As manufacturing operations scale, quality teams must manage a complex network of interconnected variables - multiple tiers of suppliers, distinct assembly lines, diverse product variations, strict quality controls, and evolving global regulatory requirements that are difficult to manage using manual checks. Basic ERP quality modules, too, can leave gaps between identifying a quality issue and controlling the material, process, or transaction affected by it. A separate quality management tool may address quality records and corrective actions but can leave these activities disconnected from the ERP processes that execute them.
An ERP software with advanced quality management capabilities helps unify these complex elements. Dynamics 365 Supply Chain Management (D365 SCM) takes this connected approach to complex manufacturing. Through Advanced Quality Management (AQM), D365 embeds advanced quality controls into supply chain and manufacturing processes, connecting inspections and quality decisions with the materials, transactions, and workflows they affect. Automated quality triggers, flexible sampling, inventory controls, CAPA, and traceable quality records help move quality management from reactive inspection to proactive process control.
The following section examines how Advanced Quality Management works in Dynamics 365 Supply Chain Management.
The Quality Management Process in Dynamics 365 Supply Chain Management
Quality management follows a lifecycle that moves from triggering an inspection to testing material, evaluating the result, and taking action based on whether it passes or fails. In D365 SCM, this lifecycle is embedded into operational workflows, as illustrated below.
Quality management in Dynamics 365 SCM links inspection results to the appropriate operational and quality-control actions. The process typically involves the following stages:
- Inspection Trigger and Quality Order: A configured transaction, such as a purchase receipt or production event, triggers a quality order to initiate an inspection. The quality order defines the applicable tests and inspection requirements.
- Test Execution and Evaluation: Quality personnel record test results and evaluate them against defined specifications, sampling requirements, and acceptance criteria.
- Pass or Fail Outcome: The test outcome determines the next action. Results that meet the applicable criteria allow the material or batch to proceed through the relevant operational or release process. Failed results can trigger blocking, quarantine, or other appropriate disposition controls, with nonconformances recorded where applicable.
- Investigation and Corrective Action: When a quality issue requires further investigation, teams determine its cause and the appropriate response. AQM adds structured Corrective and Preventive Action (CAPA) Management to track actions and help prevent recurrence.
How D365 Supply Chain Management Supports Quality Control Across the Manufacturing Value Chain
Quality requirements exist at different stages of the manufacturing value chain, from incoming materials through production, warehousing, and finished-goods release. Figure 2 shows where D365 SCM applies quality controls and where AQM adds deeper capabilities for more complex requirements.
Quality requirements apply at different stages of manufacturing, from incoming material receipt through production, inventory handling, and finished-goods release. Figure 2 maps these touchpoints and highlights where AQM adds capabilities for more demanding quality requirements.
- Incoming Material Receipt: Quality orders can be triggered at purchase receipt, with defined tests and acceptance criteria. AQM adds flexible sampling plans and skip-lot testing, allowing manufacturers to inspect a portion of a lot or skip selected lots according to their sampling strategy.
- Production and In-process Quality: Quality orders can be associated with production and route operations at defined manufacturing stages. AQM adds production dispensing controls and electronic batch records (EBRs). Dispensing separates controlled material dispensing from picking and supports authorization and tolerance controls. EBRs capture manufacturing methods and actual production details, including test values and quality-order results.
- Warehouse and Inventory Control: Quality inspections can be integrated with warehouse execution. Where Advanced Warehouse Management is configured, sampled inventory can be directed to quality-control locations and held pending the applicable inspection and disposition process.
- Finished-Goods Verification: Quality checks can help establish whether finished products meet the defined requirements before proceeding through the applicable release process.
- Customer Quality Documentation: AQM supports customer-specific Certificates of Analysis (CoAs), including configurable test inclusion and result presentation. The Traceability add-in can complement quality controls by supporting forward and backward traceability across affected goods.
Advanced Quality Management (AQM) in Dynamics 365 Supply Chain Management
For manufacturers with complex or highly controlled production environments, AQM extends D365 SCM's standard Quality Management capabilities with additional controls for testing, production records, documentation, and quality processes. These capabilities can support quality and compliance programs aligned with FDA Quality System Regulation (QSR), 21 CFR Part 11, current Good Manufacturing Practice (cGMP), and ISO standards. Regulatory compliance, however, depends on the manufacturer's broader quality system, validation activities, procedures, and governance.
AQM provides:
- Flexible Sampling and Skip-lot Testing — Adjusts sampling to quality requirements and reduces repetitive inspections where quality history supports it.
- CAPA (Corrective and Preventive Action) Management — Assigns and tracks corrective and preventive actions and links them to investigations.
- Electronic Batch Records — Maintains approved manufacturing methods alongside actual batch production records, including test values, attributes, and quality-order results.
- Test Instrument Calibration — Manages calibration schedules and connects testing activities to the instruments used.
- Electronic Signatures — Adds controlled signature requirements to supported quality and manufacturing activities, including quality-order validation, CAPA, dispensing, and calibration.
- Customer-specific Certificate of Analysis (CoA) — Generates CoAs with the tests, values, ranges, and results required for different customers.
- Production dispensing & Electronic Batch Records (EBR) — Supports controlled dispensing of materials with authorization and tolerance checks, while EBRs document and track production activities, materials, and process data throughout batch execution.
- Approved Customer Lists — Controls which customers can buy specific products directly in the sales process.
- Quality Management Workspaces and Quick Test-result Entry — Helps quality teams review activity and record results faster at volume.
- Root cause analysis and continuous improvement — Supports root-cause identification, investigations, and corrective and preventive actions to address recurring quality issues.
Choosing the Right Dynamics 365 Solution for Quality Management: Business Central vs. Supply Chain Management
Both Business Central and D365 Supply Chain Management embed quality management into manufacturing operations but differ in depth and breadth.
| Manufacturing Parameter | Business Central | Supply Chain Management |
|---|---|---|
| Complexity profile | Suited to small and midsized manufacturers with structured inspections, lot control, and relatively straightforward workflows. | Suited to multi-site and multinational operations requiring advanced quality governance, regulatory controls, process manufacturing, and sophisticated supply-chain processes. |
| Quality inspection model | Inspection templates, generation rules, measurements, pass/fail criteria, workflows, and noncompliance handling across purchasing, production, assembly, and warehouse activities. | Quality orders and associations across procurement, production, warehouse, inventory, sales, transfers, and returns, with flexible testing, sampling, and acceptance criteria. |
| Sampling strategy | Inspection templates define tests, measurements, parameters, and pass/fail criteria. | Supports AQL, sampling plans, flexible sampling, and skip-lot testing. |
| Production quality | Inspections associated with production output. | Quality orders can be associated with production and route operations at defined manufacturing stages. |
| Batch records | Inspection records linked to production and inventory. | Electronic batch records link approved manufacturing methods with actual production and quality results. |
| Warehouse quality | Links quality inspections to warehouse processes and inventory movements. | Integrates quality with WMS, including sampling-based movement to quality-control locations and disposition based on results. |
| Nonconformance and correction | Blocking, quarantine, transfers, disposal adjustments, and purchase returns for noncompliant items. | Dedicated nonconformance management with investigation, root-cause analysis, correction, disposition, and follow-up. |
| Quality documentation | Inspection records, certificates, and nonconformance documentation. | Broader quality documentation, with AQM adding customer-specific Certificates of Analysis. |
| Quality controls and governance | Configurable inspection controls and workflows for day-to-day quality management. | AQM adds electronic signatures and instrument calibration for processes requiring greater control and accountability. |
| Operational scale | Appropriate for relatively contained entities, plants, and quality workflows. | Better suited to multi-entity, multi-country, multi-plant, and complex manufacturing or supply-chain operations. |
| Regulatory controls | Inspection records, quality workflows, lot blocking, and audit visibility. | Electronic signatures, Electronic Batch Records, CAPA, calibration management, approved customer lists, and advanced documentation controls. |
| Process manufacturing support | Suitable for simpler manufacturing environments. | Strong support for process, formula, and batch manufacturing and regulated industries. |
| Batch traceability | Lot-level traceability and inspection history. | Integrated quality history and supply-chain lot and batch traceability with forward and backward genealogy searches. |
| Warehouse integration | Warehouse-linked inspections and disposition workflows. | Deep integration with Advanced Warehouse Management, mobile-device execution, license plates, inventory statuses, warehouse directives, and quality locations. |
Business Central is often appropriate when quality and operational workflows remain manageable within its core processes. As operations expand across countries, entities, plants, and more sophisticated manufacturing and supply-chain processes, D365 SCM provides a broader foundation for managing that complexity.
Also Read:
Quality Management in Business Central: Embedding Quality Control into Manufacturing Operations
Conclusion
Dynamics 365 Supply Chain Management with Advanced Quality Management provides a broader quality foundation for manufacturers with complex, regulated, or multi-site operations. Its capabilities extend from inspection and inventory control to advanced sampling, corrective action, warehouse execution, documentation, and traceability.
Talk to our experts about implementing quality management in D365 Supply Chain Management or explore our manufacturing capabilities.
