Refurbishment of Spare Parts

Purpose and Benefits:

Purpose  

• Faulty repairable spares is maintained to re-use in company, the spare part will have different valuation type to represent different values 

Benefits 

• A high value spare part or critical part will be managed with serial number. It will help to manage each piece of this spare part 
• Refurbishment process will help to reduce the spare parts inventory cost. 

Detailed Process Description:

Refurbishment Management 

In this scenario, a spare part will be procured and installed in the function location as an equipment. Serial nos. can also be assigned to the procured material. These repairable spare parts can be identified with different valuation types like New(C1), Repaired(C2) and Damaged(C3) with corresponding cost assignments. 

When there is a malfunction of the installed equipment, it will be dismantled from the functional location and a spare part / equipment can be withdrawn and installed at the functional location. The defective equipment will be returned as damaged item to the warehouse(Valuation type C3). The stock in the warehouse will be automatically updated(with valuation types) and with corresponding cost. 

The maintenance planner will create a refurbishment order. These defective repairable spare(Valuation class C3) will be withdrawn from the warehouse and will be repaired. When the refurbishment is finished, the equipment will be returned to warehouse as repaired material (Valuation type C2)  and the cost will be updated accordingly in the material master. After the settlement of the refurbishment order, the maintenance expense will be settled to the specific material, then the moving average price of this spare will be updated in the material master. So the moving average price of this spare will vary during the different phases of refurbishment.

Key process flows covered

• Equipment faulty and work order creation
• GR of bad part of store
• Initiate Refurbishment
• Order Creation
• Post operations 
• Post Materials & Order Release 
• Debit Note (If required) 
• Goods movement posting
• Refurbishment operation
• Good receipt serial numbers for refurbishment orders 
• Order Confirmation 
• Order Completion marks the completion of task.

Equipment Faulty and Work Oder Creation

• Detection of a faulty equipment
• Creation of work order for that faulty equipment
• Defining operations and Material required in Work order(2nd step)
• GR of bad part of store (3rd Step)

Initiate Refurbishment & Order Creation

• Initiate refurbishment: Manual step, Initiate refurbishment and plan the tasks
• Refurbishment order to be created on SAP, Required details include material, company/organization and business area

Post Operations

• Post operations to be performed in order. There will be a material assigned on which the order was created to the first operation.

Post Material and Release Order

• In case of additional material required for refurbishment. Post material in the components tab. 
• Note that you are already creating this order on one material which was assigned in the beginning
• Release and save order for further processing.

Debit Note

• If required this step follows the creation of order
• Make sure that the order created was released and saved prior to this step
• It is basically one print out which contains information about the material being issued by store. 
• This printout has to be submitted at store before issuing any material or in this case giving or receiving any material for refurbishment.
• This step is performed through T-code “zmm_res1”
• Goods movement posting
• This will be done on reservation number and once a copy of debit note is received by the Material Management user.
• Goods movement posting is done on T-code “MIGO”. 
• Important thing here is the reference number present in the refurbishment order components tab.
• Refurbishment operation
• Manual step
• Perform refurbishment operation using the material issued by store

Order Confirmation

• Here actual work hours and employee numbers can be assigned to the task performed
• There are two types of order confirmations.
• Individual confirmation
• Collective confirmation

Goods Receipt Serial Numbers for Refurbishment Orders

• This transaction is run by T-code IW8W
• Here user has to enter the Refurbishment
• After this, user has to follow steps in the below given order for completion of the Refurbishment Order.  
• Technically Completion 
• Settlement rule.

Settlement rule and Order Completion

• Once we click the order completion button, it automatically directs us to the settlement rule
• Cost center number is required in Settlement rule
• After the settlement rule order is to be completed
• This marks the end of process and the order cannot be changed again.

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Material Purchasing & Replenishment SOP

1.0  PURPOSE:

The purpose of this procedure is to provide guidelines for managing material master data, purchasing & replenishment of material for better results in any organization. This SOP guide the concerned in a respectable way for the favor of companies..

2.0 SCOPE:

This procedure covers steps involved in material creation, extension, deletion or any other action related to Material Master Data and PR (purchase requisition) creation requests .

3.0 RESPONSIBILITIES:

Stores Incharge / HOD will be responsible for ensuring compliance of this procedure and has the responsibility for managing all the operations related to Material Master Data.

End User shall be responsible to provide the material / PR (purchase requisition) creation request completed in all aspects

Planning and FBA (Finance, Business & Accounting) will be responsible to release / transfer the Budget in SAP as per authorizations

4.0 PROCEDURE

4.1 Material Master (Creation/Extension/Description Change & Deletion)

Following procedure shall be followed in maintenance of material master data:

• For any creation/change/deletion/bulk upload in the material master data, only Store Incharge and SAP administrator are authorized.
• For any material to be purchase the end-user checks availability of material code in SAP, If material already exists in other stations, it shall be requested to extend. If the requisition is for a new item of material i.e. material code not assigned yet, new item code creation request shall be processed by store Incharge upon receiving of approved material introduction form. 
• The Store Incharge / SAP administrator will also verify material codes existence in SAP prior to creating new material.

4.2 PR CREATION REQUESTS:

• Store Incharge / Site procurement Representative shall prepare PR (purchase requisition), upon receipt of PR (purchase requisition) Indent from end-user. The PR Indent should be complete in all respect with required approvals & justification. 
• After creation of the PR, Store Incharge / Site procurement Rep will intimate the PR No. to end-user for review. End-user will follow-up for further approvals within Plant.
• Site procurement Rep will follow & expedite the PR (purchase requisition) approvals, TE (technical evaluation), PAS. PO (purchase orders), Payment and provides updates to end-user. End-user should respond, received TE from SC within (desired time period) working days.

4.3 Replenishment of material (Generating Stores Purchase Requisition): On Re-order level intimation:

Following procedure shall be followed in preparation / generation of purchase Requisition (PR):

• Requisitions will be generated by Store / site procurement rep, based on material requirement Planning (MRP) for material with defined reorder point only.
• The reorder point shall be defined in the material master record of Spares and stock by Store Incharge in consultation with end-user.
• If a material hits re-order level on posting of debit note, intimation (e-mail) will be received to Store and PR (purchase requisition) shall be raised as per plant requirement as well or comment from respective users if required.

I will share my experience for material creation soon furthermore material master data introduction with the snaps will also published soon. For get useful information you must daily visit my blog.

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How to Dispose-Off the Scrap Material

1.0    PURPOSE:

The purpose of this procedure is to provide guidelines for removal of scrap material from company.

2.0    SCOPE:

This procedure covers the responsibility and the actions required for removal of material declared as scrap in store from Generating Stations

3.0 DEFINITION:

Scrap can be considered as any store item or substance, which is useless material or a broken, worn out, contaminated or spoiled item or unwanted material.

Surplus – Unnecessary Material 

4.0 RESPONSIBILITIES:

Section Head / HOD shall be responsible to declare the scrap material to be disposed off and initiate ‘Scrap Request Form ' duly signed and approved by the Station Head. 

Store will maintain the record of items declared as Scrap on the ‘Scrap Inventory Record.

Store Incharge will ensure that declared scrap material is disposed off at appropriate intervals. Store will initiate the ‘Form – A FOR SDF and raise the Scrap disposal request on portal as well for further processing and approvals. 

HSEQ Section shall provide necessary support during material storage at scrap yard and also responsible to ensure that the scrap is disposed off in accordance with the HSEQ Policy.  

HSEQ Section shall look after all Safety related issues and monitor the activities during Scrap Disposal Process. HSEQ also conduct the Safety Orientation to the contractor manpower.

Concerned Section shall provide necessary support during material storage at scrap yard where expert advice required particularly for Lubes and Chemicals etc and also responsible to ensure that scrap is disposed off in Safe manner.

Disposal Committee (nominated by Head Office Disposal Department) shall be available and ensure Smooth, Safe and Legal execution of Scrap Disposal. Disposal Committee is also responsible for approval of all the Gate Passes, completion reports and maintains the record of same. The Committee shall also resolve all the disputes arising during the process.

5.0 PROCEDURE:

• If any item / material deemed to be declared as Scrap, respective section (end user) shall initiate and submit the approved form Scrap Request Form - Attachment No. 2 to Store. Attachment 2A will be used for items other than Capex while Attachment 2B for Capex Items. The material is then transferred / dumped to the scrap yard at designated Areas.
• Store will maintain and update the Scrap Inventory Record and FORM A and raise the Scrap disposal request on portal as well for further processing and approvals.
• Scrap yard will remain barricaded to control removal or addition of scrap material. Any material removal / addition in the scrap yard shall be done through approvals on the relevant forms. 
• Risk Assessment of the Scrap yard shall be carried out on  Monthly basis by a team comprises of Representatives from Store, HSEQ and concerned sections
• Disposal Section shall inform station / security for bidder visit at least 02 days earlier.
• Site Instructions ‘Instructions for Contractor’ shall be issued to contractor at the time of tendering / contract award process by Disposal section. 
• Disposal Committee (nominated by Head Office Disposal Department) shall be available and ensure Smooth, Safe and Legal execution of Scrap Disposal. Disposal Committee is also responsible for approval of all the Gate Passes, completion reports and maintains the record of same. The Committee shall also resolve all the disputes arising during the process.
• HSE Team shall audit and monitor the Contractor for HSE compliance team is authorized to stop the work if observe any non compliance and communicate to Disposal / Audit Committee.

Refer to ‘ Site Instructions for Contractor’ for detailed process and HSEQ requirements.

All Gate Passes shall be signed by the authorized or designated Authority

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Emergency or Off Days Warehouse Opening Closing SOP

1.0 PURPOSE:

The purpose is to define the Opening and Closing of Store and to control entry into Store in emergency & off-days..

2.0 SCOPE:

This procedure covers all the activities for Store opening and closing during normal working days, off days / holidays and emergency situation during off working hours at all Generating Stations.

3.0 DEFINITION:

• HOD – Head of Department
• CCR – Central Control Room

4.0 RESPONSIBILITIES:

Store Incharge / Head shall be responsible for the compliance of this procedure and has the responsibility for managing all the Store Operations / Functions. 

Shift Incharge / HOD shall be responsible for compliance of their part in the SOP.

5.0 PROCEDURE

5.1 STORE KEYS

The store keys shall be available with the personnel as authorized by Company Director. These keys are held by:

• Store Incharge 
• Store Reps 
• Main Control Room

5.2 PROCESS (STORE FUNCTIONS)

Following process shall be followed as per situation mentioned

5.2.1 NORMAL WORKING DAYS / DUTY HOURS

Store staff shall be opening the store during normal working days by breaking the seal(s). At the time of closing, the door shall be re-sealed by signing of Store Reps. All other store doors remained sealed, until and unless required to open and seal again.

5.2.2 OFF WORKING DAYS / DUTY HOURS

Any requirement of store opening during off working hrs /off days shall be communicated to Store Inchage / HOD well in time.

In case of any unplanned requirement or odd time requirement, pick and Drop shall be arranged by the user dept / shift Incharge through pool vehicle. 

5.2.3 STORES OPENING IN EMERGENCY 

Following steps shall be followed for material issuance from Store in case of Emergency and the Store Staff is not available:

• The end-user shall contact Duty Shift Incharge in Main Control Room for material issuance.
• Duty Shift Incharge asses the emergency and proceed for issuance as per below mentioned process.
• Shift Incharge shall send an email to Store keeping Company Head in loop about opening of store.
• Duty Shift Incharge shall call end-user and security supervisor. The store keys shall be drawn from the break glass box & sealed envelope of “Store Keys” available in Main CCR room.
• Store shall be opened in the presence of Shift Incharge, Security Representative and end-user by breaking the seal of the store door. Through-out this activity Security Representative, Shift Incharge and End User will be available in store, till Store is re-locked and sealed again. Seal will be signed (sign/date/time) by all three officials.
• Once the issuance process completed, the keys will be sealed in the envelop (available in CCR, signed and stamped by Store Incharge).This envelop and the teared envelop will be kept in the Box 
• The issuance of material shall be recorded in Store opening / closing form (Attachment No. 1). Approved original Store opening / closing Form will be kept in store. One copy will be retained by Operation department and one copy by concerned department. 
• The end-user shall submit the Material Debit Note to Store within 24hrs of the issuance.
• Same procedure will be adopted if store is re-opened again and every time store opening / closing form shall be filled
• In case of fire alarm, same process will be followed.

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Standard Store Operations

1.0 PURPOSE:

The purpose is to define the functions relating to all activities within the main Stores and to define a method of Stores Control.

2.0 SCOPE:

This procedure covers all the activities for Stores Operations at stations. 

3.0 DEFINITION:

• Material Receipt Intimation (MRI) via email
• Goods Receiving Note (GRN)
• Debit Note  (DN)
• Debit Transfer Note (DTN)
• Credit Note (CN)
• Delivery Challan (DC)
• Dispatch Note / Gate Pass (DhN / GP)
• Purchase Order (PO)
• Supply Chain (SC)
• HOD – Head of Department

4.0 RESPONSIBILITIES:

(4.1) Store In-charge shall be responsible for the compliance of this procedure and has the responsibility for managing all the Stores Operations / Functions under supervision of his immediate officer. 

(4.2) GM / DGM / HOD of respective section is responsible to ensure Inspection of the received material within 7 working days of Intimation received from Stores excluding exceptional cases. Material Receipt Intimation will be circulated through email within 2 working days to concerned user department, with the exception of large deliveries whose initial inspection could not be done by stores within 2 days.  Respective user department shall also sign the GRNs as mentioned in Specimen Signature Mandate attached.

5.0 PROCEDURE:

(5.1) MATERIAL RECEIPTS

All the material will be received in Store receiving area along with Delivery Challan. Store team will reconcile the quantities against PO and note any discrepancy (shortages, evident damages etc.) and intimate Supplier keeping in loop SC and relevant department for necessary action.

The received material shall be placed in designated ‘Inspection Area’ in store, tagged as “material under inspection”. A copy of the Delivery Challan shall be acknowledged and returned to the vendor stamped as ‘Received Subject to Inspection’. Following steps shall be followed for further action.

• Goods Received Document (GRN-103 Inspection Document) shall be generated subject to Purchase Order release and user dept. shall be intimated within 2 days. User dept should inspect the material within seven days for acceptance / rejection and sign the GRN 103 accordingly in stores to avoid any delays.
• In case above time line is not met and inspection delayed due to any reason, comments shall be recorded in SAP while releasing GRN 105. Email of correspondence shall be attached with hard copy of GRN 105 if available.
• User shall log the inspection remarks in GRN 103 (Hard copy).
• If the goods are according to their specifications, GRN-105 shall be generated within 2 Days to reflect new stock. All conforming / accepted materials shall be properly placed to their designated location.  
• If the goods are rejected GRN-124 (Rejection Document) shall be generated.  Rejected materials shall be appropriately placed to their designated ‘Rejected Material Area’. SC / suppliers shall be intimated for necessary action within 5 days of inspection.
• HOD will nominate the team member(s) who will be responsible for coordination and signing of all GRN’s within the section as per this SOP.
• Any shortage / excess receipt of materials shall be dealt as briefed under:
• If the material received is less than the PO Quantity, GRN-103 shall be generated for the quantity received and the balance / short quantity shall appear in the system as material receivable until remaining quantity received. 
• If the material received is in excess than the PO Quantity, GRN-103 shall be generated for the quantity ordered and the excess quantity shall be returned to supplier.

(5.2) MATERIAL ISSUANCE

The relevant stores staff shall issue stock material (in SAP inventory) through a valid SAP generated DN against following:

• Debit Note – Cost Center (201) – Revex Items
• Debit Note – WBS / Network (281) – Capex / Asset Item, raised against reservation no. 
• Debit Note through Material Reservation against Work Order – (261 and 261Q – for Revex and Capex items respectively.
• User will send the email request if items required from other plant inventory, Requesting Store will then generate the DTN accordingly and handover to users for necessary approval and submission. Approved DTN will be sent to Issuing Station for Stock transfer to requesting station. 
• User shall review / delete the old and unnecessary reservations on quarterly basis.
• The following information shall be checked from SAP before any item is handed over to the bearer:
• Cost Center / WBS 
• Approve DN as per signature mandate (attachment 1)
• Material code and description
• Work order / permit number (where applicable).
• On receipt of approved Debit Note, stores authorized personnel shall issue material to user considering following:
• FIFO rule for covering warranty issue, shelf life, deterioration or obsolescence of material. 

(5.3) MATERIAL RETURNS (UNUSED ISSUED MATERIAL) 

User will send the email request to return the issued items to store. Store will generate return note (202 / 282 / 262) accordingly and handover the hard copy to user for necessary approvals and submission to store.

(5.4) MATERIAL TRANSFER 

Material shall be transferred from plant to plant by using movement type 301 and from one material code to other by using 309. Movement type 302 and 310 will be used for reversal for these transfer postings.

For issuance of Capex items (Project Stock) not already transferred to WBS, first it should be transferred to Project WBS using desired movement type 412Q/415Q, and then issued through 261Q / 281.

(5.5) POSTING & RECORD

Authorized personnel shall maintain the record and also update / post in SAP accordingly.   

(5.6) SAP UNAVAILABILITY:

In case SAP is unavailable due to any reason, manual DN shall be used as an alternate during the period. As soon SAP is restored posting shall be done accordingly.

(5.7) PAYMENTS/CHEQUES HANDLING

Payment Voucher (Form 7) shall be initiated by FBA rep as soon the PO received, signed by end user HOD and plant head. 

All Advance and other payments (cheques) of Services & Materials POs shall be handled and released to supplier by FBA rep at plant.

For releasing Payments, FBA at plant shall check Invoices and other required documents and coordinate with Store regarding materials acceptance/completion of delivery.

FBA rep will also maintain the record of released and available cheques will circulate on Fortnightly basis.

(5.8) BIN LOCATION IN SAP

Material Bin location will be sent for update / uploading in SAP as and when required.

(5.9) DISPATCH OF GRNS

After complete approvals as per signature mandate, All GRNs with other necessary documents shall be dispatched to C&A/FBA (HO) for further processing of payments or settlement of payments

(5.10) FIXED ASSET TAGS

Fixed Asset Tags shall be issued against Asset Items (AUC / WBS Items) where necessary as per FBA SOP “SOP for TAGGING OF FIXED ASSETS”. User shall get the tag issued from Store with the material and consult with FBA site Rep in case of any doubt.

(5.11) SIGNATURE MANDATE:

01) Signature Mandate – DN / DTN / CN

For Debit Note, Credit Note and Depot Transfer Note, Approval shall be required from Head of Department. 

02) Signature Mandate – GRN 103

Below signature mandate shall be used for GRN. Inspection remarks should also be logged in either case accepted or rejected.

03) Signature Mandate – GRN

Below signature mandate shall be used for GRN.

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