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I had the idea of posting this blog so that organizations or companies who perform inspections on their material can effectively analyses the process of their rejection process and make subsequent improvements in ensuring the rejection, lifting of material from storage locations and its visibility in the system.

In specific industry cases, Once the material is rejected and posted out of the system it is physically not lifted by the vendor due to certain reasons which means the tracking is not maintained and the physical location of the rejected material is not traceable in the system. (Location is only visible at plant level not Storage Location level when Mvt.103 (MIGO) is performed)

Organizations typically want to improve the TAT of their processes and the visibility of all the aspects are needed to make informed decisions on how TAT can be improved once date and time of certain actions are known.

After rejection material is stock out from plant level but in some cases, vendor is not lifting the rejected material at the time of MIGO-124 and rejected material physically place in warehouse and after that there is no visibility in SAP that where material is stored/kept and since how long.

Here we discuss goods receipt with movement type 103, receipt of goods in GR blocked stock. As we all know the use of such movement type will only give visibility at plant level and the stock is not yet made the company stock/company asset and it is still not valuated at that moment.

This causes a problem since in certain cases the rejected material is not lifted by the vendor and material is to be posted out through Mvt. type 124 (Return to vendor), but it is still physically present in the storage location or in the warehouse. Visibility of the location of the material is also not present in the system.

The main objective is to manage this process in a way that the detail tracking of material is conducted through SAP Quality Management and allow visibility of the material in the storage location so that when the vendor arrives to lift the material, we are aware of the location, date and time of the lifting in SAP.

Background of the process

With the suggested SAP Quality Management process below, we shall be able to accurately define each step of the rejection process with its subsequent placement of the rejected material and its corresponding date and time to its respective storage location and its intimations to the vendors via emails/rejection letters. Customized reports (Create Query reports) shall provide deeper analysis and statuses of the rejected material for better business decisions.

We shall discuss these steps in detail but first let’s lay down the basic steps that need to be performed to achieve what we want-

  • Posting of material in GR Blocked stock through Mvt. type 103.

  • Perform its Result Recording and record the defects in the case of rejection of the Inspection Lot with entry of storage location in additional info field.

  • Perform UD against result recording with UD Codes R1 and R2 (Will discuss this further)

  • Send Rejection Email/Rejection letter to Vendor through QM Notifications once for intimation of rejection and second time once the vendor arrives for lifting of material.

  • Posting the rejected material (Return to Vendor) in SAP through QM-UD (if non serialized material) or MIGO-124 (Serialized Material)

Step by Step Guide:

Posting of Material through MIGO 103:

We shall first post the material which has an inspection plan and the relevant inspection type assigned in material master assigned to it in the SAP system so that its inspection lot is created, and the material is put into GR Blocked Stock for further processing.











After posting of the material the inspection lot of the material is generated created as shown below:

Result Recording of the Inspection Lot:

The result recording of the material is added in the system which will showcase any defects observed in the inspection lot. Since the material received during Mvt. 103 does not reflect any storage location.

A standard text field (Additional Info Field) is used here to record the storage location which will record the physical location of the material at the time of RR. As showcased below where storage location entry is made. This can be made visible in our reports later on.

Defects are to be entered in the RR by adding the defects as showcased below.

Entries of the Code group are added, and the defects are recorded to be used in RR. Notification can be activated through this window which will allow us to send the rejection remarks to the vendor once UD is performed.

Performing UD with code R1 to inform the vendor of decision.

Once the Result Recording has been performed, we shall now perform the Usage Decision of the Inspection Lot. For this step we need to have two more codes configured in the system for usage decision. R1 (Material Rejected but return pending) and R2 (Rejected Material Returned to vendor).

R1 is going to be used incase we reject the material, and we will send the notification to the vendor informing about the decision. This will keep the material in GR Blocked Stock and date and time of the decision will be recorded which can be viewed in copy of ZABAP report which will showcase the location and the UD result of the material thus giving us its visibility.

We shall first choose R1 in our UD code and head on over to the Inspection Lot stock where we shall propose to keep the material in the GR Blocked Stock state.

After all this is done, we shall send an email to the vendor informing them about the usage decision for this. Click on the “Go To” menu tab and select “Defect Structure” from the drop down.

A window will open that will showcase the defect overview window as showcased below.

Appropriate Defects are to be selected which will open a new notification window as shown below. After selecting the appropriate line item click on the notification button in the bottom right. Notification window will open which will house our option to send the intimation to the vendor about the results.

Fill out all the entries required to process the notification such as the reference number and the quantity that is being rejected as shown below.

An enhancement has been made in the action box window in the right which will trigger the functionality to send email to the vendor.

A popup will open which will allow to either preview the rejection email/letter or send it to vendor. The typical layout of the email intimation being sent to the vendor is shown below.

You can save the UD doc. without any entry in to be posted field (stock remains same in GR blocked stock).

After posting of UD system status will be change to UD ICCO SPRQ.

Performing UD with R2 once vendor arrives to pick rejected material.

At the time of vendor arrival to pick the material up. We change the UD code using T.code QA12 (Change with History) from R1 to R2 (Rejected Material Returned to Vendor). When you change a usage decision with history, the system creates a change document that contains the relevant fields of the inspection lot with the values before and after the change.

Once this is done. We follow the same steps for email intimation (As done for R1 UD code) as showcased above and then choose the send email to the vendor intimating them about the material being lifted from the storage site.

An email message of the following format will be sent to the vendor intimating them that the material has been lifted.

After the second email intimation has been sent to the vendor. We now have to return the material back to the vendor through UD. For this, System will allow to post the return delivery to vendor from UD transaction (If material is non serialized), but the system status will remain same as UD ICCO SPRQ.

A material document has been generated with movement type 124. (Returned to vendor)

Case for Serialized Material.

The procedure that has been showcased is for non- serialized material only since SAP QM does not allow to post material document of serialized material with movement type 124 through UD with companies using movement type 103 and 105 for good receipts (Refer to screenshot below)






To post return to vendor of serialized material we shall use MIGO transaction with movement type 124 to achieve the desired result.

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