INTER PLANT FABRICATION.

KUWAIT---RAK
Situation:
When fabrication of a project has to be divided between plants in Kuwait and Rak
Restriction:
Such interplant fabrication can be done only on a complete phase wise basis. That is a
portion of a phase cannot be fabricated across the other plant.
This is required to keep up the KPI such as production and delivery in erectable
sequence.

Procedure to be followed:
Pmg:
Issue a purchase order to the other plant for the value equal to the actual selling price of
that phase.
Create a sale order to that plant for this value and weight.

Change the original sale order by reducing the equivalent price and weight.

Keep the same project number for both plants; but Kuwait plant will have letters KW
and Rak will have letters RK prior to the number. For example.KW-12345 FOR
Kuwait portion and RK-12345 for the Rak portion.

One Project will be created in the other Plant.

Engineering:
Create LHE uploads by Uploading one LHE for the Rak portion and Uploading
another LHE for Kuwait portion.

Create SmartBOM uploads by Uploading one SmartBOM for the Rak portion and
Uploading another SmartBOM for Kuwait portion.

There will be general note in erection drawings “Customer to follow only the
numericals of Project Number. Letters KW and RK in Project Number only shows the
plant where these parts are manufactured”. Suggest to have this note in all erection
drawings irrespective whether the project is fabricated in one plant or in both the
plants.

Pmg.

Run project MRP and planned order for both the plants. Delivery from project and
PGI to be done as usual. Rak and Kuwait will ship the materials directly to the
customer with shipping documents and invoice in the name of the customer. L/C
negotiation to be done by both the plants for the shipments done by the respective
plants.
A notional shipping document to be prepared showing shipment by other plant to the
originated plant.