KGG

KENT GERMAN GLOBAL (KGG) LTD

ENGINEERING, PROCUREMENT & CONSTRUCTION

(EPC)

MATERIAL HANDLING, STORAGE & LOGISTICS

PROCEDURE

Rev DATE:
PREPARED BY REVIEWED BY APPROVED BY
00 15-01-21 VICTORY
KENNETH ODIA
ONOFUA

SOMTO NWACHUKWU KENNETH ODIA

01 20-11-23
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MATERIALS MANAGEMENT PROCEDURE

STATEMENT OF AUTHORITY

This Materials Control Procedure has been prepared to comply with KGG operations to
satisfy customer requirements. The procedure is the key working document that links all
materials control issues pertaining to yard and site construction and management of all
operations.

The Materials Control Procedure is issued with my authority and approval. Responsibility
for compliance with its provisions rests with all personnel assigned whose work are
defined therein, with managers and supervisors playing the leading role.

The responsibility for maintenance of the procedure, and for monitoring compliance with
it, rests with the Quality Assurance & Quality Control Manager, while the Materials
Manager is the document owner.

COUNTRY MANAGER

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TABLE OF CONTENTS

Description Page

1.0 INTRODUCTION ...................................................................................................

Policy 5
Purpose 5
Definitions 5
Responsibilities 7
Implementation 7

2.0 MATERIAL COORDINATION/CONTROL ............................................................ 8

MATERIAL RECEIVING DOCUMENTATION .................................................................. 8

Policy ................................................................................................ 8
Purpose............................................................................................. 8
Affects ............................................................................................... 8
Responsibilities ................................................................................. 9
Implementation ................................................................................. 9
Attachments ...................................................................................... 9

MATERIAL EXCEPTION REPORTS ............................................................................... 11

Policy ................................................................................................ 11
Purpose............................................................................................. 11
Affects ............................................................................................... 11
Responsibilities ................................................................................. 12
Implementation ................................................................................. 12
Attachments ...................................................................................... 17

MATERIAL STORAGE STANDARDS, MAINTENANCE

AND PRESERVATION ................................................................................ 19

Policy ................................................................................................ 19
Purpose............................................................................................. 19
Affects ............................................................................................... 20
Responsibilities ................................................................................. 20

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Implementation 20
Attachments 21

WAREHOUSING SAFETY ............................................................................................... 21

Policy ................................................................................................ 21
Purpose............................................................................................. 21
Affects ............................................................................................... 21
Responsibilities ................................................................................. 22
Constraints ........................................................................................ 22
Implementation ................................................................................. 22
Warehouse Safety Guidelines........................................................... 23

MATERIAL ISSUE DOCUMENTATION ........................................................................... 35

Policy ................................................................................................ 35
Purpose............................................................................................. 35
Affects ............................................................................................... 35
Responsibilities ................................................................................. 36
Implementation ................................................................................. 36
Attachments ...................................................................................... 37

JOBSITE WAREHOUSING ACCOUNTABILITY ............................................................. 38

Policy ................................................................................................ 38
Purpose............................................................................................. 38
Responsibilities ................................................................................. 38
Implementation ................................................................................. 38
Attachment ........................................................................................ 40

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INTRODUCTION

Policy

The policy for Material Control is to develop and implement the systems required
for the efficient and effective receipt, inspection, preservation and disbursement of
material, maintenance of required and auditable historical data and to advise
Construction and Operations management of potential problem areas.

Purpose

To establish responsibilities within the Construction Materials Control Group and

to establish a system of checks and balances so as to assure clear inventory
accountability and orderly flow of materials from Vendors to KGG and
Subcontractors, where necessary. This covers receiving, inspection,
maintenance, preservation, storing and issuing of material, along with the
preparation and authorization of documents for their disposition.

Definitions

Below are definitions of terms used in these procedures: Damage

Report

A record of the visible damage detected upon receipt from the carrier or concealed
damage determined upon inspection following unpacking.

Documentation

Any written or pictorial information describing, defining, specifying, reporting or

certifying activities, requirements, procedures or results.

Inspection

Activities such as measuring, examining, testing, gauging, one or more

characteristics of a product or service and comparing these with specified
requirements to determine conformity

Material Receiving Report (MRR)

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The basic document of materials receiving It records all pertinent information from
vendor shipping and purchase order documents about what was received.

Material Exception

A deficiency in characteristic, documentation or procedure which may render the

quality of an item unacceptable as is. Examples of material exception include:

Physical defects
Tests failures
Incorrect or inadequate documentation
Deviation from prescribed processing
Inspection
Test procedures

Material Exception Report

Record of material delivered that has a deficiency in requirements spelled out on

purchase order or bill of lading.

Overage

Any excess over and above that stated on carrier’s freight note or supplier’s
delivery receipt. It can also be excess material over and above what is listed in
the purchase order.

Shortage

Non-receipt of material stated on the carrier’s freight note or supplier’s delivery

documentation. It can also be non-receipt of materials listed on the purchase
order.

Over and Short Report

A record of quantity deviations from the freight bill, delivery receipt and purchase
order as determined during material receiving.

Physical Inventory

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The material which is on hand at any one time by actual count.

Store Requisition

A form used to request materials from the store or warehouse.

Responsibilities

Materials Manager

The Materials Manager has the authority and responsibility for ensuring the
implementation of Material Control Procedures and reports directly to the
Administration and Finance Manager.

He shall be the focal point for all matters relating to scope of material supply.

The Materials Manager shall monitor subcontractor or vendor material scope of

supply and shall audit subcontractor or vendor material control and procurement
procedures as deemed necessary. The Materials Manager shall review all field
requisitions for additional direct material ensuring non-availability at the jobsite,
and/or outstanding purchase orders. He shall liaise with Projects and Operations
Management on materials delivery schedule and advise on problem areas.

Implementation

The process of Materials Control comprises seven basic elements:

Warehouse safety program to ensure efficient and safe working conditions for
warehouse employees.

Monitoring materials delivery schedule.

Receipt and inspection of materials in accordance with company procedures and

specifications.

Protecting and storing materials until needed.

Issuing materials as authorized and in line with KGG operation’s MTO’s.

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Control of field engineering material changes to any project surplus and final
reconciliation of KGG scope of material supply.

Warehousing accountability and physical inventories to ensure accuracy in control

documentation for receiving, inventory maintenance and issuing.

MATERIAL COORDINATION/CONTROL

The following reports will be provided to the Materials Manager prior to receipt of materials:

Material Status Report (See Procurement Plan – Document No. AS-QM-PRPL-

001)

Bulk Material Consolidation Report (with detail support by drawing) (see

attachment). These reports define the baseline for receiving, handling, storing and
transferring materials. They will provide all necessary information for tracking
materials from their initial take-off in Engineering up to receipt. These reports,
along with copies of all purchase orders and change orders will be provided to the
Operations Management team by the Procurement department.

MATERIAL RECEIVING DOCUMENTATION

Policy

Receipt of all material and equipment at the jobsite/compound shall be

systematically documented.

Purpose

To ensure that transfer of material into custody is handled expeditiously and that
records are complete and accurate.

Affects

Procurement Department

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Expediting, shipping, monitoring and reporting on material as well as progress

payment documentation for the freight forwarding subcontractor.

3.3.2 Operations Department

Progress reporting on materials receipt.

Responsibilities

Materials Manager

The Materials Manager shall have overall responsibility for establishing and
ensuring compliance with materials control documentation procedures.

Warehouse Supervisor

The Warehouse Supervisor reports to the Materials Manager and oversees

receiving and issuing of materials in accordance with approved documentation
and general warehouse operators.

Implementation

Warehouse personnel receive, under the control of the Warehouse Supervisor,

materials arriving at the yard or jobsite by truck or other conveyance and signs all
delivery dockets for release of carrier by package count only. Evident damage
shall be actioned in accordance with Section 3 of this procedure.

All delivery documents covering packaged shipments received in apparently good

order shall be stamped “Received Subject to Inspection for Concealed Damage”.

If packaged shipments received are damaged, this shall be documented per

procedure “Material Exception Reports”, these packages shall be immediately
opened and checked for damage.

Receipt from carrier and transfer to storage shall be accomplished with care to
ensure complete and accurate records are maintained and exposure to damage
eliminated. This work shall be carried out under warehouse staff supervision.

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Packages shall be sorted into storage category; materials requiring environmental

control will be checked and placed into storage first.

Detection of over, short, damage or material exception shall be documented in

accordance with Section 3 of the procedures by warehouse staff.

Identification of Materials

Materials received shall be positively identified against the covering purchase

order and requisition number, including reimbursable items where possible.

The Manager of Procurement shall be contacted when no purchase order is on file

for the materials received.

Material Receiving Report (MRR)

A completely filled out Material Receiving Report shall be issued for each material
shipment received by referencing the relative purchase order number within one
week of receipt at the yard or site.

The MRR complete with purchase order data is then confirmed by checking this
data against delivery dockets. Any difference is then documented on the
appropriate form, i.e. over and short damage report, and/or material exception
report.

All MRR’s shall be filled out completely and shall be distributed as indicated below:

There shall be only one purchase order per MRR

There shall be a new MRR for each purchase order shipment
The requisition/purchase order number(s) shall be listed on all MRR’s
The MRR is marked” complete” when the purchase order is totally fulfilled by this
shipment and any previous shipment.

Distribution of the MRR shall be as follows:

Original : MRR file

Copy : Warehouse P.O. file

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Copy : Procurement
Copy : Project Control

Daily Receiving Report

A daily receipt summary shall be issued to advise material received on a daily

basis and shall be distributed to procurement on a weekly basis.

3.6 Attachments

Material Receiving Report (MRR)

Daily Receiving Report

MATERIAL EXCEPTION REPORTS

Policy

All materials and equipment received shall be checked to determine any overage
or shortage against quantity purchased.

All material and equipment received shall be checked to detect any shipping or
transportation damage.

All material and equipment received shall be checked to determine compliance

with purchase order specifications.

Purpose

To establish documentation resulting from checking required to substantiate

claims and further procurement action.

To ensure the quality of the material received meets the job specifications.

Affects

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QA/QC Department

Inspection of damaged and material exceptions of material or equipment.

Responsible for determining and accepting that documentation required by the

purchase order has been supplied

Procurement Department

Disposition of overages, rectify shortages.

Site Engineer

Disposition of damaged and material exceptions of material or equipment.

Responsibilities

Materials Manager

The Materials Manager shall have overall responsibility for establishing and
maintaining effective material inspection instructions.

Warehouse Supervisor

The Warehouse Supervisor shall be responsible for preparation of the appropriate

document and obtaining signatures as required.

Implementation

Shortages and visible damage detected at time of delivery from the carrier shall be
assumed to have occurred in transit. The carrier agent’s acknowledgement of the
delivery condition shall be obtained to permit recovery of costs by the insurer
and/or carrier. Field material control will issue the applicable over/short, damage
report and make required distribution.

When documenting receipt of damaged materials, first take photographs of the

damaged load, and/or broken blocking, bracing, etc., while the material still

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reposes on the truck. Photographs are indispensable and shall be taken by

warehousing personnel in all instances when damage is apparent to materials and
equipment on the vehicle.

Materials shall be received only as purchased with exceptions taken to any

deviation.

Deliveries unacceptable due to damage or material exception shall be segregated

and quarantined.

These items shall remain in quarantine until the “Action” requirements of the site
engineer listed on the damage report and material exception report are completed
and signed accepted by QA/QC inspection staff. Items are then released from
quarantine.

Items which cannot be rectified onsite shall be:

Returned to vendor for repair

Replaced by new items from vendor

Use a rubber receiving stamp of the following type to stamp the original freight
note:

Received in apparent good order except as noted, but subject to inspection for
concealed damage. (Note any apparent loss or damage here).

Date (Printed Name) (Signature)

P.O. No.: MRR No.:

The receiving stamp and any applicable loss or damage notations are to be
applied to the original freight note, plus one copy; the original goes back to the
carrier; a copy is retained for use in preparing the MRR.

After uncrating or unpacking goods, during inspection, verifying actual count and
comparing purchase order quantities and descriptions with packing lists, various
discrepancies (over, short, concealed damage, or material exceptions) can occur

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which will prevent the writing of a clean material receiving report. Any time that
equipment or materials which vary in quantity from that claimed by the vendor do
not meet purchasing document description or specification requirements, or are
received in a damaged condition, supplemental reports must be initiated to assure
rectification and to expedite the receipt of items which may be critical to the
construction schedule. The supplemental reports are:

Over and Short Report

Damage Report
Material Exception Report
Non-Conformance Report

Over and Short Report

An over report is prepared by the warehousing group whenever materials or

equipment received are in excess of the purchase order or packing slip quantity. A
short report is prepared when the quantity of item(s) received is less than shown
on the seller’s packing slip.

Two simple rules govern warehousing and project account handling of over and
short materials and equipment situations:

Receive only the quantity of materials or equipment purchased

Pay only for materials or equipment received

In application, materials or equipment over-shipped shall be segregated to a

quarantine storage area. A material receipt should not be written until a decision
has been made to return or retain. If the latter, a purchase order/change order is
required.

The Warehousing group shall prepare a report immediately on determination of

overages and shortages. A copy of the material over and short report shall be
forwarded to the procurement department without delay and shall request action
required by Procurement. Procurement shall contact the vendor and advise

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material control as to the disposition or overages or the action being taken to

rectify shortages.

Distribution of the over and short report shall be:

Original – Over and Short File

Copy - P.O. File
Copy – Procurement
Copy – Project Control

Contacting the seller/vendor and/or carrier about shortages is the responsibility of

the Procurement department.

Reordering the shortages (if required) is the responsibility of the Procurement

department.

A material over/short report log shall be kept listing the report number and the
status.

This log will serve as the basis for expediting the procurement department for a
resolution

This log will be distributed to Procurement “on a weekly basis” showing what items
still require action.

Damage Report

A damage report is prepared by Materials Control when materials or equipment

received are damaged. Such item(s) shall be segregated and quarantined until
disposition has been determined.

All damage reports shall be signed by a representative of the QA/QC Manager:

Basic information will be filled out by the receiving controller.

Warehouse Officer shall then contact the QA representative who will fill out the
damage report in detail per his inspection and attach any data, reports and
pertinent evidence deemed required to support the claim.

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Each damage report will advise required corrective action by the Site Engineer.

Settlement of all carrier damage claims is the responsibility of the Logistics Officer.
The Material Manager shall transmit copies of all carrier damage reports (including
concealed damage), along with photographs, if any, inspection reports and any
other reports or pertinent information/instructions to the Logistics Officer for
processing of insurance claims and/or back-charges to carriers.

If the carrier wishes to inspect the damage after approval by the Logistics Officer,
the warehouse shall accommodate them and as a courtesy, be provided with a
copy of the damage report with all supporting evidence.

Distribution of the Damage Report shall be:

Original – Damage File

Copy – P.O. File
Copy – Logistics Officer
Copy – Procurement Officer
Copy – Project Controls
Copy – QA/QC Manager

If the representative of the QA/QC Manager deems jobsite repair costs will exceed
minimum amounts a back-charge work order (BWO) will be initiated by the QA/QC
department. It will advise required repairs, replacement of material, estimated
cost, etc. This BWO number will be identified on the transit damage report and all
repair costs will be accumulated for an eventual back-charge, or insurance claim.

The formal MRR for the material received shall have a note against the item(s)
damaged:

Always reference the damage report by number on the MRR

The damaged material is not to be listed as “in stock” until a revision to the MRR is
issued after repair or replacement.

When only part of the material received is damaged, the acceptable material is put
in stock and only the damaged quantity placed in quarantine.

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All material returned after jobsite repair must be re-inspected by a QA/QC

representative and accepted, before a “clean” MRR revision can be issued.

A damage log shall be kept listing the damage report number and resolution. This
log will be distributed, as needed to project and operation management. This log
shall be used to expedite the procurement department for a resolution to the
problem.

Material Exception Report (MER)

A material exception report is prepared by the materials control group when

materials or equipment received are not in accordance with the purchase order or
applicable specification.

A representative of the QA/QC Manager shall be informed to inspect the material:

This representative has the responsibility of deciding if the material is satisfactory

or not for the purpose intended.

In all cases, this representative shall sign the material exception report stating
acceptance or rejection of material.

The representative shall initiate issue of an NCR (non-conformance report)

AS-QM-PR-NCR-001.

If acceptable, an MRR is written receiving the material with a copy of the signed
off material exception report attached.

If unacceptable, the material exception report is issued by the warehousing group

after receiving the reports signed and stating unacceptable for intended use.
Materials or equipment in question shall be segregated and quarantined within the
reject area.

The warehousing group shall formally transmit a copy of the material exception
report along with photographs, acknowledgements and other supporting evidence
to the procurement department.

Distribution of the material exception report shall be:

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Original – Material Exception File

Copy – P.O. File
Copy – QA/QC Manager
Copy – Procurement
Copy – Project Controls

The Procurement department is responsible to ensure that all materials are

delivered to site and close-out of MER reports when material is not received at
site. The Procurement department is responsible for an acceptable resolution of
the problem by either repair or replacement of the material.

A material exception log shall be maintained listing the report number and the
resolution. This log shall be distributed, as required, to construction and operations
management and Procurement Officer showing what items still require action.

After the material exception problem has been settled, a material receiving report
is written for the acceptable material.

4.6 Attachments

Material Over and Short Report

Material Over and Short Report Log
Material Transit Damage Report
Material Transit Damage Report Log
Material Exception Report
Material Exception Report Log

MATERIAL STORAGE STANDARDS, MAINTENANCE AND PRESERVATION

Policy

Warehouse material shall be stored in a manner suitable to provide protection

from theft, damage and/or deterioration per specifications, procedures and/or
vendor requirements.

Purpose

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To provide storage requirement as per relative industry standards used in the

warehousing operations.

To establish classifications of material and equipment with similar protection

requirements.

To provide storage requirements per special vendor requirements.

Affects

Engineering Group

To monitor materials while in storage.

QA/QC Department

Advise on special storage procedures including any special vendor requirements

To monitor materials in storage.

Responsibilities

Materials Manager

The Materials Manager shall be responsible for specific material protection and
storage requirements applicable to the jobsite. These requirements shall be
based on published industry standards and determined in consultation with
responsible engineering staff or statutory bodies. These shall include any special
vendor and/or specification requirements. Failure to comply with vendor
storage/maintenance requirements may jeopardize vendor extended warranties.

QA/QC Manager

The QA/QC Manager shall approve recommended protection and storage

requirements and authorize any deviation from specific handling or storage
instructions provided by material manufacturers or vendors. Approval must be
obtained from the QA/QC Manager for items storage if vendor/manufacturer
position differs.

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Implementation

The American National Standards Institute material protection and storage

requirements shall be the basis for conducting warehousing methods.

Full consideration shall be given to jobsite weather conditions with specific

attention to the monsoon season.

Material protection and storage requirements shall be transmitted to

subcontractors with direction that they be applied to all material for the duration of
construction.

Periodically, a review of how material is being stored shall be conducted by a

representative of the QA/QC Manager and any requirements he deems necessary
shall be provided.

Construction quality assurance procedure shall be implemented.

The storage and handling of instruments shall be carried out as in Attachment.

Attachments

Material Protection Requirements

Material Storage Requirements
Storing and Handling of Instruments

WAREHOUSING SAFETY

Policy

A safety program is required for warehousing operations that provide, as priority, a healthy
and safe working environment for warehousing personnel and conforms to the overall safety
program.

Because of the high probability of fire and accident in a warehouse, a detailed program for
safety and training is required.

6.2 Purpose

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To provide guidelines and establish accountability for ensuring safe and healthy
working areas and methods, and security for material control records.

Affects

Safety Department

Advise, checking that standards are adhered to.

QA/QC Department

Advise, as required.

Responsibilities

Materials Manager

The Materials Manager has direct responsibility to ensure that an effective safety
program is in effect in the warehouse.

HSES Manager

The HSES Manager has overall responsibility for safety regulations and assuring
they are used and enforced.

Constraints

Not applicable.

Implementation

It is the Material Manager’s duty to make changes, additions and revisions to the warehouse
safety guidelines.

All personnel in the warehouse shall be given a copy of the warehouse safety guidelines.

The HSES Manager shall establish more specific safe practices required.

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All company safety procedures must be implemented.

Risk of fire is great at the warehouse vis-à-vis packing materials, chemicals, etc.

The use of fire and safety equipment by warehouse staff is important to the
general safety program.

The warehouse safety guidelines and project safety procedures shall be used as a basis to
formulate safety training and awareness.

Safety training and awareness shall be conducted regularly.

Warehouse Safety Guidelines

General

The Materials Manager shall establish a safety program for warehouse operations
in accordance with the requirements of this procedure, which shall be in
compliance with the safety procedures established in the KGG yard or any jobsite.

The main characteristics of a good safety program are proper work assignments,
good housekeeping, use of proper protective devices, safe practices, the
correction of unsafe conditions and effective communications.

Work Assignments

Warehouse Management's attitude is all-important in an effective safety program.

The proper attitude and concern are most important at the point at which work
assignments are given. The warehouse representative must know how to assign
work so as to have the greatest possible assurance that it will be carried out
safely. The following types of safety thinking and safety instructions shall be
considered in making work assignments.

A) Job Appraisal

Before a job is assigned, the warehouse representative shall appraise the safety factors.
How many and what kinds of personnel are needed? Do they know the applicable safe
practices? What equipment should be used? Which safe practices apply? Are the personnel
trained in the safe use of the equipment?

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B) Selection of Personnel

The Warehouse representative shall exercise good judgment in assigning work to make
certain that it is within the capabilities of the personnel. At least one person in each crew
should be qualified and experienced in the particular work.

C) Instructions

The Warehouse representative shall first decide what he wants done and
how he wants it done, and then clearly convey this to those receiving the
assignment. If equipment is to be used, it should be in a safe operating
condition and the operators must know how to use it safely. If protective
gear is necessary, each employee must have it, know its purpose, and use
it.

D) Reporting

A basic rule of safety is that any accident must be immediately reported to the Material
Manager. The Material Manager shall direct all injuries to the company first aid station no
matter how trivial and take corrective action to prevent a recurrence of the accident. In case
of serious accidents, the Company Construction and Operations Procedure shall be followed
for obtaining professional care. The first aid station will maintain the required records.

Housekeeping

Clean, orderly, and properly laid out warehouse and storage areas are essential to
the person's health and safety. The warehouse superintendent is responsible for
maintaining these conditions.

This is known as "good housekeeping". The Materials Manager shall establish

high standards of housekeeping and enforce them.

i) Proper Layout

The warehouse and storage areas shall be laid out for safe and efficient handling and storage
of materials. Specific areas shall be designated for receiving, shipping, storage and other
warehousing functions. Straight lines, providing maximum clear vision, shall be used
throughout the layout plan.

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ii) Orderly Storage

Materials shall be stored according to safe and efficient standards. Storage shall be neat,
tight and squared off. Aisles and working areas shall be kept free of storage materials.
Leaning storage shall be corrected immediately. Tools shall have a fixed safe storage place,
and should be promptly returned after use.

iii) Cleanliness

Maintaining cleanliness is a continuous program throughout warehousing. Warehouse

management must lead this program by establishing the standards of cleanliness and
enforcing them.

iv) Waste Disposal

The warehouse shall have a sufficient number of refuse containers located at strategic places
to provide for systematic waste containment, removal and disposal. Scrap packaging, wire
straps, etc., which are common to most warehousing, shall be immediately put into the
approved containers by the person first encountering them.

vi) Segregated Damage

Materials that are received in damaged condition and those damaged in the process of
handling shall be segregated from the usable inventories. Damaged materials are
characteristically more hazardous than usable materials. For this reason, they shall be
handled with special care and stored in an area away from the regular storage.

vii) Adequate Lighting

The type and amount of lighting will depend on the nature of the
warehousing. Adequate lighting is essential to safe warehouse operation.

viii) Sign Identification

Posts and other obstructions in areas that are frequently traveled should be striped with
diagonal lines. Access to electric panels, fire extinguishers and other such important areas
should be designated with proper markings and signs.

6.7.4 Warnings and Protective Devices

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The only practical approach to an effective safety program is to have effective

means of avoiding accidents and injuries. There are many devices for doing this:
some of the most common ones are listed below.

i) Handrail Guards

Sturdy protective rails shall be maintained along walkways where the

walking surface is elevated and where protection is required from
hazardous equipment near the walk.

ii) Equipment Guards

Protective guards shall be maintained on the parts of moving equipment that are inherently
hazardous.

iii) Protective Clothing

Much can be done to prevent accidents and injuries, i.e., proper use of protective clothing.
The use of gloves, hard hats and safety glasses shall be established as standard practice.

iv) Warning Signs and Color Codes

Signs used as a means of bringing attention to hazardous situations are

effective in preventing accidents.

The following color codes are generally accepted for warehouse operations:

* Yellow : This is the most common color for designating "Caution". It

should be used in areas where stumbling and tripping are
particularly hazardous. Solid yellow lines or yellow diagonal
lines used interchangeably with black should be used as an
alternative to attract the most attention. Areas where this type
of color marking should be used should be used are listed
below:

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 Caution Signs
 Hand and Guardrails
 Hooks and Blocks on Hoists
 Material Handling Equipment such as Lift Trucks,
Tractors, Conveyors and Carts
 Aisle Lines and Striping
 Edge of Docks
 Corner Board Marking for Storage Stacks
 Pillars, Posts and Columns near highly traveled areas

* Red : This is the most common color for designating "Danger". It

should be used selectively to bring attention to things that are
considered very hazardous. Red should be used for:

 Danger Signs
 Fire Equipment and its location
 Containers for flammable liquids (contents must be
indicated)
 Lights used to bring attention to open pits, barricades and
temporary obstructions
 Stop buttons on equipment

* Green : This is the basic color for denoting "Safety". It is commonly used
with white to form a stronger contrast than either color will
give used alone. A green cross on a white background is a
specific marking to designate first aid. Green or green and
white should be used for:

 Safety Signs
 Safety Equipment other than Fire Equipment, which is
Red
 Start buttons on equipment

*Black/White: These colors are used for designated housekeeping and

traffic markings. Solid black, solid white, or combinations
forming diagonal stripes should be used for:

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 Housekeeping Signs
 Directions Sign
 Dead Ends of Aisles or Passageways
 Debris Containers

Standard Safe Practices

Warehouse Management shall establish standard safe practices for all routine
handling and storing functions pertinent to the operation. Safety consciousness in
employees is important for the safe operation of a warehouse, but this is not
enough.

In addition to the specific project construction safety regulations, the following are
a series of standard safe practices that cover some of the main functions of
warehousing. These must, of necessity, be general in nature. The project safety
supervisor shall establish further specific safe practices that are necessary.

Lift Truck Operation, Safe Practices Purpose

To provide standard instructions for safe operation of warehouse lift trucks:

I. A scheduled preventative maintenance program shall be followed to keep

lift trucks in safe operating condition.

ii. Only qualified mechanics shall perform maintenance, inspections and make
repairs. Records must be kept of inspections and repairs.

iii. Regular maintenance checks shall include, but not be limited to the
following:

 Brakes
 Steering and control mechanisms
 Horns and other warning devices
 Lights
 Stressed parts of lift and truck mechanisms
 Hydraulic systems

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 Governors and overload devices

 Engines, motors and batteries
 Electrical conductors, connections and switches
 Safety guards and devices

iv. Lift truck operators shall keep lift trucks clean.

v. Only authorized persons shall drive lift trucks. All operators must be trained
in safe operations.

vi. Drivers shall operate at safe speeds and keep safe distances from other
vehicles.

vii. Horseplay shall not be permitted.

viii. Loads shall be picked up and placed down squarely without quick jerky
starts and stops.

ix. At start of shifts, drivers shall check horn, water, brakes, steering and
battery power of fuel and oil.

x. Drivers shall slow down at cross aisles.

xi. Engines shall be turned off during re-fueling.

xii. Fuel and oil spillage shall be immediately washed away or absorbed by
compounds approved for this purpose.

xiii. No one shall walk under elevated loads.

xiv. Rail tracks shall be crossed diagonally.

xv. Lift trucks shall be driven upgrade with load first, downgrade with load last.

xvi. Drivers shall not put arms, legs or head outside the perimeter of the lift truck
while moving.

xvii. Lift truck wheels shall be securely blocked when unit is left on an incline.

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xviii. Drivers shall carry loads as low as possible, consistent with safe operations.

xix. Drivers shall move empty lift trucks with forks in lowered positions.

xx. Forks shall be in a fully lowered position when lift truck is parked.

xxi. Only loads that are secure and within the capacity of the vehicle shall be
moved.

xxii. Drivers shall give right-of-way to pedestrians at all times.

xxiii. Drivers shall move over buckboards cautiously and only when boards have
been secured.

xxiv. Wheels of highway trucks or trailers shall be secured with proper choking
before lift truck enters.

xxv. A lift truck shall not be used as elevator for personnel except with an
approved safe platform with handrails to protect raised person from falling
and when such a platform has been approved by the appropriate
government body.

xxvi. The lift trucks shall be equipped with fire extinguishers and drivers shall be
trained to use them.

Hand Truck Operation, Safe Practices Purpose

To provide standard instructions for safe operation of two and four-wheeled hand
trucks.

i. Operators shall keep trucks clean, oiled and in safe operating condition,
reporting any malfunction to their supervisors for corrective action.

ii. Operators shall load heaviest objects at the bottom to keep center of
gravity as low as possible.

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iii. Loads shall be securely stacked to prevent objects from slipping or falling
off.

iv. Trucks shall bear loads with operators providing power and guidance.

v. If a load is such that it obstructs operator's vision, a second man shall

guide the other end of the load.

vi. With two wheel trucks, operators shall keep truck ahead when moving
down an incline, behind when moving up an incline and shall not walk
backwards.

vii. With four-wheel trucks, operators shall push load. If trucks are equipped
with handle and fifth wheel, they should be pulled for the most effective
steering.

VIII Two wheel trucks shall be stored on the chisel.

Manual Lifting and Carrying, Safe Practices Purpose

To provide standard instructions for safe manual lifting and carrying of materials.

General

Manual lifting and carrying are common functions of warehouse operations.

Improperly done, these actions can cause severe muscle strains or other injury.
Every person engaged in warehouse work shall be trained in the safe practices of
lifting and carrying materials.

i Object shall be first evaluated to see if it can be safely lifted or carried

before attempting to move it manually.

ii Another person shall help, or a mechanical lifting device shall be employed

if object is of excessive weight or bulk, or is an odd shape.

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iii Object shall be inspected for nails, slivers, rough edges and slippery
surfaces, which shall be eliminated before lifting object.

iv The following rules for manual lifting shall be as follows:

a) Have secure footing and balance.

b) Squat down close to the load.
c) Get a firm grip on load.
d) Keep back straight so that strain of lifting is taken by thighs and
shoulders, not by the back.
e) Lift with smooth, even motion by straightening legs and swinging into
vertical position.
f) Turn whole body including feet to change direction. Do not twist body.
g) Keep load close to body to avoid unbalanced position.
h) When two people are used to carry a load, it shall be carried at same
level, with one person calling signals for even lifting and carrying.

6.7.9 Carrier Loading and Unloading, Safe Practices

Purpose

To provide standard instruction for safe loading and unloading of trucks.

i Loading docks, inside of car or truck and adjacent working areas shall be
well lighted.

ii Carrier doors shall first be opened slightly to inspect for objects that may
fall out.

iii Contents of carrier shall be checked for insecure load conditions before
starting unloading operations.

iv Shoring and bracing shall be removed and floors and sides cleared of nails
and other protruding objects.

v Lumber and other debris removed from carrier shall be immediately put in
designated containers.

6.7.10 Use of Skids and Pallets, Safe Practices

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i Skids and pallets shall be of sturdy construction and shall be maintained in

good repair.

ii Broken and weakened skids and pallets shall be immediately taken from
use.

iii Empty skids and pallets shall be stored on flat side in neat stable stacks.

iv Skids and pallets shall be standard in design, size, grade and construction.

v Loading of skids and pallets shall be uniform, with the same stacking
pattern used for all of the same product. Alternating tier patterns shall be
used for cartoned products to attain locking effect.

vi Stacking, height of pallet loads, one pallet on another shall be limited to the
height at which the next pallet loaded has a reasonable chance of topping.

6.7.11 Use of Tools, Standard Practices

Purpose

To provide standard instructions for safe use and storage of tools.

i Only authorized persons shall use tools.

ii Only proper tool for job shall be used.

iii Tools, rope and similar equipment shall be inspected before use and all
defective items shall be reported to the supervisor.

iv Only tools in good condition shall be used.

v Only authorized persons shall repair tools.

vi Power tools shall be repaired by qualified mechanic or electrician.

vii Moving parts and points of contact of all tools shall be protective shielded
as far as is practical.

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viii Electrical power tools are not to be used without earth leakage circuit
breaker protection.

ix Warehouse tools that are not in use shall be stored in designated area with
a specific place for each tool.

6.7.12 Use of Ladders, Standard Practice

Purpose

To provide standard instructions for safe use of warehouse ladders.

i Platform ladders used to pick or stock shelves shall have safety handrails
on sides of steps and around front and sides of top platform.

ii Loads are to be hoisted or lowered to and from elevated levels by handling

not carried on ladders.

iii Ladder shall be set on solid foundation. It shall be lashed at top with rope
or its equivalent unless a person is designated to hold the ladder.

iv If ladder must be used in front of doorway, the door shall be locked from
ladder side or a second person shall be used to guard ladder security.

v Person using ladder shall face steps when climbing up and down.

vi Extended reaches shall not be made from ladder. Persons shall climb
down and move ladder close to object to avoid reaching from ladder.

vii Stepladder shall be fully opened and brace secured before use, and
personnel shall not use the top of the ladder as a work platform.

viii Defective parts of ladder shall be reported immediately to supervisor for

corrective action.

6.7.13 Special Safety Requirements

The Project Safety Procedure will outline the requirements for the following:

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a) Use of safety posters

b) Safety communications
c) Safety inspection reports
d) Injury reports
e) Fire prevention and protection

MATERIAL ISSUE DOCUMENTATION

Policy

Issuance of material to subcontractors shall be fully and accurately documented

and shall be in accordance with Engineering Material Take-offs (MTO's).

Purpose

To establish the means for initiating and recording the transfers of material from
warehouse inventory to subcontractors.

Affects

Subcontractor

Documentation required.

Construction Manager

Information and historical data as to what material the subcontractor has received.

Responsibilities

Materials Manager

The Materials Manager is responsible for establishing material issuance

procedures and assuring accurate documentation.

Warehouse Supervisor

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Warehouse Supervisor checks for accuracy, verifies approval and executes issue
documents.

7.5 Implementation

The material control system engineer shall ensure all available Engineering MTO's
are pre-loaded into the warehouse inventory system in hard copy and
electronically if possible for cross checking of actual requirements versus material
requisitions.

Any quantity of material requisitioned by the subcontractor in excess of the designated MTO
quantity must be indicated on the material requisition substantiated by a type of formal
documentation.

The Materials Manager or his designated representative will determine if requested excess
material is within the pre-determined allowance and will not require re-purchasing. Maintenance
of available spare material inventory will differ by individual systems to meet each requirement.
Example –revised drawings.

The Materials Manager will designate large and/or bulk commodities to be offloaded and
formally accepted by the subcontractor upon arrival. The formal acceptance is in lieu of the
standard requisitioning procedure.

Subcontractors may initiate inquiries for availability and issuance of material by preparation of a
material requisition and obtaining the planning engineer's signature that the material request is
valid with respect to the agreed subcontract schedule. Material requests shall be submitted not
less than 30 days prior to the proposed collection date.

A separate area shall be reserved for the consolidation, packing and dispatch of material.

The material requisition is checked to ensure that all required information and signatures are
included.

The material requisition is issued to the warehousemen who shall arrange for the material
required to be removed from the nominated storage areas and placed in dispatch consolidation
areas (excluding pipe, equipment and other items not requiring packaging).

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Parts, fittings, valves, etc., shall be crated, palletized or bundled for dispatch and the
packages marked with the material requisition number.

Crated items, equipment, pipe and any other material not requiring to be packaged, shall be
clearly marked with the material requisition number, but left in their storage locations.

The material located, packaged and assigned to a material requisition number shall be
checked by the Warehouse Supervisor.

Actual quantity issued shall be clearly marked and from what location. Where
material is not available or is insufficient to meet requirements, this information
shall be recorded. The warehouseman shall sign and print name on requisition.

The Subcontractor shall sign the warehouse issue ticket when he receives the material.

The name of the person shall be printed and his signature under the printed name.
The date shall be clearly printed below the name.

This copy shall then be retained on warehouse file as a receipt for the material.

Warehousemen are responsible for observing the loading of all subcontractor vehicles for
which material transfers are being made to ensure no damage is incurred during loading of
material.

Under no circumstances shall materials be loaded in excess of the quantity

specified on the warehouse issue.

No material shall leave the warehouse or storage areas without a signed warehouse issue.

7.6 Attachments

Material Requisition

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JOBSITE WAREHOUSING ACCOUNTABILITY

Policy

Active records on warehoused materials shall be maintained for each item until
disposed of through issue for installation, transfer to client, return to vendor or
sale.

Purpose

To provide guidelines for accounting of material from receipt until final disposition.

Responsibilities

Material Manager

The Material Manager is responsible for the conduct of warehousing procedures

and checking records for completion and accuracy.

Implementation

Data from the following documentation shall be maintained by Materials Controls: Material

Receiving Reports
Material Shipping Reports
Over/Short Reports
Damage Reports
Material Exception Reports
Material Requisitions
Material Exports

Areas of the Warehouse shall be set aside for certain purposes:

Quarantine Area - For material waiting for repair, marking or temporarily

held.

Reject Area - For material which shall never be accepted due to

damage,
Non-conformance

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Requisition Area - Preparation of requested materials (subcontractors)

Export Area - For material awaiting export

The quarantine area is a restricted area with no material movement into or out of this area
taking place unless under the direct supervision of the material control systems engineer who
shall ensure all necessary paperwork is in order before movements take place.

The requisition area is for preparation and packaging of subcontractor-requested material.

The reject area is for material waiting to be returned to vendor, this is subject to evaluation
with vendors for cost of re-export. This area shall also be restricted and no movement of
materials in or out of it shall take place unless under the direct supervision of the Material
Control Systems Engineer who shall ensure all necessary paperwork is in order before
movements take place.

The export area is for storage of items awaiting export, for example, items of returnable tools
and equipment off rental, etc. Traffic department shall be notified immediately of items requiring
export, for preparation of the necessary documentation.

When material has been returned to the warehouse, due to completion of a subcontract or
for whatever reason, the material shall be checked to establish exactly what it is and whether it
complies with specifications.

Where the material is identifiable and traceable if required, a material receiving

report shall be raised by the Warehouse and signed by the Materials Manager.

It is then entered into the Inventory.

Once material is received into the warehouse, it shall be shown on the stock records as
being located in the warehouse by type of material.

When material is placed into storage, the location shall be entered into the inventory.

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Any movement of materials internally within the different warehouse areas shall be entered
into the stock records.

Access to storage areas shall be controlled and limited only to Warehouse personnel.

The Materials Manager will establish a periodic physical inventory requirement.

The Materials Manager shall select the items to be inventoried.

After physical inventory is complete, the items on which problems were noted are
to be resolved.

8.5 Attachment

Warehouse Inventory Audit Form

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