warehouse procedure of project consumables

8/10/2019 Warehouse Procedure of Project Consumables

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PROCEDURE MANUALDOCUMENT NO:

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WAREHOUSE PROCEDURE OFPROJECT CONSUMABLES

REVISION NO: 00EFFECTIVELY DATE:PAGE: 1 of 3

I. OBJECTIVE

To ensure that the product and materials received and issued are properly handled, storedand maintained by the responsible personnel of the company.

II. SCOPE

Cover all the activities from receiving of materials from the supplier, checking and inspectionfor accuracy, storing of materials up to issuing of items for productions request.

III. DEFINITION OF TERMS

PURCHASE ORDERList that contains item, quantity and total amount of the item that willbe order.

SALES INVOICEA sales invoice is the sale copy of purchase products or services from asupplier to a customer.

INVENTORY LIST Record that shows all items (consumable materials or tools) and itsquantity that being issued and received by the storekeeper.

ISSUE PASS FORM Form issued by the purchasing officer to the storekeeper duringrequisition of items (consumable materials or tools)

MATERIAL REQUEST FORMForm issued to request materials for production use.

IV. EH&S GUIDELINES

1. Wear appropriate PPE when handling and storing of materials in warehouse.

2. Good Housekeeping should be maintained at all times.

3. Report any unsafe condition to the immediate supervision of safety officer for preventingaccident/incident.

V. PROCESS FLOW CHART


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RESPONSIBILITY PROCESS FLOW INTERFACES/DOCUMENTS

STORE KEEPER SUPPLIER

STORE KEEPER INSPECTION FORM

STORE KEEPER SUPPLIER

STORE KEEPER INVENTORY LIST

PURCHASING OFFICER RECEIPT

PURCHASING OFFICER INVENTORY KEEPER

REQUESTOR MATERIAL REQUESTFORM

PURCHASING OFFICER MATERIAL REQUESTFORM

NO

YES

PURCHASING OFFICER MATERIAL REQUEST FORM

STORE KEEPER MATERIAL REQUEST FORM

RECEIVE MATERIALS / ITEMFROM SUPPLIER

CHECK AND INSPECT FORACCURACY

NOTIFYPURCHASING

OFFICER

ACCURATE?

STORE THE MATERIAL

ENCODING IN THE SYSTEM

MONITOR INVENTORY

PREPARE AND SUBMITMATERIAL REQUEST FORMTO PURCHASING OFFICER

REQUEST FOR APPROVAL

A

APPROVED? INFORM REQUESTOR

FORWARD MATERIALS/REQUESTORFORM TO STOREKEEPER

ISSUE THE ITEM


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VI. PROCEDURE DETAILS

1.0 In warehousing procedure, after receiving the materials or equipment deliveredby supplier,inspection and checking done by the storekeeper usually occurs at the time of delivery. Thestorekeeper who received the materials or equipment should ensure that the quantity and qualityof the delivered goods are as ordered. The storekeeper who is assign to inspect the delivereditem(s) needs to be familiar with the items to be stored. If there are amy problems, the purchasingofficer should be notified at once. The purchasing officer should contact the supplier as soon aspossible to clear up the problem.

2.0 The purchasing officer will now encode the sales invoice from the supplier for reference.

3.0 Storekeeper will be the one who will monitor all items at the warehouse for its inventory.

Every week the storekeeper must submit the inventory list to the purchasing officer for reference.Schedule for inventory of all items will be every Saturday.

4.0 Issuing of the item will be done by the storekeeper and the requestor will use Materialrequest form to request some item to the Purchasing Officer and it will be forwarded to the GeneralManager or Project Manager for its approval before issuing the item.

VII. REFERENCES

PURCHASE ORDER

SALES INVOICE

INVENTORY LIST

MATERIAL REQUEST FORM

VIII. DOCUMENT HISTORY LOG

REVISION NO. EFFECTIVITY DATE DESCRIPTION OF CHANGE AUTHOR

00 Initial Release Ingrid Kamil Manalo


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Warehouse Management Policy and Procedures Guidelines Outline (Sample)

1. INTRODUCTION(Starting purpose and scope of the warehousing function)2. STAFFING NEEDS(Minimum and maximum requirements. Provide required skill sets and TORs)3. STORAGE FACILITIES

Location and site (identifying scenarios for different situations)

Roofing and Flooring (Specify what is required)

Utilities and Services (Identify the minimum standards required)

Security (for goods in all circumstances and staff in conflict environment)

Access

Office (Minimum standard)

4. ORGANIZATION of WAREHOUSE SPACE

Layout

Planning

Operating Schedules

Fire Safety

First Aid

Accessories

Methods of Storage

5. DOCUMENTATION

Goods Receive Note

Waybill

Warehouse Register

Stock Record

Warehouse Bin Card

Store Release

Packing List

6. AUTHORITY and RESPONSIBILITIES

Organizational structure

Schedule of Responsibilities

7. RECEIPT of MATERIALS

Responsibilities and Procedure

Receiving Procedures Discrepancies

8. MATERIALS in STOCK

Responsibilities and Procedures

Items received damaged

Broken packaging resulting in loss

Stock Levels

Requirements for special storage

9. MATERIALS in TRANSIT

Documentation

Management and movement requirements

10. DISPATCH / RELEASE of MATERIALS

R ibiliti d P d


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Collected Materials

Delivered Materials

Materials on Loan Operational Stock

Returned Materials

Consumables

Gate Pass

11. INVENTORY CONTROL

Carrying out an Inventory Check

Stock Level Adjustments

Purpose

Procedure

Removal of Items from Inventory

12. DATA MANAGEMENT / FILING

Procedure (Outline)

13. REPORTING

Disposal reports

Monthly or weekly or by-weekly inventory reports

Damage reports

14. WAREHOUSE INSPECTIONS

Schedule

Responsibilities and Procedures

15. APPENDICES Format of documents and templates


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Department Procedure - - Standard Procedure for materials Control and Warehousing

Table of Contents1. Introduction2. Receipt of Material3. Material Checking4. Daily Material Receiving Record5. Material Receiving Notice (MRN)6. Equipment not Completely Acceptable7. Material Delivered to Third Parties8. Material Certificates9. Material Certificate Register

10. Material Receiving Notice Register11. Over, Short and Damage Report12. Over, Short and Damage Report Register13. Recording of Materials Stocks14. Storage of Material at Site15. Material issue at Site16. Access to Company Warehouse17. Outshipment of MaterialsOutshipment18. Out-Shipment Report Register19. Other Materials Registers20. Warehouse Purchase Order and Requisition Files21. Vendors Cards22. Disposal of Surplus

23. Scrap Control and Disposal24. Special Piping Materials25. Equipment Protection During Construction26. Q.C. Procedure27. Flow Scheme Material handling Procedure28. Material Control by Means of Computer (Piping)29. Attachment Summary

Material Control and Warehousing

1. Introduction

The purpose of this section on material control and warehousing is to define the standard procedure forreceipt, checking, storing, protection and issue of materials for construction as well as to outline theadministrative procedures for material control. In addition a procedure is included for piping material controlby making use of a computer.

The procedures in this section are written for a fairly large job. On smaller jobs, there may not be samenumbers or titles of personnel available as are depicted here. Nonetheless, the same administrative andoperating procedures must be followed unless the Project procedure Manual calls for something different, orif permission is received from Home Office Construction Department to vary from the procedure.

2. Receipt of Materials

Prior to arrival of material on site, advice notices or other shipping notifications will be received by theMaterial Supervisor. He will record the volume and nature of the shipment and assign a storage location.


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These documents will be transmitted by the Material Supervisor to the Warehouse Supervisor with a copy tothe related subcontractor(s) (so they can arrange for the off-loading facilities).

Upon arrival, the material is off-loaded onto the foundation or at the storage location previously determined,in the presence of one or more checkers.

Whenever materials arrives on site without advance notification, the Material Supervisor will (if necessary incooperation with the Project Construction Manager), allocate storage and unloading location without anydelay, to avoid demurrage on vendors transport.

All truckdrivers will be directed by the guards to report to the warehouse first. If materials is to be unloaded

at a point other than Company Central Storage the Warehouse Supervisor will direct the trucks to the off-loading location. A Materials Checkers must be present during off-loading. Truckdrivers delivering a largepiece of equipment will be met at the gate by warehouse personnel to guide them to the designatedunloading area.

3. Material Checking

The shipment must be first be checked to see whether it conforms with Packing Lists and the Marking,Shipping and Invoicing Instruction issued to vendors by the Home Office Procurement/ShippingDepartment, being a part of the Purchase Order. Also the Purchase Order, Purchase Requisition plusattachments for specific instructions on loading, unloading, delivery, required official documentation, materialcertificates, etc., must be checked. On some projects a Purchase Order has been placed with a Shipping

Agent, to what extent the Shipping Agent is involved must also be checked.

If the shipment consists of unpacked goods, such as structural steel, pipe, etc., each bundle or piece ischecked off the carrier by the Checker. The Same applies to boxes, crates or other packed goods.

The Checker signs for the goods that actually received, and not necessarily those shown on the deliverydocuments.

Whenever a subcontractor receives Material/Equipment directly, then a copy of a delivery ticket signed byan authorized subcontractors representative must be retained by Companys Warehouse Supervisor and alladministrative work performed as if Material/Equipment was received in Warehouse and issued toSubcontractor.

If it is not possible to check materials during off-loading the Material Checker signs carrier delivery slip forMaterial received unchecked. Materials must be carefully checked as to quantity, specification and thecondition, immediately after receipt. Before signing carriers freight bill, the checker should count the numberof pieces received and examine for evidence of visible damage. Boxes, crates, and cartons should becarefully inspected before taking delivery. If material is received damage or not in accordance with packinglist or freight bill the delivering carrier should be requested to make inspection of damage or discrepancies,and proper notation must be made and acknowledged by carrier on original and copy of freight bill orpacking list.

If concealed damage is discovered at a later date, the carrier should be notified immediately and requestedto make an inspection. Materials involved in any claim should be set aside and redtagged until inspection iscompleted and liability has been determined. A signed record is to be drawn up on the result by the partiesconcerned and Over Short and Damage Report be made. In the event that the vendor is not responsible

for safe custody of goods during transit, claims shall be processed against the carrier.


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The Material Checker is to acknowledge the receipt of the goods only by signing the carriers copy ofdelivery tickets together with the copy for warehouse records, showing date of receipt and storage location

(Warehouse row G bin 26 or Material yard row B).

The Material Checker then checks the material thoroughly against the requisition and the relevant PurchaseOrder to ascertain that the materials meets the specifications and is correct in quantity.

If there is any doubt as to whether or not specifications are being met the Material Checker must report thisto the Warehouse Supervisor for his action.

Upon receipt as outlined above, the material will be tagged to the extent necessary, reflecting P.O. numberand item number and then stored in the allocated location.

All small loose parts such as gaskets, packing rings, bolts, lubricators, gauges, gauge glasses, dripwells,ink, chart, adjusting pins/keys, couplings, spare parts, etc., delivered as part of equipment, should be storedin bins in a separate location in the warehouse and clearly tagged with the item number and P.O. number ofthe equipment.

Any drawings, materials certificates, catalogues, operating instructions and manual relating to equipment areto be marked with the equipment and P.O. number and turned over to Warehouse Supervisor for transmittalto the Site Engineering Department.

When material arrives at site for which no Requisition or Purchase Order is available, the Material Checker

reports this to the Warehouse Supervisor who is turn checks with the vendor, Home Office PurchasingDepartment, or in the Field Buyer to see whether material should have been received. If in order, aPurchase Order number should be obtained.

Upon completion of the above exercise, the Material Checker will turn in delivery tickets, freight bill, etc., tothe Warehouse Administrator for compiling a Material Receiving Notice. When the carrier demands freightcharges for goods that have been ordered on free at site delivery, the freight should be paid from PettyCash Funds and the Vendor backcharged via Project Accounting. This Procedure is outlined in the

Accounting in the Accounting Procedure.

4. Daily Material Receiving Record (DMRR)

(Form BN-UC 17 Attachment 1)

The Material Administrator will enter all materials received (from information on freight bills or packing lists),in a Daily Material Receiving Record DMRR immediately after receipt.

This information should be available from hour to hour for the benefit of the construction forces.

Copies of this report will be distributed before 09.00 hours the day after the receipt of materials at site. Thedescription of materials received will be in abbreviated form Distribution of the DMRR will be in accordancewith the Document Distribution or Construction Coordination Procedure.

5. Materials Receiving Notice (MRN)



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If no shortages, damages or discrepancies are found, a Material Receiving Notice (MRN) is then prepared toacknowledge the receipt of the material against the relevant Purchase Order. For materials arriving at site

not covered by Requisition or Purchase Order a MRN should be made, after obtaining a Purchase Ordernumber, with note in the remarks column as no P.O./Requisit ion is available we are listing materials asdelivered to site. After receipt of P.O. and requisition, material should be checked against these documentsand a revised MRN issued, if required.

Material Receiving Notices must be issued and distributed without delay so that the payment may be madeand advantage can be taken of any terms of payment.

For Field Purchase Order the requisition number should be noted on the MRN. If an Over Short andDamage Report is involved the Over Short and Damage Report number must be noted on the MRN.

A separate MRN must be used for each shipment

Two or more shipments from one vendor must not be combined, even if they are received the same day andare applicable to the same order. Materials from two or more packing lists must not be combined on thesame MRN, even if received on the same freight bill. Generally, vendors invoice for each shipment orpacking list separately and the Material Receiving Notice is needed to support each invoice.

As Material Receiving Notices are made, the requisition or Purchase Order is to be marked up to reflectreceipt of the material.

The exact storage location is to be noted on the MRN. This document is issued to update the stock controlsystem.

When the material received must be inspected by a specialist before an MRN is issued, the WarehouseSupervisor will send an equipment check sheet to the appropriate specialist (Pumps, Compressors, HeatExcharges, etc., Electrical and Instrumentation). A copy of this check sheet must be sent immediately to theHome Office (Expediting Department and Accounting Department). This advises them that the material hasarrived on site and that a MRN will be issued as soon as inspection is done. After the specialist hasinspected the equipment (which must be done within three working days), the check sheet is returned to thewarehouse and a MRN issued immediately.

When goods being received are fully listed or described upon the packing list, this packing list can be usedas an attachment instead of relisting them all on the MRN.

The Warehouse Supervisor is responsible that the MRN is checked carefully, location is given, etc., All

Material Receiving Notices will be signed by the Warehouse Supervisor.

Material Receiving Notices are printed in blocks with a white original, and colored copies, and are to bedistributed in accordance with the Document Distribution List.

6. Equipment not Completely Acceptable

Occasionally a piece of equipment is received on site with discrepancies which involved correction costs of aminor nature compared with the total Purchase Order value of the item.

So that Company or Client may take advantage of discounts available for quick payment and also in ordernot to antagonize vendors by withholding payment of a large sum because of comparatively minor

discrepancies, a partial MRN will be completed with the details of the discrepancy stated on an Over Shortand Damage Report (OS&D Report) with some indication as to cost to field of rectification. This enables


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the Home Office Purchasing Department to resolve with the Accounting Department how much of thevendors invoice should be paid.

The Backcharge to Vendor procedure will be followed to ensure that Company does not absorb any costrelative to rectification.

7. Material Delivered to Third Parties

When materials are delivered by a vendor to third parties (e.g. motors to pump vendors, panel mountedinstruments to panel vendors etc.,) the items are received on site built together. An MRN for each separatecomponent must be issued, e.g. lone for the motor and one for the pump.

8. Material Certificates

Piping Materials

Each delivery of piping materials, authority and non-authority, will be accompanied by the proper materialcertificates.

The Material Checker will check the materials against the certificates. Any discrepancies found onmanufacturers symbol, heat numbers, etc., will be notified to the Materials Supervi sor immediately for actionvia the H.O. Inspection/Expediting Department.

An O.S.&D Report will be issued recording the certificate and/or material discrepancies. Materials are storedin a separate location and labeled with the corresponding O.S.&D. Report Number.

The O.S.&D. Report is cleared upon receipt of the correct certificate or upon replacement of the material asapplicable.

Under no circumstances will materials be released for construction unless the correct certificate is available.

9. Material Certificate Register

The register will show:

Company Certificate Number Fabricators Code

Charge Number

Short Material Description

Schedule/Pressure Rating

Size

Quantity

Any other information required by contract

On completion of the project, Home Office will produce a certificate register following Client requirementsfrom data accumulated from the material certificate register.

10. Material Receiving Notice Register

(Att h t 2A)


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An MRN Register will be maintained by the Warehouse Supervisor.

The register must show:

MRN sequence number.

Date materials received.

P.O. number.

Vendor.

Material Description.

11. Over, Short and Damage Report


In all cases of materials damaged, lost in transit, short or over shipped by vendor, notation must be madeon the Material Receiving Notice and Over, Short and Damage Report (OS&D Report) completed by thewarehouse.

It is imperative that a clear cross-reference is made, i.e. material Receiving Notice number on Over Shortand Damage report and Over Short and Damage Report number on Material Receiving Notice.

In the remarks column of the Over Short and Damage Report, a note must be made as to the correctiveaction to be taken. Company Home Office Procurement/Expediting Department is responsible for this actionfor Home Office Purchase Orders, including update of Computerized Material History file if applicable.

In the case of an overshipment on a Home Office Order, this form advises Home Office if the overshippedquantity can be used by field or if it should be returned to vendor for credit.

Field makes no disposition of this material, either is to use or return until advised by the Home Office. If to bereturned, the Home Office Expediting Department will secure shipping instruction from the vendor andadvice the field by means of an AVO or telex authorizing shipment.

In some cases, it will be the responsibility of the client to decide if over delivered items can be accepted. Insuch cases an Over Short and Damage Report is not required. The Client approves the Material ReceivingNotice which should state Overdelivered quantities will be accepted by the Client.

When a shipment from vendor is short, the Over Short and Damage Report Advises Home Office whether ornot materials are needed and the Home Office Expediting Department takes the necessary steps to securematerials or credit from the vendor. If the shortage is caused by loss in transit, and the material is noturgently needed, action should be withheld for a reasonable length of time to allow the carrier to attempt totrace and locate lost items.

When materials/equipment are received damaged or not according to specification, a copy of the O.S.&D.Report is forwarded to the Site Engineer for the issue of a Non-conformance Report.

When materials/equipment are received damaged, a copy of the freight bill or packing list withacknowledgement of the carrier (see Item 3.0 Material Checking) should be attached to the Over Short andDamage Report.


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If claims on vendors or carrier involve repairs by field forces (after authorization by the Project ConstructionManager or Home Office A.V.O.), costs of materials, equipment and labor must be accumulated and

included in a claim (see Backcharge Procedure).

Over Short and Damage reports shall be distributed in accordance with the Document Distribution List orConstruction Coordination Procedure.

12. Over Short and Damage Report Register


The purpose of the register is to maintain a record of all Over Short and Damage Reports to ensure that theHome Office Expediting and Accounting Departments are informed of all reports.

This register shall be maintained by the Warehouse Supervisor. Once a month a listing of all open OverShort and Damage Reports shall be mailed to the Home Office Expediting Department with a copy to theProject Construction Manager (and, when required, to the Clients resident Engineer).

All claims on carriers or vendors should be controlled by assigning a Backcharge number and recording it inthe Backcharge register.

Over Short and Damage Report Register

(Form BN-UC 22 Feb. 80 Attachment 4)

Register will show:

Over Short and Damage Report sequence number.

Date.

Purchase Order number.

Material Receiving Notice number.

Vendor.

Description.

Material Receiving Notice clearance number.

Remarks. Non-conformance report, if relevant.

13. Recording of Material Stocks


All materials received shall be entered on Material Stock Record Cards, which reflect particulars as shownon the Material Receiving Notice, Over-Short Reports and Purchase Orders. The complete description of thematerial, item number and the exact storage location shall be included.

14. Storage of Material at Site

Upon receipt, all materials not directly delivered to the works or Pipe Fabrication Shop, should be storedith i th h t i l d


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All small materials, instruments, electrical material, tubing, small pumps, etc., must be stored inside

warehouse.

All large pipe, fittings, valves, etc., will be stored in the warehouse or yard. Materials will not be storeddirectly on the ground. An under layer of wood or suitable material should be used.

All pipe must be stored by type, size and schedule on sleepers with at least 10 cm slope for water drainageand pipe ends (plain or threaded) checked for satisfactory caps/protection. If not already done by vendors,the Warehouse Supervisor is responsible that all material stored either in the Warehouse or yard is properlymarked and color coded in accordance with the specification.

Hours and materials spent on this marking and coding shall be reported by the Materials Supervisor forBackcharge purposes.

This color coding must be maintained throughout the storage / construction period. Each member of theMaterial Department and Specialist Engineers will be supplied with the copy of the marking and color codingprocedure to facilitate the application of correct marking upon the material when received and the traceabilityof the material throughout the construction period.

Corrosion protection is either the Subcontractors or the Warehouse responsibility. Warehouse Supervisorshall check regularly that this work is properly done.

The Material Supervisor will check on a regular basis the handling and storage of the materials at thesubcontractors shop.

15. Material Issue at Site

(Form BN-UC 74 Attachment 5A)

All materials will be drawn from the warehouse on a Material Requisition which must bear the signature ofthe Subcontractors authorized Supervisor or the Company Specialist.

A list of authorized signatures should be kept and should show the following

Name of employee (Printed)

Function (Title)

Signature Specimen

A block of numbers shall be allocated to each subcontractor. Material requisitions shall reflect relative itemnumbers, quantity, description, drawing and/or unit number. These requisition shall be issued in duplicate,the original for the warehouse, the copy for retention by the drawer of the material.

Material requisitions must be checked carefully before material is issued to assure that specific allocation isgiven, and that subject material has not been previously issued.

Whenever material has been previously issued, the Material Administrator should write on requisition:Material already issued, see previous requisition number . . . . . ..

Material should never be issued twice. If delivered by error, the Warehouse Supervisor will collect thismaterial from the Subcontractor.


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The Warehouse Supervisor will receive from the Site Engineer a copy of all piping iso/drawings and theirrevisions. All issue of material must be marked with red pencil on these drawings. This is for control

purposes and to ensure that no material has been issued twice.

Upon receipt of a revision to a drawing or Isometric Materials have to be checked against the previous issueof the document. In the event more materials are required, Company should prepare this material and informthe Subcontractor accordingly. Where materials have been deleted, the Subcontractors shall be requestedto return this material to the warehouse if not necessary for drawings/requisition in hand for issue. TheSubcontractor is informed in writing when deleted materials from one drawing/requisition have beenallocated to another drawing/requisition.

After the relevant materials have been issued, the materials requisition is posted in the Materials StockRecord Card.

All requisition received in the warehouse must be filed according to requisition number and per

subcontractor. All finals must be filed together. All partial requisition must be filed separately.

If materials requested on a requisition are not in stock, the Warehouse Supervisor should check if they areon order. If this is the case, the requisition should be filed in an outstanding requisitions file. This file shouldbe check to see if any requisitions can be further completed. If outstanding materials are not on order he willsend a Photostat copy of the requisition to the Materials Supervisor for further action. Where piping materialis required, other than for an iso/drawing, e.g. for temporary lines, the requisition shall be approved by theProject Construction Manager or his delegate.

Under no circumstances will material be issued from the warehouse or storage yard to Subcontractor

without the presence of a member of Companys Material Department and use of all required materialscontrol documents.

16. Access to Company Warehouse

The following personnel have been access to the Company Warehouse at all times during working hours.They are requested to notify the Warehouse Supervisor before entering the Warehouse:

Project Manager

Project Construction Manager

Area Superintendent

Site Engineer

Office Manager

Material Supervisor

Safety/Security Officer

Construction Specialist

Clients Representatives

All other personnel entering the Warehouse must be accompanied by the Warehouse Supervisor or MaterialAdministrator or any one of the personnel mentioned above.

17. Outshipment of Materials Outshipment

Report (OSR)



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This register will show a listing of all cables received at site. Including the name of the vendor, size andquantity of cable, date received, Purchase Order number, Material Receiving Notices number and cable reelnumber, and whether returnable or not. Whenever empty reels are returned, the Out-Shipment Reportnumber and date of return must be posted in this register.

19.2 Oxygen and Acetylene Cylinder Register

Only when purchase by Company.

19.3 Gasoline and Oil Drum RegisterReturnable Drums

Only when purchase by Company.

19.4 Special Container RegisterReturnable Containers

In some cases, materials are received at the job site in containers for which special charges are made.These are charges on invoices for material involved and credited on return. In other cases, they are chargedonly if not returned within a reasonable time to vendor. Those items received on Home Office PurchaseOrders will be covered by an AVO from Home Office Purchasing Department advising shipping instructionsand authorizing return when empty.

Items on Field Purchase Orders should be reported by Materials Supervisor to Job Buyer.

19.5 Rail Car Log Book

When materials or equipment will arrived on site or nearby by rail, a rail car log book should be used that willshow rail car number, time and date of arrival. After the railroad company is advised that the rail car isemptied and ready for transportation the actual time and date the car is taken away by them should be notedin the log book. In addition, the log book will show the Purchase Order number and a brief description of thematerial received.

20. Warehouse Purchase Order and Requisition Files

The Material Administrator shall maintain Home Office Purchase Orders, Requisition, Field Purchase Ordersand Requisition files. The right hand side of the folder will contain the requisition, Purchase Orders and

Amendments. The left hand side of the folder will contain Material Receiving Notices, Out-ShipmentReports, Over Short and Damage Reports, packing lists, and all other documents pertaining to the PurchaseOrder.

The Purchase Order folder is an open file. When the final Material Receiving Notice has been issued,Purchase Order files will be marked Complete and transferred to another section of the filing cabinet.

21. Vendors Cards


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The Material Administrator will maintain for Field and Home Office Purchase Orders a card system indicatingnames of vendors, description of material and Purchase Order number.

Cards will be field alphabetically. This card system helps to locate Purchase Orders if only the vendorsname is known.

22. Disposal of Surplus

It is our normal practice to dispose of all surplus material as soon as practical.

The procedure for disposing of this material will vary depending upon the type of contract. If materials werepurchased on a reimbursable contract all materials actually belong to the Client, and the ProjectConstruction Manager disposes of the material in accordance with the Clients wishes as expressed throughtheir field representative.

However, if the Client requests Company to dispose of the materials, this will be accomplished as statedbelow:

Approximately at 85% of job completion all surplus materials is to be inventoried.

The inventory will list the item number, Purchase Order number, vendor and description and value. Treecopies should be mailed to Home Office Purchasing Department. The Client should also be contacted todetermine if they are interested in acquiring the materials.

The Purchasing Department will investigate possibilities for disposal of the material and subsequently advisefield as to what action is to be taken. After the first surplus list has been issued, revisions to this list must beissued regularly.

All shipments of material from the job shall be covered with an out-shipment report.

23. Scrap Control and Disposal

23.1 Scrap Control

Subcontractors are responsible for seeing that economical use is made of piping material with a minimum ofscrap. All material moved to the scrap location must be inspected by the Piping Specialist. No alloy materialmay be scrapped without the permission of the Piping Specialist.

No fittings may be modified without the permission of the Project Construction Manager e.g. no. 90%elbows will be cut to make 45% elbows. If for some emergency such a modification is made, the CompanyPiping Specialist must instantly notify the Material Supervisor in Writing Giving full particulars.

In addition, if a repair or change is made, every effort must be made to return flanges and fittings to thewarehouse. Flanges in particular can be sent to an off-site machine shop for machining on an economicalbasis for later reuse.

Scrap collection locations will be available at site. Subcontractors and the Company Piping Specialists will

be responsible for a weekly collection of scrap in their respective areas and dumping at the indicated scrapfill locations. All alloy material shall be kept separated by types.


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23.2 Scrap Disposal

On a reimbursable job, scrap disposal will be discussed with the Client and the action to be takenincorporated in the Construction Coordination Procedure.

On a lump sum job it is the responsibility of the Project Construction Manager to dispose of scrap in themost economical manner and proper (auditable) records shall be kept.

24. Special Piping Materials

A separate storage area in warehouse and yard may be allocated to special piping materials. This decisionis to be made by the Materials Supervisor and approved by the Project Construction Manager.

Upon receipt, materials are thoroughly checked against the requisitions and the relevant Purchase Order toascertain that the material meets the specifications and is correct in quantity.

Color coding is verified in accordance with proper specification. Paint shall be of good suitable for outdooruse, if not suitable, remedial action will be taken immediately. Color coding will be checked on a regularbasis and upgraded if necessary.

Materials are checked against certificates, manufacturers symbol and charge number are verified.

Taking into account the long delivery delay on most special types of material, no extra material, such as forfield changes, lost material by Subcontractor, etc., will be issued unless approved by the ConstructionSuperintendent.

The Materials Supervisor will notify the Home Office immediately of the additional material requirement eventhough it might be covered by contingency material.

Pipe Lengths

The charge number will be transferred as required by the specification or applicable authority. The stampingwill be done by an authorized representative from the Mechanical Subcontractor in accordance with theinstructions of the Company Quality Assurance Manager.

Material Administration

The material administration will be handled in the same manner as for other material.

25. Equipment Protection During Construction

25.1 General


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This section covers the minimum requirements for the protection of equipment against deterioration from thetime it is received at the construction site until it is placed in operation. It should not be applied to equipment

handling extremely high purity products, where special instruction is required. In addition, additional orspecial procedures may be required to protect equipment against more aggressive environments such asextreme cold or heat, saltwater, spray, windblown dust or sand. These additional requirements will befurnished in the Construction Coordination Procedure.

It is assumed that materials and equipment are adequately protected for shipment and storage by themanufacturer in accordance with Purchase Order specifications or manufactures standard practice.

If not protected by the vendor as specified in the Purchase Order, Company Home Office Procurement mustbe notified immediately for the purpose of backcharging.

The field must then provide adequate protection.

When proper protection is not evident, the field shall notify Company Home Office Procurement immediatelyand make sufficient examination to ascertain that the equipment has not been damaged by the omission.

Additional protective measures specified by the equipment manufacturer shall be performed.

25.2 Documentation

Records shall be kept to document the protection given the equipment while the manufacturers guarantee isin effect. These records shall be kept from the date of arrival of the equipment at site, showing dates ofapplication of services of each piece of equipment.

25.3 Rust Preventives

The rust preventives referred to herein are RUST-BAN compounds. Some Clients may procedure their ownrust preventives, in which case their equivalent preventives shall be used.

Preventive suppliers can give more information as to coverage, application temperature, method ofapplication, drying time and method of removal.

All interior and exterior surfaces shall be clean and dry before any rust preventive materials are applied. Forcleaning of surfaces mineral spirits or solvent shall be used. Kerosene or gasoline shall not be used ascleaning agent.

RUST-BAN 357

Recommended for bearings and internal faces.

All rotating equipment protected by this compound, shall be turned over once per week, to keep bearingsand other critical surfaces coated. This rotating should be done manually. This must not be carried out withtools, which will damage or mark motor shafts.

Drain water form all reservoirs once a month and fill up reservoir to the proper level. If the fluid becomesdirty or contaminated water, reservoir shall be drained, flushed with solvent and refilled.

RUST-BAN 373


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Recommended for exterior surfaces. This preventive has no lubricating properties, thus before placingprotected part in service; it should be removed from bearing surfaces, threads, or areas that come in contact

with lubricants.

MOISTURE ABSORBANTS

When internals, etc., would be very difficult to protect from rust, moisture absorbants are used for protection.When equipment arrives from the site, the seals shall be examined and damaged seals repaired orreplaced, and the absorbant replaced, if necessary.

Seals shall be protected until the equipment is serviced for start-up.

Moisture Absorbants shall be renewed at time intervals as specified by the manufacturer.

25.4 Machinery

On receipt at the construction site, casing and internals are to be inspected through piping nozzles, etc., tosee if rust preventive has been applied. Protection to be done as follows:

Turbines, Blowers, Agitator, Gear Cases, Centrifugal Pumps and Compressors.

- Flush bearing brackets and gear cases with solvent until clean. Fill with RUST-BAN 357 at least till theshaft and turn shaft several times to apply a protective coat to the entire shaft and bearings.

- Clean shaft couplings and exposed machine surfaces and coat them with RUST-BAN 373.

- If a pump shipped with mechanical seals installed, fill the stuffing box with RUST-BAN 357. Whenmechanical seals are integral with the pump, and the pump is not protected by moisture absorbants or ablanketing gas, the entire pump should be filled.

- Turbines shipped with carbon rings installed, fill sealed chamber with RUST-BAN 357.

- Vertical pumps shall be filled with RUST-BAN 357 after they are moved to their service location.

- Intermediate shaft supports, if necessary, are to be provided to protect against shaft sag.

- Spare rotating elements are to stored according manufacturersinstructions.

25.5 Motors and Generators

Motors, designed for indoor use, and generators are to be stored indoors.Motors, designed for outdoor use, can be stored outside free from ground protective covering, permittinggood ventilation.If space heaters are furnished within the units, they shall be connected to the continuous power supply ofthe proper rating, when stored outside, or installed at their service location.Brushes shall be removed from brush holders, and shall be stored in a dry place, when condensation will notoccur.Coat couplings and exposed machined surfaces with RUST-BAN 373.


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Measuring and recording of installation resistance values to be carried out as stated in the ConstructionCoordination Procedure.

25.6 Transformers

Transformers intended for outdoor insulation can be stored outside.

Large indoor transformers may be stored outside, if raised above grade to prevent any damage from surfacewater and if a shed roof and tarpaulin siding are provided.

Where units are supplied complete with insulation liquids/gases, these should checked on arrival at site. Iflevel or pressure is not within vendors tolerances, possible leaks should be located and rectified. Monthlychecks on level/pressure should be made and rectification work carried out when necessary.

Any separately supplied insulation liquid may be stored outside, without protective covering, if laid on theirside at an angle of 45

o,with the large bung downwards.

25.7 Switchgear, Starters and Control Equipment

Equipment shall be stored indoors in a dry, warm place where condensation of humidity cannot occur.

If high relative humidity or large, rapid changes in temperature are expected, heaters shall be used tomaintain the temperature of approximately 5

oC above minimum daily temperature.

If space heaters are furnished with in the equipment, they shall be connected to a continuous source ofpower of the proper rating.

25.8 Cables

Rotate reels of properly insulated lead sheathed cable 90oevery two weeks to prevent migrating oil from

collecting at low points.

Measure and record gas pressure in low pressure gas filled cable when received and weekly thereafter.

If falling pressure indicates a leak in the cable, maintain same with dry nitrogen until leaked is sealed.

25.9 Batteries

Batteries should be stored indoors in an inactive area to avoid accidental breakage. Batteries that have beenshipped dry and charged shall have the seals checked regularly and in case of damage, repaired accordingto vendorsinstructions.

Nickel-cadmium and Lead-acid batteries that have shipped dry do not require maintenance. For thoseshipped wet, electrolyte levels should be checked and filled required. These batteries should also berecharged tri-monthly. Watch for over-charging.

25.10 Instruments


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For instruments a warm, dry and vibration free environment in a secure under cover storage area isrequired. Recommended environment conditions are temperature range of 15

oto 30

oand humidity between

30 to 40%.

Instrument can be stored in the above environment for up to four months in their shipment cases. Wherecases/packing have been opened the plastic coverings are to be retained and resealed in the manner theywere shipped. Panels to be stored in their shipping cases up-right until moved into the control house.

Instruments installed in outdoor locations shall be protected from weather and mechanical damage.

25.11 Piping

Any protective coatings/paintwork on piping shall be maintained throughout the storage and constructionperiod, as well as the color coding on piping.

25.12 Flanges

Flanges from 2 and up can be stored outdoors on timber floor or pallets.

All flange faces to be cleaned with a solvent if required and protective coating applied and maintained.

When machinal flange face is damaged, remedial work has to be carried out before use.

Flange facings with 125 RMS (for use with spiral wound gaskets) MUST be remachined before use, ifdamaged.

25.13 Valves

Manually operated valves from 2 and up can be stored outside, on a timber floor or pallets.

Large automatic control valves such as slide valves, motor operated valves may be stored outdoors, ontimber floor and with suitable covering over each valve.

Valves stored outdoors shall be inspected every two weeks and coating and rust preventive renewed ifrequired. On arrival on the site, when spot check reveals remove all flange covers, clean flange faces withsolvent and coat with a rust preventive. Inspect valve stems and valves internals. It necessary clean withsolvent and apply rust preventive coating seat manually operated valves. Plugvalves and soft-seatedballvalves to be stored in open position. Valves to be stored with spindles in vertical position.

Valve handwheels must not be used for lifting valves, slings etc. must not be passed through valve boreduring handling. Plug any open threaded connection.

Each valve shall be fitted with an aluminum tag securely attached with stainless steel wire.

Each tag shall be clearly stamped with the valve item number. Tags shall normally be closely attached to the

gland bolting. Tags on valves that do not have gland bolting may be attached to the handwheel or otherappropriate locations. Tags shall not be attached through boltholes of end flanges or where handling mightbe subject to damage or loss.


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Arrival of Material at site via Truck or Rail

Unloading at Warehouse yard on site.

Checked as to: - Nr. Of boxes, cover crates,pieces etc. as shown on delivery receipt.

Delivery receipt signed if in order. Copyretained.

Freight collect charges if in order will be paidfrom petty cash.

Materials are checked as to:

Quantity,Quality, andSpecifications.

In the event that materials received are not asper the order an Over, Short and DamageReport is prepared.

An out-Shipment is prepared to any materialsleaving site. Such shipments may require directauthorization from Client.

Material not requiring indoor storage are placedat most convenient point for end use.

Small fittings, bolts, gaskets, valves,instruments, electric materials will be stored inWarehouse.

All materials are checked on receipt for properprotection. Pipe, is checked for color coding.Fittings and Flanges are checked for colorcoding. Valves are checked for proper tag no.(metal label).

All equipment is checked periodically untilturnover to construction or operators, to insureproper weather and corrosion protection.

Materials are issued to construction forinstallation, upon receipt of a materialrequisition.

28. Material Control by Means of Computer (Piping)

28.1 The site computerized material Stock Control System is programmed for:

(a) Receiving of data from the Home Office mainframe computer.

(b) Transmittal of data from the site to the Home Office mainframe computer.

(c) Various Site Applications:

- Registration of certificatesupdate.- Registration of material receipts.- Material allocation per given drawing or batch of drawings.- Production of material lists for issue of materials.- Automatic material stock level update.- Registration of material issued per single item of a single drawing.


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- Registration of material issued per given batch of drawings.

28.2 A telephone link between the Home Office main Frame computer and the PC at the Site Officewill be established.

Data received from the Home Office:

- Purchase orders information on a continuous basis.

- Material requirements per isometric upon request from site.- Material description data.

Data transmitted to the Home Office:

- Material receipts on a daily basis to complete the PMC procurement cycle.

28.3 Material Receipts

All data on receipts of material will be entered into the PC on a daily basis.

By entering this data the following occurs:

- Stock levels are automatically updated- A data file is written which is then transmitted to the Home Office via the link.

28.4 Certificate Register

The information on purchase orders transmitted by the Home Office is written automatically in thecertificate data file.

The following additional data required to be entered:

- Company certificate number- Charge number- Quantity- Vendors code

- Other number/codes required by contract

28.5 Material Availability and Shortage

Data transfer on material take-off is requested from Home Office on a batch of drawings following theconstruction priority schedule and following the backlog requirements of the Piping PrefabricationSubcontractor.

A sample report is run on the site PC that shows availability of material. This may be done per batch ofdrawings or for a small group of drawings which could represent a particular piping system. This reportwill show these isometrics, (prefabrication and /or erection) and Material Lists that can be met from theexisting warehouse piping material stock.

The report will show Material Lists where only partial issue is possible. In these cases, the missingmaterial is highlighted. This information is used as a guide for priority expediting purposes.

28.6 Issuing of Materials


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For isometrics indicating that the materials are available on request, a Material List will be printed induplicate which is used for the issue of materials to the Subcontractor. The Subcontractors authorizedrepresentative signs one copy for the receipt of the material which is held in the warehouse file and onecopy is held by the Subcontractor.

- The printing of the Materials List will automatically reduce the material stock level in the PC.

The Material Lists may be requested:

- For the fabrication items only- For erection items only

28.7 Issue of Extra Materials to the Erection Contractor and/or Returns of Materials to the Warehouse

The issue of extra materials on drawings for revisions, filed changes, etc. will be done by means of aForeman Requisition. The Subcontractor signs copy of the Foreman Requisition for the receipt ofmaterial. The Foreman Requisition is entered in the PC to update the stock control system.

Materials returned to the Warehouse are done by a negative Foreman Requisition is also entered in thePC to adjust the stock.

28.8 Material on Hold

If may occur that systems of high priority cannot be fabricated or erected due to missing material. The PCMaterial Control System allows to put the part of the available material on hold in order that it is notallocated to a non-priority drawing. The hold can be released if required.

28.9 Reports Available from the PC Material Stock Control System

- Material available overall- Quantity of material issued/drawing- Certificate allocation by given purchase order

- Certificate of allocation by a given charge order- Material shortage by given drawing number or per batch of drawings

28.10 Users Manual

Further details relative to the application of computerized (piping) materials control are given in aseparate Users Manual.

29. Attachment summary

1. DAILY MATERIAL RECEIVING RECORD

2. MATERIAL RECEIVING NOTICE (MRN)


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Item or group of like items or projectrequired to be purchased

Is aggregatevalue in excess

of 20,000?

Are the itemsavailable via another

resource Centre?

Initiate tender procedure

Liaise with appropriate ResourceCentre and place order

2A. MATERIAL RECEIVING NOTICE REGISTER

3. OVER, SHORT AND DAMAGE REPORT

4. OVER, SHORT AND DAMAGE REPORT REGISTER

5. MATERIAL STOCK RECORD CARD

5A. MATERIAL REQUISITION

6. OUT-0SHIPMENT REPORT

7. OUT-0SHIPMENT REPORT REGISTER

8. CABLE REEL REGISTER

9. MATERIAL RECEIPT NOTICE

10. PICKING LIST

11. FOREMENs REQUISITION/PICKING LIST

APPENDIX AMethods of Purchase

Yes

No

Yes


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Is there a current contractcovering the purchase of

such items? Seehttp://www.leedsmet.ac.uk/fin/purch/puragree.htm

Have identical items andquantity been purchased

within the previous 12months

Is aggregate valuebelow 5,000?

Obtain 3 writtenquotations

Place order with thesupplier offering greatest

value for money

Retain written quotationsand details of verbalquotes on file for two

years for audit purpose

Place order against contract

Are prices still valid?Was standardsatisfactory?

Is aggregate valuebelow 1,000?

Obtain 3 writtenquotations and

record details

Liaise with appropriate ResoCentre and place order

The budget holder shall havediscretion to decide weathernot to obtain quotations. Pla

order

No

Yes

No

Yes Yes

No No

Yes Yes

No No

warehouse procedure of project consumables

Documents