16 Questions
According to the Stock Write-Off & Disposal process, what is the objective related to moribund materials?
To ensure that all identified moribund materials which cannot be used elsewhere are written-off for disposal
What type of stock processing shall be treated as disposal stock?
Excess, obsolete, or damaged stock once approved
What is the requirement before disposing of an item from inventory?
Confirmation from the primary user department that there is no further use for the item
How should the disposal of goods conclude, according to the Stock Write-Off & Disposal process?
By means of SAP issue movement type transaction 551 (withdrawal for scrapping)
What is one of the objectives of the Stock Write-Off & Disposal process?
Reduced cost of storage and avoidance of wastage
In what manner should moveable assets be removed, if approved?
By means of transfer to another department
Who is responsible for identifying materials to be disposed in the User Department?
Asset holder
What is the purpose of the Disposal Request Form (DRF)?
To initiate the disposal process and track progress
Who is responsible for registering DRF details and circulating the list of materials to other departments?
MRP Controller
When is a Disposal Request Form (DRF) forwarded to Finance & Accounts (F&A)?
(excluding direct expense materials)
Who reviews DRF to determine if potential hazard exists and contacts HSE or ETSD for technical input?
(MRP Controller)
What is considered in making a recommendation for disposal?
Potential hazard review
Who approves or endorses for higher approval based on asset book value?
User Department
What happens if a Disposal Request Form (DRF) is not approved?
It is returned to the disposal originator.
What documents are included in Input/Output Documents?
Approved Disposal Request Form (DRF)
What are the Performance Measures related to?
Circulation and response timeliness
Study Notes
- Upon completion of a project, the Project Manager and Supply Chain Manager review residual/surplus materials.
- Materials may be returned to inventory or disposed of.
- Guidelines for disposal include materials that are no longer fit for use, in excess of requirements, obsolete, or damaged.
- Disposal requests must be processed in a controlled, detailed, and transparent manner.
- Disposal Request Form (DRF) is used to initiate the disposal process and track progress.
- For stock disposal: Asset holder (User Department) identifies materials to be disposed, obtains approval, and forwards approved DRF to SCM MRP Controller.
- SCM MRP Controller registers DRF details, circulates list of materials to other departments, and arranges for transfer to other departments or disposal.
- For asset disposal (excluding direct expense materials): SCM MRP Controller forwards DRF to Finance & Accounts (F&A) for adjustment to stock records.
- F&A endorses DRF and returns net book value to MRP Controller.
- SCM MRP Controller reviews DRF to determine if potential hazard exists and contacts HSE or ETSD for technical input.
- Recommendation for disposal is made based on review, including methods of disposal such as sales to third party, auction, or destruction.
- Approval of disposal is sought from the approving authority.
- User Department approves or endorses for higher approval based on asset book value.
- If DRF is not approved, it is returned to the disposal originator.
- If DRF is approved, it is forwarded to the MRP Controller and Warehouse for disposal process to commence.
- Input/Output Documents include Approved Disposal Request Form (DRF) and Approved Materials Issue Voucher (MIV).
- Performance Measures include timeliness of circulation and response to list of materials to be disposed, accuracy of the DRF, and accuracy of the MIV.
Learn about the process of writing off and disposing of moribund materials and non-moving items according to NNPC Stocking Policy and Asset Management Principles.
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