In SCADA systems, data quality flags help identify if sensor data is good or bad. The process starts by reading the sensor value. Then, the system checks if the value is within a valid range, for example between 0 and 100. If the value is outside this range, the data is flagged as BAD; otherwise, it is flagged as GOOD. This flag is stored with the data and used later to make decisions or trigger alerts. The example code reads a sensor value of 75, checks the conditions, and assigns a GOOD flag because 75 is within the valid range. This step-by-step check ensures only reliable data is used for control or monitoring.