How to handle defect in material while the production order is already released ?

Hello Experts,

I would like to know the process that,if it is found material is defective while the production is going on and then decision is taken to stop the production then how the process can be mapped in SAP ?

I think the 03 inspection process will take care of this but still can anybody give me exact steps to map this scenario..?

Any help will be highly appreciated by reward points..

Thanks

Anand