Quality System Procedure
Storage and AssessmentDoc. Id No.REVISION
QSP-5762-011
DATEPAGE
14.02.14 25 OF 26
Quality System Procedure
QSP- 5762-01 Storage and Assessment
Revision No. : 1
Effective Date: February 14, 2014
1PurposePurpose of this procedure is to provide a consistent
procedure for the storage to prevent damage or deterioration of
product, pending use pr delivery.
2ScopeThis procedure is responsive to element 5.7.6.2 Storage
and Assessment, of API Specification Q1 Ninth Edition.
3Responsibilitya) Logistic Coordinator shall: Ensure assigned
personnel are appropriately trained to operate material handling
equipment. Manage product handling and storage activities Perform
product handling and storage activitiesb) Logistic Managers
shall:
Received the materials supplied by the suppliers or sent by the
user departments with return notes or transferred from other units.
Arrange physical and quality inspection. Maintain records of
rejection goods and return these to the suppliers. Lodge claims
against supplier/ carriers for storages/ damages Arrange surplus/
redundant stores and scrap material, maintain records for the same
and arrange their disposal. Housekeeping and other allied work
relating/ stores Maintain records/ book relating to the above
functions
c) All PT BORNEO MANDIRI INVESTMENT
Any personnel who is assigned to perform the relevant work of
storage, must perform it.4Details of Procedure4.1Receipt
a. Any items of goods or materials that enters the organization
always enters through the stores. Similarly, every item unless
specifically excluded, has to leave through the store. Store is the
final account keeper of all materials. Fills it in the Receiving
Inspection Form (LOG-563-01).b. All the incoming materials from
suppliers and other units of the organization shall be received at
stores. Check that the goods being received match the
specifications provided in the information.c. Arrangement need to
be made for transportation, unloading and receiving of materials,
and handling over the same custody group checking up of packages,
checking up materials with details of invoices and purchase order,
identifying discrepancies, if any, record keeping, preparation of
stores receiving cum inspection report, and for arranging,
despatches of materials-returned to suppliers, sent for repair or
transferred to other units of the organization. Claims for short
delivery, non-delivery or damages en-route are required to be
lodged in time with the underwriters, carriers and suppliers as per
the provision of contracts. Replacement suppliers need to be
arranged for above losses and also for technical rejections (Supply
of wrong or substandard materials by suppliers)
d. Once the adequacy is established and quantity is verified the
material is sent for testing for quality parameters.e. Sometimes
quality control tests are elaborate and time consuming. If the
policy of receipt is to unload the material subject to quality
control acceptance, it is cleared for unloading.f. Unloaded
material is kept on the hold if it not yet cleared by quality
control department. If the material is rejected it is sent back to
the supplier after clear.g. This includes the physical unloading of
incoming transport, checking, recording of receipts, and deciding
where the received goods are to be put away in the warehouse. It
can also include such activities as unpacking and repackaging,
quality control checks and temporary quarantine storage for goods
awaiting clearance by quality control.4.2Inspection
a. Quality and quantity check of the incoming goods for their
required characteristics.b. It has to be ensured that every item
received in stores is checked from quality angle. Any failure of
poor quality materials may put the organization to heavy losses,
especially those of components of vital equipment.
c. Inspection can be carried out by Logistic Coordinator.
Stores, however, it is required to maintain continued and sustained
liaison with inspection people for prompt inspection.
4.3Repackaginga. Incoming lot may be having non-standard
packaging which may not be stored as it is in the respective
location. In those cases these materials have to be pre-packed in
unit loads/ pallet loads suitable for storage.
b. Makes sure that the goods being packed match the required
specifications.
c. Protect the goods from damage while they are being
packed.
d. Pack the goods using the correct type and quantity of packing
materials and minimize any wastage. 4.4Sortationa. This enables
goods coming into a warehouse to be sorted into a specific customer
order immediately on arrival. The goods then go directly to order
collation. It is sorted by location or where inventory needs to be
put according to the category of items or products based on class,
rating, material etc. 4.5 Storagea. Storage should also ensure
protection against deterioration, damage and pilferage. The
premises should be clean, well ventilated and maintained at even
dry temperature to minimize the effect of condensation.
b. Storage practices include:
i. Confirm the area to be used for storage and ensure it is
suitably prepared to receive the goods.
ii. Identifying any health, safety and environmental issues
relating to the goods to be stored.
iii. Storage racks will be provided for storing tools and hoses
and must be marked with maximum loading values.
iv. Stored items should be clearly identified with labels and
signs designed to suit the storage environment. Items must not
protrude beyond the sides of the rack or shelf.
v. Racks should not be overloaded. Any indication of overleading
or stress in racks and shelves e.g. sagging, cracks or buckling
must be reported, the items immediately removed and the shelf or
rack repaired or discarded.
vi. Heavy items that are manually handled must be stored at a
low height to minimize damage associated with a potential fall.
Access should be provided that allows for removal of items by use
of mechanical aids.
vii. Any material stored at height in the warehouse must be
strapped to the pallet and any small items on pallet must have a
pallet collar. Stepladders or similar approved means should be used
for safe access to storage areas that are above the users shoulder
height.
viii. Storage facilities will be provided for files, personal
protective equipment, cleaning materials, etc. Storage items on the
top of cabinets or other furniture and fittings not specifically
designed for storage is not permitted.
c. Detailed system is adopted for location and labelling of
items while in storage. Storage plan is made keeping in mind,
Nature of the product-physical state, toxicity, rust level and
other hazards. Volume and weight-heavy or light Movement
frequency-fast moving or slow moving Point of used. Materials are
stored on the basis of groups and equipments. General shop supply
items like nuts, bolts, rivets, etc are kept at one place.
e. Bigger items like wire ropes, steel materials etc. are kept
in sheds outside.
f. The store items are stocked in such a way that all the items
are easily accessible for the purpose of issue and for the
counting, measurement, weightment etc. at the time of physical
verification.g. It is covered under the form Storage Record Form
(STO-5762-01) and Stock Log Book (STO-5762-02).4.6 Packing and
Shippinga. Picked goods as per the customer order are consolidated
and packed according to customer order requirement. It is shipped
according to customer orders and respective destinations.
4.7 Delivery Fulfilling customer demand for the item in minimum
time, keeping quality high and cost minimum is issue. Quantity
issued against the requisition will be clearly stated.
When issuing the products, care will be taken to ensure that it
is issued on the basis of first in, first out.
The person presenting the products requisition will be allowed
to take delivery of the products against the requisition provided
he is in a position to give proof of his identity.
For all products issued and going out of place area, (to a
contractor for fabrication, for example), delivery will be
prepared.
At the end of each day the completed product requisitions will
be forwarded to the ledger section of the account department with a
summery of store requisitions.4.8 Housekeepinga. Maintenance of
spic and span cleanliness in the store and ensuring principle of
place for everything and everything in its place is fully
implemented.b. Every individual is responsible for maintaining the
site in a clean and orderly manner this includes, but is not
limited to:
Equipment is stored in the correct location
Tools should be returned to their storage area after use.
Cleaning routines, methods and materials for specific items of
equipment. Horses are rolled up and stored where possible elevated
from the ground. Hoses should never be left lying across walkways,
without appropriate controls being implemented.
Rubbish is disposed of in an appropriate waste disposal area/
bin, including appropriate disposal of PPE, e.g., gloves and ear
plugs.
Process spills including both liquid and dust releases should be
contained and cleaned up within a reasonable timeframe.
Bunds should be clear of rubbish and in the event of a spill,
cleaned and de-contaminated.
Walkways should be clear of equipment, tools and rubbish.
c. Safety consideration for housekeeping
In addition to the site mandatory PPE requirements ensure:
Gloves are worn and are the appropriate type for the activity
and, if chemicals are present, check the material safety data
sheets prior to starting activities.
Consideration should also be given to the use of respiratory
protection equipment.4.9 Surplus Managementa. Effective disposal
system for unneeded material to reduce inventory cost and proactive
measures to eliminate deterioration and obsolescence.b. Obsolete
items are good in all respect but have no useful role in the
company due to changes that have occurred in the course of time.c.
Surplus items are those that have accumulated due to faulty
planning, forecasting and purchasing. Hence a usage value is
associated with these items.d. Scrap is wastage generated due to
processes like turning, or due to bad manufacturing.
4.10Verification
a. Stock verification to eliminate gap between information and
physical stock. In stores some items are maintained as stock items.
The stores triggers the procurement cycle for such items when a
predetermined reorder level is reached. Hence correct stock
position through verification is critical to ensure no shortage and
no excess for the items.b. Excesses and deficiencies found during
verification are properly investigated, explained and account for.
It is covered under the form of Ecess/ Deficiency/ Damage Report
(EDDR) (STO-5762-03).c. Frequency of verification:
Perpetual verification/ count of stores and spares will be
carried out through the year, annual programme of verification will
be prepared before the commencement of the year and got approved
from the competent authority. The programme will be evenly
distributed throughout the year.
d. Inventory count sheet:
Stock verifiers will record result of verification initially in
their field books from which results will be entered into the
inventory count sheets. The count sheets will show the location
description of item verification, part no.
Actual balance found excess or shortage, value of the excess or
shortage, etc. in the count sheet will be signed by the store
officer or his representative in acceptance of the physical
balance. A copy of count sheet will be given to the store officer
for receipts.
e. Following given guidelines will be observed for stock
verification:
i. Usually one days notice will be given to the storekeeper in
regard to the group of stores verification of which is proposed to
start.
ii. Normally all articles in the stores will be given
verification by physically measuring, counting, welding, etc. these
may, however, be some exceptions to the general rule e.g. packages
of electrical material liable to damage or certain items of ball
bearing etc. which have to be preserved in the manufacturers
original packing. In such case, the stock verification will obtain
a certificate from the stores officer that the quantities shown on
the packages are correct.
iii. Stock verification will not enter the book balances in the
count sheet from the cards or the store ledger before completion of
verification of the items in question.
iv. He will obtain a certificate that all available stores have
been presented for verification.
v. Presence of logistic coordinator or his representative is
required during stock verification. The representative of stores
shall sign token of his acceptance of verification results.
vi. Large discrepancies found during verification will be
investigated in accordance with the prescribed procedure.
vii. In addition to the physical verification of stock, the
stock verifier will also look into the following:
Case of errors classification i.e. items which have not been
classified correctly.
Adequacy of security arrangements
Items declare surplus but not moved for one year thereafter.
Unauthorized or unaccounted stock, if any, where unaccounted
material is found, proper investigation will be made to ascertain
how the material found its way to the warehouse.
Whether issues being made on age basis.
f. Discrepancies during stock verification
The logistic coordinator will explain the discrepancies found as
shown on the count sheet within one month of receipt of such
sheets. While explaining the differences, following will be kept in
view:
i. The discrepancies between the physical balance and card
balance adjusted with the approved of the competent authority.
Appropriate certificate that the discrepancies have been adjusted
after due examination will be recovered by the logistic coordinator
on the count sheet.
The difference between the physical balance and the store ledger
balance will then be valued, and the total amount of difference
will be transferred to account code store suspense account by
credit/ debit to the relevant inventory account code with the
approval of the head of the unit.
These differences will be properly investigated and submitted to
the board for approval of write off the shortages and adjusted of
surpluses.
g. Monthly/ Quarterly report on stock verification
A monthly/ quarterly report on the progress of stock
verification will be sent by the unit accounts department to the
corporate accounts department detailing the number of items held in
stock, number verified during the month/quarter, progressive total,
variances and value of variances.
4.11Records
a. Maintaining records of receipt and issue.b. Updating the
stock levels as per movement of materialsc. Basic records of store
are bin card and stock register log book.
Bin card is placed on the bin in which items are stored. This
gives information about receipt, issue and balance. Storage record
and its log books must kept4.12Overview of Procedure Flow
Overview of storage procedure flow is concluded in Figure 1 of
Appendix A.
5.0Security of the Stores
Following guidelines will be observed for safe custody of
materials in this regards:
i. Items which are of the pilferable nature will always be kept
under lock and key. All issues of such items must be personally
supervised by the store keeper.
ii. While closing the store at closing hour, it will be ensured
that all strong rooms, cupboards, lockers etc., are properly
locked.
iii. Proper duty list of different personnel will be prepared
and observed.
iv. All stores premises including warehouse, store yard etc.
shall be protected against fire risk by provision of fire
extinguishers, and other fire fighting equipment. In stocking of
materials care will be taken so as to restrict the fire hazard.
v. Storage of proper types will be provided for different
categories of stores.
6.0Storage Assessment
In order to prevent deterioration, the condition of products or
constituents parts in stock shall be assessed at least once
quarterly or when it is necessary. Storage assessment is covered
under the form of Storage Assessment (SA) Form (STO-5762-04).
Storage assessment details include:
a. Inspect the warehouse to determine whether:
i. The arrangement of inventory is such that an accurate count
is possible.
ii. The inventory is in good condition with adequate storage
space, and whether items are properly packed and binned in a
convenient manner for counting.
iii. Scrap, obsolete and damaged goods adequate identified and
segregated.
iv. Inventories appear to adequately safeguard against access by
unauthorized persons and protected against deterioration.
b. Keep stock at required levels
i. Checking the existing stock against the stock levels by
referring to the Stock Log Book (STO-5762-02).
ii. Observe inventory being counted and personally perform test
counts to verify counts.
iii. Check and calculate the stock on hand by finding out the
quantity of stock on hand (inventory control card, bin card, stores
record or any records of store).
iv. Identifying damage or faulty stock, or out of date
items.
v. Check whether the stocks are labelled/ tagged and positioned
properly and accurately. And checks that quantities and description
are properly shown on lavels/ tags.
vi. Check the latest update of stock levels
vii. Identifying any problems with keeping stock at the required
level, and take the appropriate action to deal with them.
c. Packaging of stored goods
i. Obtain relevant information and confirm the goods that
require packing.
ii. Check that the goods being packed match the specification
provided in the information.
iii. Check that the goods are packed by using the correct type
and quantity of packing materials and minimise wastage.
iv. Check that the packages are labelled with the correct
information.
v. Identify any health, safety, and security issues relating to
the packing of goods, and make provision for them in accordance
with organizational procedures.
vi. Identify any problems with packing the goods and take the
appropriate action to deal with them.
d. Test obsolete, slow-moving, scrapped or damaged listing
Determine whether slow-making, obsolete, scrapped or damaged
items have been adequately identified by:
i. Obtaining and receiving a schedule of items that have shown
little or no recent movement.
ii. Tracing information obtained during the observation of the
physical inventory to management reports of slow moving, obsolete,
scrapped of damaged item.
iii. Reviewing detailed inventory records, bin cards, etc.
iv. Reviewing periodic reports to management concerning such
information.
v. Discussing management quantities in the light of current
production requirements, sales order received and future marketing
forecasts; examine documentation, including where appropriate, aged
listings of inventory balances, substaining the information
obtained.
vi. Discussing with management whether any substantial inventory
amounts may not be realizable because of major delays or disputes,
defective work, etc.
7.0Method of Storage7.1Basic Method for Storing
It shall be necessary for PT Borneo Mandiri Investment to select
the most optimum method taking into account the nature, size and
weight of materials and capacity of the warehouse and open storage
area.
The basic method of storing are categorized and shown below:
a. Case pilling up
This method is suitable for items packed in same size and type
of cases.
b. Ground storing or floor storing
This method is suitable for extra heavy items
c. Plate stacking
This method is suitable for plates
d. Cross-wise stacking
This method is suitable for square timbers or the like to keep
them stable and dry.
e. Stepped stacking
This method is suitable for cylindrical items, such as pipes,
drums etc.
f. Pyramid stacking
This method is suitable for small cylindrical parts or the
like
g. Offset stacking
This method is applied, when quantity check of the items is
required.
h. Boxed storing
This method is suitable for fragile items, such as electric
bulbs.
i. Pallet storing or skid storing
This method is applied, when transportation of items in certain
unit is required.
j. Vertical storing
This method is suitable for flat items such as gaskets,
reducers, flanges etc.
k. Hanger storing
This method is suitable for wires, ropes or small cables
l. Hooked nail storing
m. Bag piling
This method is suitable for items in bags. The directions of
bags shall be changed at each layer.
5Reference
a) Quality Management System (QSM-01 Rev.2)
b) Preservation of Product API 6D (QSP-5762-6D)7Appendix
Appendix AOverview of Storage Procedure Flow chart
Appendix BReceiving Inspection Form (LOG-563-001)Appendix
CStorage Record Form (STO-5762-001)
Appendix DStock Log Book (STO-5762-002)
Appendix EExcess/ Deficiencies/ Damage Report (EDDR)
(STO-5762-003)
Appendix FStorage Assessment (SA) Form (STO-5762-004)Appendix A:
Overview of Storage Procedure Flow chart
Stage Procedure low chartResponsibilities
1. Receipt
2. Inspection
3. Repackaging
4. Sortation
5. Storage
6. Packing and shipping
7. Verification
8. Records keeping
Logistic Coordinator
Logistic coordinator
Logistic coordinator
Logistic coordinator
Logistic coordinator
Logistic coordinator/ logistic manager
Logistic coordinator
Logistic coordinator/ logistic manager
Appendix B: Receiving Inspection Form (LOG-563-001)
Appendix C: Storage Record Form (STO-5762-001)
Appendix D: Stock Log Book (STO-5762-002)
Appendix E: Excess/ Deficiencies/ Damage Report (EDDR)
(STO-5762-003)
Appendix F: Storage Assessment (SA) Form (STO-5762-004)
Continued in the following page.
Continued
Receives incoming goods at the store
Maintain all the relevant records
Verification of items/ products need to be carried out to
identify any excess or deficiencies. If found any excess/
deficiencies, it must be investigated.
Picks goods as per the customer order are consolidated and
packed based on customer order requirements and ships it according
to required destination
Label and marks the items/ products properly for storage. It is
stored based on the requirement specified by items/ products.
The items/goods are sorted based on category, class, rating,
material, etc.
If the existing packaging does not fulfill the requirement, it
needs to be repackaged. Otherwise, this step can be skipped.
Quality inspections such as dimensional etc
Checks the goods with Purchase Order and relevant documents.
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