cost rate for each activity type in the work center. It then multiplies the provided times with the cost rate and charges the sum against the QM order.
The Quality Engineer can also record costs to the QM order when they perform the usage decision. To do this, they use the activity recording function, select a work center (since the system needs the cost rate), and capture the times.
To keep track of material costs, the Quality Technician records a goods issue to an order using the app Post Goods Movement. For example, if a test kit was used, the Quality Technician records the goods issue for the test kit to the QM order, and the system allocates the material price to that specific order.
QM Orders for Recording Defect Costs
You can use QM orders to track all costs incurred during the processing of a quality notification, similar to inspection processing costs. These costs can include activities to analyze the issue, perform repairs, and the required components, among others.
The Quality Engineer creates a QM order (order type QN01) when processing the notification in the Change Quality Notification app. If multiple notifications need to be captured in one QM order, for example, because they reference the same delivery or complaint, the Quality Engineer can reference an existing QM order in a quality notification.
To document material-related costs, such as the exchange of a defective component, the Quality Technician or Engineer posts a goods issue to the QM order. To document activities, the involved party uses direct activity allocation and enters their center, the activity type, and the time required to perform the activity.