PTS Spec

PETRONAS TECHNICAL STANDARDS
MATERIAL MANAGEMENT
MANUAL
MATERIALS APPRAISAL MANUAL
PTS 30.451
1991
PREFACE
PETRONAS Technical Standards (PTS) publications reflect the views, at the time of publication,
of PETRONAS OPUs/Divisions.
They are based on the experience acquired during the involvement with the design, construction,
operation and maintenance of processing units and facilities. Where appropriate they are based
on, or reference is made to, national and international standards and codes of practice.
The objective is to set the recommended standard for good technical practice to be applied by
PETRONAS' OPUs in oil and gas production facilities, refineries, gas processing plants, chemical
plants, marketing facilities or any other such facility, and thereby to achieve maximum technical
and economic benefit from standardisation.
The information set forth in these publications is provided to users for their consideration and
decision to implement. This is of particular importance where PTS may not cover every
requirement or diversity of condition at each locality. The system of PTS is expected to be
sufficiently flexible to allow individual operating units to adapt the information set forth in PTS to
their own environment and requirements.
When Contractors or Manufacturers/Suppliers use PTS they shall be solely responsible for the
quality of work and the attainment of the required design and engineering standards. In
particular, for those requirements not specifically covered, the Principal will expect them to follow
those design and engineering practices which will achieve the same level of integrity as reflected
in the PTS. If in doubt, the Contractor or Manufacturer/Supplier shall, without detracting from his
own responsibility, consult the Principal or its technical advisor.
The right to use PTS rests with three categories of users :
1)
2)
3)
PETRONAS and its affiliates.

Other parties who are authorised to use PTS subject to appropriate contractual
arrangements.
Contractors/subcontractors and Manufacturers/Suppliers under a contract with
users referred to under 1) and 2) which requires that tenders for projects,
materials supplied or - generally - work performed on behalf of the said users
comply with the relevant standards.
Subject to any particular terms and conditions as may be set forth in specific agreements with
users, PETRONAS disclaims any liability of whatsoever nature for any damage (including injury
or death) suffered by any company or person whomsoever as a result of or in connection with the
use, application or implementation of any PTS, combination of PTS or any part thereof. The
benefit of this disclaimer shall inure in all respects to PETRONAS and/or any company affiliated
to PETRONAS that may issue PTS or require the use of PTS.
Without prejudice to any specific terms in respect of confidentiality under relevant contractual
arrangements, PTS shall not, without the prior written consent of PETRONAS, be disclosed by
users to any company or person whomsoever and the PTS shall be used exclusively for the
purpose they have been provided to the user. They shall be returned after use, including any
copies which shall only be made by users with the express prior written consent of PETRONAS.
The copyright of PTS vests in PETRONAS. Users shall arrange for PTS to be held in safe
custody and PETRONAS may at any time require information satisfactory to PETRONAS in order
to ascertain how users implement this requirement.
TABLE OF CONTENTS
1.0
INTRODUCTION
1.1
SCOPE OF MANUAL
1.2
OBJECTIVE OF QUESTIONNAIRE
1.3
STRUCTURE OF QUESTIONNAIRE
1.4
CONDUCTING THE INTERVIEWS
1.5
REPORTING
2.0
MATERIALS APPRAISAL
2.1
PURPOSE
2.2
OBJECTIVE
2.3
INTERNAL AUDIT
2.4
APPRAISAL TEAM
2.5
FACILITIES
3.0
OUTLINE OF THE APPRAISAL
3.1
PRE-VISIT PREPARATION
3.2
DISCUSSION WITH SENIOR OPU MANAGEMENT
3.3
ORGANIZATING AND STAFFING
3.4
MANAGEMENT CONTROLS
3.5
INVENTORY MANAGEMENT
3.6
PROCUREMENT
3.7
ADMINISTRATION
3.8
OPERATIONS
3.9
OTHER
3.10
CLOSE-OUT/REPORTING
4.0
APPRAISAL PREPARATION
4.1
BASIC INFORMATION COLLECTION
4.2
INFORMING EMPLOYEES
5.0
ORGANISATION AND STAFFING
5.1
GENERAL
5.2
STRUCTURE
5.3
RESPONSIBILITIES
5.4
MANAGEMENT CONTROLS AND YARDSTICKS
5.5
MANNING LEVELS
5.6
STAFF EXPERIENCE
5.7
TRAINING
5.8
SAFETY
6.0
INVENTORY MANAGEMENT
6.1
GENERAL
6.2
STRUCTURE
6.3
STANDARDISATION AND CODING
6.4
INVENTORY CONTROL
6.5
SURPLUS AND SALVAGE
7.0
PROCUREMENT
7.1
GENERAL
7.2
STRUCTURE
7.3
PROCUREMENT COORDINATION
7.4
PROJECT PROCUREMENT
7.5
PURCHASING
7.6
AGREEMENTS
7.7
CONTROLS
8.0
ADMINISTRATION
8.1
GENERAL
8.2
STRUCTURE
8.3
STOCK RECORDS AND ACCOUNTS
8.4
STOCK CHECKING
8.5
DATA PROCESSING SYSTEM
8.6
METHODS AND PROCEDURES
9.0
MATERIALS OPERATIONS
9.1
GENERAL
9.2
STRUCTURE
9.3
RECEIVING AND DESPATCH
9.4
WAREHOUSES
9.5
YARDS
9.6
SPECIAL STORAGE
9.7
MOVABLES
9.8
MATERIALS HANDLING
9.9
SALVAGE AND SCRAP
9.10
WASTE DISPOSAL
10.0
TRANSPORT
10.1
GENERAL
10.2
STRUCTURE
10.3
LAND TRANSPORT
10.4
WATER TRANSPORT
10.5
AIR TRANSPORT
11.0
INTERFACE WITH USERS DEPARTMENTS
11.1
PERSONNEL
11.2
FINANCE
11.3
ENGINEERING
11.4
PROJECTS
11.5
MAINTENANCE
11.6
PETROLEUM ENGINEERING
11.7
DRILLING
11.8
OPERATIONS
11.9
SAFETY AND ENVIRONMENT
1.0. INTRODUCTION
1.1 SCOPE OF MANUAL
The Materials Appraisal Manual provides the general information and describes ESU led Materials
Appraisals of PETRONAS operating Units materials activities. The primary intention is to make clear
the scope of work and responsibilities for preparation, execution and follow-up of an ESU led
appraisal, for the information of management and participants. The questionnaire is primarily intended
as an aide memoir for the appraisal team members.
1.2 OBJECTIVE OF QUESTIONNAIRE
The objective of the Materials Appraisal Questionnaire is to provide a basis for the execution of the
described Materials Appraisals of PETRONAS OPUs materials activities. It aims to ensure that
appraisals are conducted effectively and in a structured manner.
Users of this Manual are reminded that, though the intention is to embrace every eventuality, existing
and potential, no publication of this type can be complete. It should be edited and amended to suit the
type and size of the OPU and to ensure coverage of any special subjects raised by the OPU.
1.3 STRUCTURE OF QUESTIONNAIRE
The questionnaire does not only cover the basic materials activities such as
Inventory Management
Procurement
Coding and standardisation
Administration
Operations
but also covers the interfaces with related activities, organisation, staffing and training matters.
The questionnaire is divided into various chapters and has been construed in such a way that
individual chapters can be allocated to specific team members.
It is useful to spend sufficient time in editing the questionnaire before starting the interviews. The
team leader will need to endorse any such amendments.
1.4 CONDUCTING THE INTERVIEWS
A top-down approach of the interviews has the risk of getting a distorted picture, i.e. information may
be obtained on how things should run, rather than how it is happening in actual practice. It is
therefore recommended to conduct the interviews from the bottom up and check findings on the
higher levels.
A primary general question is how and where the Materials service could be improved (rather than
asking for complaints). The key element is to define how both parties (Materials and Users) can
contribute to improving the business.
Make the interviewed party do the talking and steer where necessary. Summarise the key points after
each interview and ask whether points have been missed.
Ideally, the interviews are held in the direct working environment of the individuals, so that physical
examples are at hand. In certain instances though, it may be required to divert to a quiet interview
room. The important thing is to keep the interviewer at ease and in an atmosphere of mutual trust in
order to ensure a reliable flow of information.
Duration of interviews should generally be kept to approximately one hour. Interviews combined with
visits to e.g. yards or workshops can take longer. The programme should allow for sufficient time in
between the scheduled interviews to allow for small overruns and for writing of initial findings for the
draft report. The programme should also have room for follow-up visits when required.
Interviews with senior staff in Materials and other departments are often of mutual interest to more
members of the appraisal team. When tailoring the questionnaire, it should also be decided which
sessions will be carried out jointly.
1.5 REPORTING
1.5.1
General
The report should present the findings and recommendations of the Materials Appraisal carried
out on request of OPU in MONTH YEAR of the materials activities of OPU. The Appraisal, being
led by ESU as a specific service including staff from ESU and OPUs.
The team carried out an Appraisal to determine whether a sound basis is in place for contributing
to the OPUs objectives and profitability, by reviewing the quality, effectiveness and efficiency of
the way in which the OPUs materials activities are performed.
The questions raised by the appraisal team were discussed with OPU Materials staff and Users
Departments staff during a X day visit of OPUs Operations.
Preliminary findings and conclusions were discussed with OPU specialist staff, to agree on
factual findings and the feasibility of recommendations.
The summary of the findings and recommendations were presented to OPU management on
DATE.
Sensitive issues should always first be checked on sufficient high level, before going into print.
It will save time to have the section "Back ground" written by a competent staff of the Materials
and Services department.
The information in this section could be :
-
Company structure
main activities/locations
Size of operations (production, rig count, refinery throughput, etc.)
Scope and size of Materials and Services department (incl. staff, stock, procurement figures)
Present and future activities (incl. trends, major projects).
Each chapter (5 to 10) starts with a section "General", followed by a section on "Structure". it is
the intention to have the objective, policies and related aspects covered under "General". The
section on "Structure" includes questions on how these are implemented, i.e. how is the
department/section operating.
In many cases it will be useful send a draft copy of the report to the OPU for comments (but main
findings and action points should already have been agreed). A date for return with comments
should be agreed to avoid delays in issuing the final report. The report is normally issued by ESU
under covering letter. Distribution of the report in the OPU is left to the discretion of the OPU
senior management, to which extent sufficient copies will be made available.
1.5.2
Overall Rating
Each appraisal report will typically contain a large number of detailed findings or apparent
shortcomings each of which can individually be explained or even justified. In some cases the
shortcomings may result from a structural problem rather than individual aberrations so that there
is a need for an OVERALL RATING to indicate the quality of the performance of the materials
activities, as either
Satisfactory
Unsatisfactory
according to the definitions :
1.5.3
SATISFACTORY -
Although some weaknesses were identified which require timely

corrective actions, such weaknesses, either individually or taken in
aggregate, do not significantly impair the quality of the OPUs Materials
activities.
UNSATISFACTORY -
The weaknesses identified individually or in aggregate significantly

impair the quality of the OPUs materials activities to the extent that
prompt corrective measures are necessary to bring performance up to a
satisfactory level.
Main Findings
The main findings not only summarise the major concerns, but also areas that are particularly
well managed or reflect innovative approached. They should include positive comments as well
as those concerns which may require urgent action, a major cost or a change in practices.
1.5.4
Action Items
Action : OPU should appoint a coordinator to progress resolution of the recommended actions
items.
Action : The first progress report should be issued by DATE and thereafter quarterly until all
recommended action items have been closed out.
Actions are recommended to help identify the problem as well as indicate solutions. For brevity,
these are identified in text as 'ACTION' rather than 'Recommended Action' but this should not be
taken to imply that they are mandatory. OPU should explore alternatives to find the optimum
solution for each problem.
If these alternatives differ significantly from the appraisal recommendations, the considerations
underlying OPUs decision should be discussed with ESU.
1.5.5
Interface With User Departments
Where appropriate, a separate chapter should be drafted to cover the interfaces with the user
departments (see chapter 11), however if the relevant findings are adequately covered in the
other chapters and to avoid unnecessary repetition, chapter 11 can be omitted from the report.
1.5.6
Appendices
A) Recommended Action Items

This is added as appendix no. 1. It should preferably be taken literary from the recommendations
in the report and cross-referenced to the relevant sections therein. When drafting the report, this
should therefore be taken into account.
The numbering of the action items is numerical per chapter (not continuous).
The action item list should be suitable as a stand-alone document for follow-up.
B) Organigram
The latest organigram of the Materials and Services Department should be added as appendix 2,
preferably preceded by a page which shows the place of the department in relation to other
departments and to management. Any suggested changes should be shown separately.
C) Visit Programme
It is often useful to include a copy of the visit programme, including details of presentations, site
visits and interviews. Where necessary, a cross reference list with job indicators and job titles
should be added.
D) Core Statement
Also to be added is a copy of the agreed departmental core or business statement.
E) Other Appendices
Any useful appendices supporting the report can be used, such as situation sketches, sample
forms or other brief illustrative documents.
It is normally not required to include the hard copies of the full slide presentations) of the
appraisal team.
2.0 MATERIALS APPRAISAL
2.1 PURPOSE
To appraise the materials activities from a professional viewpoint. The appraisal includes topics like
Materials Management, optimum use of modern tools and techniques, effective use of computer and
coding systems and procedures, controls and identify any potential areas for improvement.
2.2 OBJECTIVE
To determine whether a sound basis is in place for contributing to the OPU's objectives and
profitability of the way in which the OPU's materials activities are performed.
To assess the potential for performance improvement by evaluating whether adequate use is
made off - and attention is paid to - professional human resources, tools systems and
procedures.
2.3 INTERNAL AUDIT
Duplication or overlap with internal audits is to be avoided. The basic objective of an auditor is to
appraise whether the correct business controls are in place and applied, which should lead to an
effective and efficient operation.
This implies that the auditor is not auditing whether activity is performed in a sound and efficient way,
but whether management has sufficient possibilities to control the activities.
In other words, the Materials Appraisals are to be focussed on the business side, and meant to form
an opinion on how efficiently and effectively the materials activities are carried out.
2.4 APPRAISAL TEAM
The appraisal team would consist of 2-3 persons and preferably be composed as follows :
a) Team leader with organisational/staffing/ operational experience to be provided by PETRONAS
b) Staff member from ESU
c) Inventory management specialist with user know-how of computer systems provided by
PETRONAS
The team would be supplemented by an appraisal focal point to be nominated by the OPU
concerned.
In practice, the persons selected for position (a) and (c) should be an executive member of a
PETRONAS OPU nominated by ESU. The team set up will be assisted by focal points established by
respective OPUs concerned. The focal point will also serve as facilitator and should be accessible for
the duration of the appraisal to ensure that timely action can be taken when problems surface. He
must, of course, be sufficiently senior to be able to sort out problems during appraisal.
2.5 FACILITIES
a) Office Accommodation
An office which is large enough to hold all the members of the appraisal team will be required
throughout the duration of the exercise. The office should be equipped with a telephone, conference
table, one lockable filing cabinet or cupboard, flip-chart, and appropriate stationery. A black or whiteboard will also be useful. Team members should be able to have access to the office outside normal
working hours.
b) Secretarial service
Word-processors with operators are required throughout the exercise. Members should have access
to these facilities outside office hours and on week-ends. The operators must also be available at all
times when required. During the last few days of appraisal, it is envisaged that a number of viewgraphs will be required for presentation purposes. The team should be given priority access to
draughtsmen, the drawing office, and other relevant facilities.
c) Accommodation And Transportation
All team members should be put up in the same accommodation. A vehicle should be reserved for
use of team members at all times, even outside of normal working hours.
3.0 OUTLINE OF THE APPRAISAL
3.1 PRE-VISIT PREPARATION
Collect and study all data pertinent to the appraisal of relevant OPU. When possible obtain statistical
data and performance indicators of similar companies.
3.2 DISCUSSION WITH SENIOR OPU MANAGEMENT (incl. User Dept.)
Management and User perception of the role and responsibilities of the Materials Department.
(Strengths and Weaknesses). What are the relevant policies of OPU concerned.
3.3 ORGANIZATING AND STAFFING
Evaluate effectiveness of organization, quality/quantity of staff, workload, career progression and

training programmes.
3.4 MANAGEMENT CONTROLS
Is there a healthy delegation of authorities, information and responsibilities, as well as adequate

information flow? Are controls adequately exercised? What use is made of information provided by
ESU.
3.5 INVENTORY MANAGEMENT
What is the policy and how is it applied? (service level, standardisation, spare parts selection,
surplus/non-moving stock write-off)?
Evaluate stock turnover (non-moving items, insurance spares, contingency items, authorized
reserves). Is MESC used in a professional manner?
Are stockist, call-off agreements used in an optimum way? To what extend do "squirrel? stores exist?
3.6 PROCUREMENT
What is the policy practice in the OPU and is it considered Sound?

Is sufficient commodity know-how available?
What use is made company-wide price agreements?
How many local price agreements are in place?
Are prices for key commodities regularly checked/compared with other OPUs.
Are Purchase Orders handled in an efficient and professional way?
Is full use made of OPU/Group bargaining power?
What Quality Management activities are taking place?
Is the materials function represented in the Tender Board?
3.7 ADMINISTRATION
Is proper use being made of adequate computer systems?

What managerial type data is available?
Are accounts regularly reconciled with Finance?
Method and frequency of stock checking and results obtained? Is document processing up-to-date?
Are written Materials procedures available, up-to-date and in line with Group guide-lines (PMAG)?
Are movable assets properly administered and controlled?
Are claims properly administered and progressed?
3.8 OPERATIONS
Are materials properly stored, handled and transported (efficiency, preservation, safety)?
Are receiving and despatch procedure properly implemented?
Are security arrangements adequate?
Is storage capacity sufficient to cover (future) demands?
Are direct charge and project materials properly managed?
3.9 OTHER
Are possible other tasks/responsibilities of the Materials Function properly managed. (e.g. Transport,
General Service Contracts, office services, lease contracts).
3.10
CLOSE-OUT/REPORTING
Main findings will be presented to Management and Materials Management Steering Committee.
4.0 APPRAISAL PREPARATION
4.1 BASIC INFORMATION COLLECTION
The OPUs coordinator for the appraisal is responsible for ensuring that the following information is
available to the team on the first day of the appraisal.
In some cases an index is required listing the information itself is required from the beginning.
The information listed is the basic minimum. The appraisal can still be carried out with incomplete or
outdated information but this would itself lead to a negative observation.
(a) Company Business Plan
The Company's business plan and/or data book.
(b) Targets and 0bjectives
Company, department and individual targets and objectives that relate to the Materials activities
of the OPU in the widest sense.
(c) Health, Safety and Environmental Policy
The published policy on Health, Safety and Environmental Matters.
(d) Purchasing Policy
The purchasing policy describes how to obtain maximum total value, both in the short and the
long term, for expenditures on materials and equipment.
(e) Stocking Policy
The stocking policy defines what materials are to be stocked, for what purpose, and the required
availability of stocked materials for users.
(f) Standardisation Philosophy
This lays down the philosophy with regard to the standardisation of facilities, equipment and
material.
(g) External Requirements
A list in index form, of the requirements of government, partners, ministry, custom authorities or
other official bodies that affect the materials activities of the Company.
(h) Procedures
A copy of the materials and services procedure manual, including relevant parts of procedures
from other department from other departments or disciplines (e.g. maintenance, project
engineering) affecting the materials activities. If not included in the above mentioned manual the
tender board procedures and a list of financial authorities should be included.
(i) Reports
Report of the latest internal or external audits covering all or part of the materials activities, with
any follow-up or progress reports.
(j) Organisation
A chart showing the organisational relationship of the Materials and Services Department and of
their main customers together with a list of their names.
A list of materials and services staff with age, job groups, formal training courses attended for the
past two years and planned for the next two years.
Details of changes in the organisation which have been accepted, but not yet implemented.
(k) Contracts
A sample of a standard contract, stockist - or supply agreement with details of the terms and
conditions.
A list of current stockist -, price agreements indicating (main) commodity, supplier and yearly
turnover.
(l) Claims
A list of claims or criticism of materials handled during the past 12 months and its current status.
(m) Statistics and Performance Indicators
Statistics and indicators over the past two years, used in the OPU to manage and measure the
efficiency and effectiveness of the materials activities.
(n) Geographical Information
Maps of the area/country is which the operations take place, indicating main fields, facilities,
warehouses, yards, ports, airports, etc.
4.2 INFORMING EMPLOYEES
All those directly involved in the materials activities should be informed before the appraisal starts. All
concerned should be asked to give their full support and co-operation to the appraisal, in particular,
they should be asked to list their current problems in relation to materials in their field of activities for
discussion with the appraisal team.
The duration of the appraisal visit is 3-4 working days. Roughly of the time available is to be
planned for interviews and visits to the stores, yards and possibly other facilities.
In line with the purpose and objectives of the appraisal the emphasis will be on feed-back from the
people who know, from the bottom of the pyramid to those at the top. The programme for the
interviews is to be arranged accordingly.
5.0 ORGANISATION AND STAFFING
5.1 GENERAL
What is (are) prime objective(s) of OPU?
How is OPU organised?
Is there a statement of general business ethics?
Does statement adequately cover department, including an inambigious policy on conflict of

interest?
Is statement incorporated in departmental procedures?
Is there a departmental core statement?
What are the departmental objectives?
Does senior management support the core statement?
Does senior management support the objectives?
How do they give this support?
Are there separate objectives/targets for the sections?
Are the objectives/targets documented?
Are the targets measured?
Is there a departmental commitment (budget and targets) plan?
Is there a periodical follow up?
How often is a departmental meeting held?
Is there a separate safety meeting?
Is there a monthly department report?
Is there a management summary of the monthly report?
Is there a departmental procedure manual?
Is distribution controlled?
Are control sheets available?
When was last update issued?
Is there a simple guide for user departments?
5.2 STRUCTURE
Is there a formal organisation structure published?
Is the reporting relationship hierarchial of functional?
Is information provided by ESU used in Materials Department?
Is this information distributed where needed with guidance to user departments?
Are the services from ESU up the mark?
Is there a need for additional ESU support?
Was there a major re-organisation in the department over the last 4 years?
Were there minor re-organisations in the department over the last three years?
Are there new systems introduced in the department over the last 3 years?
Have the re-organisations lead to a reduction of staff and/or costs.
Has the introduction of new systems lead to a reduction of staff and/or costs.
Have these savings been recorded?

System
Reduction in staff?
Reduction in costs?
Reorganisation =
Reduction in staff?
Reduction in costs?
Is the present organisation of department/section best tailored to fit requirements?
Is corrective action contemplated?
Has corrective action been taken?
Who are major customers?
Where are constraints/weaknesses?
Is there any area with consistent and high overtime?
Is overtime monitored and reported?
Have causes of overtime been investigated?
Have proposals for improvement been made?
What is frequency of Management visits?
Can you split it in discipline?
5.3 RESPONSIBILITIES
What is the responsibility of the department?
What is the responsibility of the sections?
Where and how are responsibilities documented?
Descriptions complete and still valid?
Is authority in line with these tasks?
Are documents to be signed in line with authority?
Where is authority for signatures laid down?
Is staff aware of their own duties and responsibilities?
Is there adequate time available for the individual to carry out the job?
Are responsibilities in line with functions and authorities?
Are responsibilities clear?
Is there a healthy delegation of responsibilities?
Is delegation of authorities formally arranged?
Is there a healthy delegation of information?
Is the information flow bottom/up functional or hierachical?
Is the information flow top/down functional or hierachical?
Are there information filters in the organisation e.g. information not or not completely reaches the
relevant?
5.4 MANAGEMENT CONTROLS AND YARDSTICKS
Is there a OPU plan to ensure regular review of the adequacy of the business controls?
What controls are exercised?
At what level are controls exercised?
When was last external audit?
When was last internal audit?
What are main conclusions and recommendations of these reports?
Have agreed corrective actions been implemented?
Is there a plan of action with time scale for implementation?
Is there a departmental plan for business controls?
What controls are exercised?
Are the controls adequate?
Are the main areas (inventory control, procurement, administration, e.d.p and operations)
covered?
At what level are controls exercised?
Is there a healthy delegation of authorities?
Is the delegation of authorities formally arranged?
Is Materials involved at the right level in the OPU decision-making/communication process?
Does Materials Manager regularly attend contract committee meetings?
Does Materials Manager attend Dept. Head meetings?
Is there a Materials Dept. representative in

o
Project meetings?
Morning meetings (E & P)?
Pipespec meetings?
Major overhaul meetings?
General Maintenance meetings?
General Safety meetings?
Tenderboard?
Are there locally established performance indicators?
Are the centrally developed performance indicators used?
Is there Management awareness of the p.i.'s?
Is there departmental awareness of the p.i.'s?
Is there guidance for evaluation of the p.i.'s?
5.5 MANNING LEVELS
Is there a forecast establishment plan?
Is there a staff development planning?
Is the planning stable?
What is the age distribution of staff?
Is manpower distribution correctly representing workload?
Is workload monitored?
What is turnover in staff?
Is there a high turnover of warehouse personnel?
How does absenteeism compare with other departments?
Is there expatriate staff?
Is there a succession plan?
Is there contracted staff?
What is duration of the contract(s)?
Is there part-time staff?
Is manpower distribution correctly representing workload?
What is jobgroup differentiation?
What is the span of control of department head?
What is the span of control of each section?
How frequently is span of control changed?
Does it correctly represent department/section?
Since when is/are anomaly(s) in existence?
Are there any vacancies?
How long do vacancies remain unfulfilled?
5.6 STAFF EXPERIENCE
Are individual employees competent to do the work allocated to them?
Is there an adequate number of competent employees at each level?
Is there a system of planned job rotation within the department?
Is there a planned interdepartmental job rotation?
Is annual leave programmed and taken?
Is outstanding leave monitored?
Are the abilities of individuals equal to, in excess or below the requirement to exercise their job?
Is there an organisation chart showing responsibilities and reporting relationships?
Is there an appropriate working environment with suitable supporting aids to efficient work?
Are job descriptions available and up to date?
Are the job descriptions covering all functions?
Are the job descriptions reflecting all aspects of the job(s)?
Dates of issues?
Dates of last job evaluation exercise?
Which method is used?
5.7 TRAINING
Where is responsibility for training vested?
Is classroom training available?
Is there a documented system to identify training needs?
Is there a documented departmental training plan?
What subjects are covered in departmental training plan?
When was last formal departmental training?
When was last formal company training?
When was last formal group training?
Are PERMATA training modules used?
Which modules have been used?
Is there enough awareness of the existence of training modules?
Is there access to copies of group training guide?
How many hours are spent on training per individual?
How many hours are spent on training in total?
Is department head giving training in department?
Are section heads giving training in department?
How are people trained to fill a position?
Does on-the-job training apply?
Is there a staff development position?
5.8 SAFETY
Is there a safety policy statement by senior management?
Do managers support the policy through visits an audits?
Is there a safety bulletin board in the department?
Has one person been designated as safety and health control coordinator?
Is there a departmental safety meeting?
Is safety subject of discussion in section head meetings?
Is there a department safety plan?
Is there a periodical follow up?
How frequently does senior management make a safety tour through department?
How often does department head make a safety tour through department?
Are records (checklists) kept on the tours?
What hazardous material is there in stock?
Is hazardous material well controlled?
Number of lost time incidents

this year?
last two years?
Number of reported "near misses?

this year?
last year?
Which percentage of supervisory staff received safety training?
6.0 INVENTORY MANAGEMENT
6.1 GENERAL
What is the OPU policy on stardardisation?
Is there a detailed OPU stocking policy?
Are there guidelines within this policy?
Is there a documented policy for capitalisation of high value insurance items?
Are insurance items clearly defined?
Is there a stocking policy for spare parts?
Is there a stocking policy for general materials?
Is there a policy on a mandatory use of the MESC number when applicable?
Is there a documented OPU policy on surplus?
Is there active Management support to reduce surplus?
Are there guidelines to execute the above policies?
What are the objectives of the section responsible for the inventory management?
6.2 STRUCTURE
Is there an equipment record system?
Is the equipment record system centrally maintained?
Who is responsible for up-keep?
Is "distribution controlled?
Is there a equipment classification?
What is percentage of the total stock value of the total capital replacement value of the OPU?
What is percentage of the total stock value of the spare parts of the capital replacement value of
the equipment?
Are there regular reviews of the range of spare parts?
Are SPIRs being used?
Are staff aware of Spare Parts Advisory Services in ESU?
Are spares written off at the same time of the equipment?
Are spares sold with equipment?
Is there an effective method of implementing policy changes?
Is there an effective method of estimating the effect of policy changes?
Are there stock-out reports? How many?
Are there low-stock reports? How many?
Are there focal points in User Departments for Programme Materials stock control?
How is projected Programme and/or work schedule advised?
Is Programme ordering system meeting the complexity of OPU's operations?
Are there shopping lists in existence and how many?
Is there an effective method of estimating the cost impact of standard changes?
Are there focal points in under department for Project Materials stock control?
Are there shopping lists in existence and how many?
How much is value and percentage of Surplus Construction Materials?
Is Project Materials ordering system meeting complexity of OPU's requirements?
Is there an equipment standardisation committee?
Is there a documented system to regularly review Company Selected Standards?
Is there a standardisation committee?
What is composition/competence of this committee?
Is there a consistent approach regarding the criticality of items stocked?
Is (are) there expressed service level target(s)?
Is there an understanding of the service level concept?
Are users aware that there is a target service level for different categories of items?
6.3 STANDARDISATION AND CODING
How many Standard MESC CD-ROMs are distributed within the OPU?
To which departments?
Are number of revisions received in accordance with sets distributed?
Have latest revisions been incorporated in manuals?
How many Local MESC catalogues are distributed within the OPU?
To which departments?
Are buying descriptions up to date?
Is there a Standardisation action plan?
Is the MESC-Section represented :in the Standardisation committee?

in the Pipespec. committee?
in the ordering notes (clauses) committee?
Is there a periodical review of stock items?
Is there a selection revision programme?
Are there written guidelines for these revisions?
Are the results of selection revisions reported?
Are these reports incorporated in monthly materials report?
Is a Spare Parts computer module being used?
Are SPIRs actively being used?
Are there other forms used to select Spare Parts?
Is Materials Dept. aware of the existence of the MESC training module?
Are user departments aware of the existence of the training module?
What formal training did Standardisers receive?
Did they receive on-the-job training?
6.4 INVENTORY CONTROL
Is there up to date management information to provide them with the costs of maintaining
materials stocks?
Is there a regular consideration for justification for holding stocks?
Does Materials play an active (anticipating and challenging) role in inventory control?
What is the stock turnover and where are the black spots?
Are records up to date?
What is accuracy of the records?
When were OPU standards last reviewed?
What is the mechanism for reviewing standards?
What is the policy on reserve stocks?
Are there authorised reserves?
Are project stocks sensibly integrated with MRO requirements?
Are SPIR or other Spare Parts selection forms actively scrutinised?
Who authorises stock proposals?
Are stock proposals suppressed?
How is decision taken when what and how much to stock?
Are return-vouchers routed through stock-analyst?
What is Service level?
How is stock value determined?
What is stock value in months consumption of :
Total Stock?
Programme Materials?
Cement and Chemicals?
Spare Parts?
General Consumables?
Process Chemicals?
What is stock value of Non Moved items

o
Total Stock?
Programme Materials
Cement and Chemical?
Spare Parts
General Consumables?
Process Chemicals
What is percentage of non-moved items?
How does value and percentage compare to a year ago?
How were reductions achieved:

value/percentage of write-offs?
value/percentage of sales to other OPUs?
value/percentage of sales to 3rd parties?
value/percentage substituting?
What is considered as non-recurring consumption?
Which percentage of your stock items is based on recurring consumption?
Which percentage of your stock items is based on non-recurring consumption?
Is Min./Max. stock + order method used?
Is the K-factor known/updated?
Are the carrying costs of the inventory known?
What value is placed on money tied up in materials stocks?
How is the value of the stock determined?
Are there Materials Dept. controlled Satellite stores in User Departments?
What are main commodities?
What is value of this stock?
Are there "squirrel" stores with Users Department?
Has "the reason why" been investigated?
What is estimated value of these "stocks"
Have "corrective steps" been taken to reduce/eliminate the squirrel stores
How do you assure sufficient current knowledge of your stock analysts?
Did stock analysts receive formal training on:

Inventory techniques?
PMMS System?
Commodities under their responsibilities?
On-the-job?
6.5 SURPLUS AND SALVAGE
Is there a documented OPU policy on Surplus?
Is there a Departmental procedure on Surplus?
Is there a Surplus Coordinator?
Are Surplus lists available?
Is it specified whether it is Dead, Excess and/or material?
Is lay-out clear and concise?
Are the lists actively scrutinised?
Circulated and advertised within OPU?
Circulated to other OPUs?
What is value of Surplus of:

o
Dead Stock?
Excess Stock?
Project Stock?
How is Excess Stock determined?
How is Dead Stock determined?
How is value of Project Stock determined?
Is there Direct Charge Surplus?
When is Surplus written off?
Who initiates write-offs?
What is policy/procedure for write-off and disposal?
Is there a Salvage procedure?
Is accounting procedure included?
Is there a Salvage record?
Is the Salvage listing distributed within Department and Users Departments?
Is there reconditioning of Salvage?
7.0 PROCUREMENT
7.1 GENERAL
What is OPU policy regarding

o
Central Purchase?
Regional Purchase?
Local Purchase?
Direct outside Purchase?
Procurement for Projects?
Where and how documented?
Are the OPU's general terms and conditions of purchase orders regularly reviewed?
Are the OPU safety and environmental policies reflected?
Is there a letter send to suppliers specifying the policy of the OPU on business ethics and gifts?
Is this policy incorporated in the working procedures?
What is OPU policy regarding QA/QC?
Are product quality plans requested at the enquiry stage?
Is the cost of inspection recorded separately from product cost?
7.2 STRUCTURE
Is Purchasing organisation structured to meet OPU Policy?
Are Purchasing methods structured towards efficient handling of different types of order e.g.
Simplified orders, price agreements/offtake orders?
How many buying sections are there?
Is buying done commodity wise?
How many buying groups are there?
Is there a separate project procurement section?
Are buyers moved between various commodities?
Is there preferential treatment for any supply source(s)?
Where is this defined?
How many staff members are, as a rule, present in negotiating agreements and/or contracts?
Are parameters clearly documented and adhered to?
At which level(s) is decision taken how and where to order?
Is there a list of approved suppliers?
Where is responsibility for upkeep?
Is it organised along commodity lines?
Is supplier's performance monitored and recorded?
Is there a documented system for Quality Audits on suppliers?
Is there a reasonable suppliers basis?
Is there an effective filing and retrieval system for the purchasing files?
Is it a central filing system?
Where is responsibility for upkeep?
Are there "personal files"?
Are various stages of a purchase order (including enquiries being monitored and reported?
At what intervals?
Is workload monitored and regularly reported?
Are details analysed for trends?
Do requests for enquiries and orders, clearly describe requirements, including necessary test,
inspection and documentation requirements?
Are requisition fit for purchase?
Is it often necessary to revert back to originators for additional information?
Are such occasions monitored, reported and analysed?
Are spare parts ordered with equipment?
Are there any specific areas of concern?
Are there standard ordering clauses/notes?
Are ordering clauses judged by Legal?
Is there a procedure for the handling of claims?
Are claims dealt with in accordance with the procedures and properly progressed?
Are cashflow calculations made before replacement of capital items?
Is lease being considered?
Did buyers receive formal training/education on:

Commodity(ies) handled?
Negotiation skills?
Contracts?
Quality systems?
Financial decision taking techniques?
Is there a working agreement with another OPU to cater for regional purchasing?
What is basis and method of cost recovery?
Is there a financing and payment procedure?
What is "mark-up"?
Is there a price control mechanism?
How many orders are placed via agreement?
For which commodities is agreement used?
Is agreement working satisfactorily?
7.3 PROCUREMENT COORDINATION
Is full use made of OPU/Group bargaining power?
Is there active participation in aggregating forecasted demands?
Is pricing information exchanged with other OPUs?
Are current Price Agreements exchanged?
Is confidentiality secured?
Is there other active participation in Procurement Coordination process activities?
Which commodities?
Are there tangible benefits and/or "added value obtained?
Are they registered and reported?
7.4 PROJECT PROCUREMENT
Is the department involved in projects from the project definition phase?
Does Materials have permanent/part-time attendance in the project team(s)?
What is the reporting relationship?
Are parties satisfied with this arrangement?
Are the standard duties of the Project Materials Coordinator known and executed?
o
contribution to project spec. and to bid book
(co)-responsible for approved equipment list and for approved vendor list
contribute to planning (processing/delivery/ shipping times)
bid evaluation procurement part
evaluation contractor's procurement set-up
ensure procedures and document flow diagram available
check timely issue/actioning of requisitions
check whether QA/QC requirements included
follow progress and ensure progress reporting
liaise with parties concerned (contractors, shippers, receivers)
Where is the PMC located?
Are his authorities adequate?
Does he receive sufficient support?
Is the SPIR systems introduced during bid-phase?
Who checks spare part selection?
When are spare parts ordered?
What period do they cover (running-in, 1 year, 2 years)
Has warehouse space been allocated for new spares?
Has a policy/procedure been agreed on acceptance of initial spares for the operational phase?
Has a policy/procedure been agreed on surplus re:

o
accounting?
transferring?
write-off?
What is maximum retention period?
Is the department aware of services from ESU for SPIR support?
Are inspection, expediting and shipping coordinated?
Who is responsible for receipt inspection?
Who checks and who files materials certificates?
Who is responsible for handling and storage?
Are safety requirements laid down?
Are there contractual repercussions (by construction contractor) in case of late delivery of free
issue materials?
Is adequate time allowed for slippage in delivery time of notorious suppliers/manufacturers?
Has this been taken up in the construction planning?
7.5 PURCHASING
Is there a legistation by the government to encourage local purchases and/or services?
Is there a Local Purchase Development position in the department?
Is there a Local Purchase procedure?
Is there a good segregation of duties?
Is there periodically a re-allocation of buyers' responsibilities for the various commodity groups
purchased?
Are orders properly priced?
Are there unpriced orders?
What is price control mechanism?
Is there a record of price trends?
What are the major classes of materials purchased locally?
How are these orders handled?
Are the materials obtained locally purchased

o
via local agent back orders?
from stockists?
from manufacturer?
Are receipts routed through the Receiving Section?
How many suppliers are selected for enquiries?
Are price comparisons made?
Is reason for selection of supplier mentioned?
Is there evidence in order files?
What methods are used for direct outside purchases?
Which materials are purchased under this procedure?
Are there Agreements with Purchasing Agents and/or Suppliers?
Are Price Agreements used?
What is total value purchased via Outside Purchases?
How are Shipment, Insurance and Claims been arranged?
Is system of Direct Outside Purchasing working satisfactorily?
7.6 AGREEMENTS
Is there a standard form of contract approved by Finance and/or Legal?
Are exchange fluctuations covered?
Are the company's general terms and conditions of contract regularly reviewed?
Does a standard procedure exist for bidding for contracts?
Are your using Centrally made Price Agreements?
Are your using these agreements for price comparison or for purchasing?
Are there Locally made Price Agreements?
For which commodities are you using the p.a.'s?
How much (value and percentage) is purchased via the p.a.'s?
What is benefit and/or added value by using the Centrally made Price Agreements?
How many items are purchased via Price Agreements?
What is total value of purchases via Price Agreements?
What is duration of Agreements?
Are you using call-off orders?
Is call-off authority also delegated to under departments?
Are there pre-printed "laundry lists" and/or simplified order forms?
How is unauthorised use prevented?
Are you using Supply Agreements for bulk orders?
Is Materials Dept. monitoring all Supply Agreements ensuring that:

o
the service level meets the required standard?
terms and conditions of agreement are complied with?
the price continues to be justified?
quality is maintained?
How is unauthorised use prevented?
Are you using Stockist Agreements?
For which commodities are Stockist Agreements used?
How many items are covered in Stockist Agreements?
What is total value of purchases via Stockist Agreements?
Have commercial bid evaluations been carried out?
Are the comparisons and results laid down?
Can the benefits be specified?
Is Service Level monitored?
What is mechanism to check that prices continued to be justified?
Is quality control secured?
Have economics been evaluated by Materials Dept. in conjunction with local Finance Dept.
Are there other Agreements, such as Supply and Repair and Supply and Service Agreements?
Are they made in consultation with Operations Dept.
Are there adequate controls on the usage of materials?
7.7 CONTROLS
Is there a flowchart for Materials Requisitions etc.?
Is there a control system monitoring the flow?
Are details reported and analysed?
What is processing time of Requisitions?
What is processing time of Direct Charge requests?
What is processing time of Purchase Orders?
What is processing time of Enquiries?
What is processing time of indents?
Are Materials Request document properly Authorised?
Is this being checked and where?
Who is responsible for checking?
Is there a backlog of orders/indents to be placed?
Is this monitored/reported?
Who is responsible for checking?
Is there a backlog of orders/indents to be placed?
Is this monitored/reported?
Is there an OPU Tender procedure?
Is there a Departmental Tender procedure?
Are quotations received in sealed envelopes?
Is there a TenderBox?
Are there telex and/or telefax quotations?
How is security secured?
Is there a Tenderboard?
Which functions re represented?
Is membership rotating?
Is there evidence in the order files why orders are placed?
Is there evidence in the order files why (if) a single source is used?
Is the performance of the suppliers monitored and recorded?
Are the delivery times monitored?
How many deliveries delayed more than 3 weeks?
Which orders are expedited?
Are prices in accordance with market prices?
What is the checking mechanism?
How many orders are placed?
How many rush orders?
How many urgent orders?
How many orders are expedited?
Are the ordering-costs known for:

o
Local orders?
Telephone orders?
What is value purchased per Man?
Is the local contents of all Materials procurement known and reported?
How are these figures obtained?
8.0 ADMINISTRATION
8.1 GENERAL
What is the policy on document retention?
What is the policy on stock checking?
Is there a departmental "clean desk" policy?
Is the procedure of "clean desk" adhered to?
Who is checking?
What are the objectives of the admin. section?
Is there a computerisation plan?
Is the PMAG available?
To whom is the PMAG available?
Is it up-to-date and being utilised?
Is there local legislation or company rule pertaining registration of staff details in a manual or
computerised record?
Are staff aware of these regulations and are they adhered to?
What is the capital budget?
this year?
last year?
next year?
What is the operating budget?
this year?
last year?
next year?
Who is responsible for budget control?
How is budget control carried out?
How much, in percentage, was over/underspending last two years?
Which statistics are reported to Materials Management?
Which statistics and/or reports are distributed to OPU Management and/or Management Users
Departments?
What is reporting interval?
How are they produced?
What is the inflation over the past year and how are statistics affected?
Is adequacy of insurance cover regularly reviewed?
Who is responsible?
8.2 STRUCTURE
Is there a focal point responsible for the distribution of:
PMAG revisions?
MESC revisions?
Other ESU publications?
Is there a charging system to customers
If used what is mark-up?
Is there a charge for handling returns?
Are the following documents available and up-to-date:
List of specimen signatures?
Lists of account descriptions and codes?
Authority manuals?
Document retention guidelines
Detailed descriptions of work processes?
Is there a procedure which ensures an periodic review of these documents?
Can relevant function check authorisation signatures?
Are import duties reclaimed where possible?
Is mark-up for orders placed abroad differentiated?
Are there conditions for sale of materials to ensure that the company is not liable for sold
materials?
Is there a simple administration for returnable packing such as cable reels, containers, pallets
etc.?
Who is responsible for the contracts in the department?
Is there a centrally maintained list of contracts with renewal dates?
Are timely advices sent to parties concerned when a contract is due for review?
Is progress of contract negotiations monitored?
Is there a central filing system?
How does it operate?
Are files easily accessible by authorised staff?
Is there backlog in filing?
Are retention periods maintained?
What happens with files after retention period?
What happens with dead files?
8.3 STOCK RECORDS AND ACCOUNTS
Is stock recording system geared to meet complexity of companies operations?
With which departments/sections is there interfacing?
Is system integrated with other company systems?
Is document flow monitored for progress?
Are there specific areas of concern?
How long is average processing time for documents such as MIV's, MRV's, MTV's and MRS's?
Who is responsible for invoice checking and who for payment?
How long is average time for invoice processing?
How many days after receipt are invoices paid?
Is there a backlog and is this monitored/reported?
Is there a procedure of invoice differences?
Is authorisation of differences delegated to others then the buyer?
How many invoices are paid?
What is percentage of invoices being paid too late?
Are causes of "late payments" investigated and analysed?
Are accounts regularly reconciled with Finance?
At which intervals?
Are discrepancies investigated and reported?
Are there many discrepancies?
How much time is involved in solving discrepancies?
Are there old uncleared items in suspense accounts?
Are these items monitored and reported?
Are there active efforts to clear the uncleared items?
How many
o
Pending invoices? Since when?
Pending receipt? Since when?
Pending claims? since when?
Materials transfers? Since when?
Other documents? Since when?
8.4 STOCK CHECKING
Is there a documented stock checking plan?
Who is responsible for compiling stock check plan?
Are there stock checking procedures?
Which method is used:

o
Annual?
Semi-annual?
Perpetual?
What is stock check cycle of complete inventory?
Are fast moving items checked more frequently?
Who is authorising write-off and write-on vouchers?
What are the authorised quantity and value tolerances?
Is there periodic a 'Certificate of Correctness' of the materials inventory required?
Are the write-on and write-off vouchers routed via the Ordering sections?
Is actual progress in accordance with planning?
Is there a proper balance between the stock check plan and those MESC groups which are vital
to companies operations?
Do warehouse personnel know in advance which groups and when will be checked?
Do stock checkers have prior experience in warehouse-operations and/or with the materials
under their responsibility?
On what basis are stock-checkers selected?
How long are they normally planned to stay on the job?
What is the average accuracy of stock records
percentage at first count (on yearly basis)?
percentage at final count (on yearly basis)?
what are values involved?
What are yearly cost of:

o
theft?
damage?
lost materials?
Are stock check results regularly reported?
Are records maintained in sufficient detail to permit investigation of differences?
Are the results analysed for trends?
Are there active efforts to reduce stock check differences?
8.5 DATA PROCESSING SYSTEM
Are f0or the systems in use following documents available and up-to-date?
o
Functional Specifications?
Operating Instructions?
Construction Guide?
Operators Guide?
User Guide?
Audit report?
Flowcharts?
Fallback procedure?
Is responsibility accepted for operational computer systems?
Is there adequate involvement in new systems under development?
Is there one focal point for all computer matters?
How many and which housekeeping jobs were done during last 12 months?
Are there an unreasonable number of errors in the computer systems?
What action is being taken to reduce the error factor?
Have Material Staff been reduced after the introduction and full working of the systems?
Did Staff reductions form part of the economic justification for the computer systems?
What are yearly computing costs?
Is there adequate security of computer data?
Are Users departments, Finance and Head Materials satisfied that in event of a break down,
adequate arrangements exist for processing work?
Are offsite storage arrangements for critical data satisfactory?
Are there interfaces with other systems?
Are these interfaces on-line or via batches?
Are or can Materials Systems, with advantage, be integrated with systems for other departments?
What is availability of system for

o
input ?
retrieval?
How many terminals are connected within Materials Dept.?
How many terminals and which Users Departments are connected?
Have you adopted a "password" system?
Is inputting centralised and/or real time decentralised?
Is document processing up-to-date?
Have Materials staff attended training courses aimed at improving the efficiency by better use of
computers?
8.6 METHODS AND PROCEDURES
Are there established procedures to ensure that analyses and financial reports are
o
up to date?
designed to meet management requirements?
produced at appropriately regular intervals to provide meaningful comparisons period to

period?
Are these procedures

o
designed to incorporate yardsticks and performance indicators?
sufficiently detailed to highlight operational and financial factors warranting management

attention avoiding unauthorised and/or unnecessary expenditures?
Is there a departmental plan to ensure regular review of the adequacy of the procedures?
Is it documented?
Is it monitored for progress and reported?
Is it actual in line with planned progress?
Is active interest taken for reviewing/simplifying paperwork in Materials Dept.?
Is there a focal point responsible for the distribution of all internal procedures?
Is mastercopy available?
Is there controlled distribution?
Are procedures such that, where possible, routine work is in front of non-routine work?
Are procedures clear and understandable?
Are aspects of any transaction connected with

o
authorisation
receiving
recording (record keeping)
reconciliation (comparing book/physical and control of accounts)
safeguarding
clearly segregated?
-
If segregation of duties is impossible or impractical, are areas of possible risk identified and are
reasonable alternative controls in operation?
9.0 MATERIALS OPERATIONS
9.1 GENERAL
What are the objectives of the operations section?
Are the OPU policies known on safety and environmental issues?
Is there a OPU policy which defines who is responsible for storage of which categories of
materials and equipment?
What is the policy on inspection of goods on arrival, during storage and at issue?
Are adequate work instructions prepared and implemented for handling, receiving, storage and
delivery of materials?
Are these instructions monitored/re-evaluated regularly?
Are there separate instructions for safe handling and storage of

o
chemicals?
explosives?
gasses?
Are these procedures and instructions monitored and re-evaluated regularly?
Are designated quantities of materials required for emergencies such as fire, explosion, oilwell
blowouts etc. separately stored in the warehouse and not drawn on for normal issues?
Are these materials regularly and frequently examined to ensure good condition and readiness for
immediate use?
Have materials received been cleared by Customs?
Is there a special area for uncleared materials?
How is Customs clearance organised?
Are delays created by missing documents?
What is average time lapse between arrival of goods in port and delivery to the Company?
What is safety record of operations?
9.2 STRUCTURE
How is the operations section organised?
Which types of administration are carried out by this section (e.g. movables, contracts, customs
clearance)?
Are there any obvious shortcomings in the location of warehouse and/or yards which hinder
efficient materials handling?
Is there a potentially dangerous proximity to public areas?
Any plans for new warehouses?
Is advice available on modern methods/designs?
Have alternatives been considered?
Are there procedures and regular schedules for the inspection of materials and products in
storage?
Are these procedures adequate to prevent deterioration and/or damage?
Is there an effective filing and duplicating system for materials and equipment certificates?
Is there a location-code system?
Are documents such as MIV, MRV, MTV and MRS processed into the computer system by
warehouse personnel?
Centralised or decentralised?
Are sufficient terminals available?
Are there clearly segregated areas for

o
Receiving?
Inspection?
Issue/despatch?
Returns?
Claims?
Salvage?
Scrap?
Waste?
Direct Charge awaiting collection
Are hazardous materials covered by a separate procedure?
Is there first in first out storage?
Are fast moving items and slow moving items stored separately?
Is direct charge material sensibly under control?
Is there integrated or separated storage of "standard" surplus items?
Is there integrated or separated storage of standard project material?
Are valuable items locked away?
Are there free issues for materials stocks of low value fast moving items?
Are there free issues points on plant site for low value fast moving items?
Is there a delivery service to users?
How is it organised?
Are stock-outs followed up and are User Departments properly advised of stock-outs and action
taken?
Are User Departments using squirrel stores?
Why do User Departments have these stores?
Does Materials Dept. play an active role in discovering and eliminating unnecessary squirrel
stores?
Is there unidentified Project Surplus?
Is there materials in warehouse/yards which is not on the books?
How many items are there in the warehouse?
How many movements are there per man-hour of warehouse personnel?
Are OPU owned materials and goods stored with third parties, if any, clearly identified as OPU
property?
Are these materials registered and monitored?
Are there written instructions for preservation of materials?
Are the results of preservation effective?
9.3 RECEIVING AND DESPATCH
Are incoming materials counted, measured and weighed to the extent necessary on receipt?
Are weighing machines regularly tested?
Are materials labelled with MESC Nos and descriptions?
What is system to control any inspection requirements?
How is conformance established?
Is checked and approved material identified and segregated from that not checked and
approved?
Is there effective control to prevent use of non-conforming material?
Is receiving clerk responsible for MRS preparation?
When and where is MRS prepared?
Is MRS containing all necessary information to allow proper checking?
How are outstanding MRS/s monitored?
Which unit is responsible for storage of received materials?
Who is responsible for preservation if required?
What are arrangements to prevent double handling?
How are new receipts distinguished from existing stocks?
Is there central control to ensure clearance of all items of each Bill of lading?
Is receiving section responsible for checking "direct charge" materials?
How are Users Departments advised that material is awaiting collection?
Are materials awaiting collection monitored?
Is there a documented procedure in case "direct charge" materials cannot be collected by client
departments for a protracted period of time?
Is there a separate receiving section for "project materials"?
How are Users Departmental advised that material has been received?
Is receiving section reasonable clear of material?
Is there a standard procedure to lodge a claim on

o
Shipping line?
Transporter?
Manufacturer, suppliers, agents (COM)?
Insurance Company?
Are claims monitored?
What is date of "oldest" outstanding claim?
Which method/facility is available to users to enquire items held in stock?
In case of inventory print-outs are used
How often are updates distributed?
Is distribution controlled and who is responsible?
How many copies are distributed?
Is there an effective spread throughout organisation?
Is there a "telephone-service" on availability of stock items?
In case of on-line facility

o
Linked to Users Department system(s)?
Is on-line real time (direct into Materials systems)?
If on-line is not real time but via Users Departments systems how is actual stock position known
to Users?
Is (are) there (a) central point(s) to receive MIV's?
How are MIV's controlled?
Is there a check on authorisation?
Is there a check on cost allocation?
What is average delivery time?
Are frustrated issues monitored and reported?
Is there a system by which frustrated issues are issued upon receipt of new stock?
Is there on-line MIV preparation?
Are there printer facilities in the warehouse?
Is there a counter service?
How many clients per day?
Does counter service require full time despatchers?
Is there a delivery service?
Is there a trip schedule?
Are unscheduled trips (rush issues) monitored and reported?
Are items ready for despatch properly labelled and addressed?
Are special containers and/or pallets provided for handling/despatch of materials?
Are returns of containers and pallets monitored?
Are there (regular) complaints about damages, shortages and/or losses?
Are these complaints registered and reported?
9.4 WAREHOUSES
Are sizes and layout of warehouses adequate?
Do they cover future plans?
Are there offices and/or workshops in the warehouse building?
Is there good overview (security) from the supervisory's office?
Are storage facilities appropriate for climate conditions and type of operation?
Is entrance to the warehouses restricted?
How is access controlled?
Are the various warehouses lockable?
Is there a central key cabinet?
Is there a list of key holders?
Is key holders list up-to-date?
What is system to determine storage sequence?
Is effective use being made of available space?
Is space utilisation regularly monitored and reported?
Is "at random storage" introduced or contemplated?
Are Storage areas clearly marked?
How is first-in, first-out system secured?
Does available space between racks, storage bays etc. allow for effective manoeuvring with the
available handling equipment?
Are warehouse floors in good conditions and constructed to bear the loads of full racks and fully
loaded handling equipment?
Are there separate storage areas provided for

o
Paint products? (ventilated)
Rubber? (air conditioned?
Electrodes? (heated cupboards)
Is the racking system flexible, can it easily be modified?
Is there a special system to store

o
large gaskets?
stud bolts?
heat exchanger tubes?
Is there a "partition-off" in the warehouse for the safe keeping of "attractive" items?
Are arrangements in connection with risks sufficient?
Is material clearly marked with MESC number and descriptions?
Is Surplus material, in addition marked whether it is Dead of Excess?
What type of marking is used?
Is there good housekeeping?
Is there a good standard of tidiness and cleanness in the warehouses?
Is there a safe disposal of waste?
Are safety standards followed in the warehouses?
Is there good lighting?
Is security adequate?
What is procedure for "out of hours" service?
9.5 YARDS
Are yards adequate in size and layout?
Do they cover future requirements?
Are storage facilities appropriate for climate conditions and type of operation?
Is there a adequate system for access control?
Are security passes being used and checked?
Are their special instructions provided to control transport 24 hours access?
Who is responsible for liaison with local police authorities?
Does fencing around allow for an inside perimeter road?
Is there a system to regularly control condition of fence?
Is perimeter lighting installed?
Are there exists for use in the event of an emergency?
Are yard roads and platforms in good condition?
Are they built to bear the loads and fully loaded trucks and handling equipment?
Are there dedicated storage areas for

o
Timber (baulks)?
Rock/Sand/Gravel bins?
Industrial gasses?
Cables?
Ropes?
Marine hoses?
Are these areas/platforms sheltered against sun?
Is proper handling gear available?
Are these materials correctly stacked/stored according to written instructions?
Are adequate and enough pipe/drill collar racks available?
Are there written instructions for stacking pipes/ collars?
Are the pipes/drill collars stacked correctly?
How is first-in, first-out secured?
Is there a dedicated storage area for Project Materials?
Are all project materials stored in that area?
Is there properly identification by project?
Is there a dedicated despatcher?
Are items stored in the yard properly preserved against corrosion/weather conditions?
Is there no water accumulation inside?
Is Surplus material, in addition marked whether it is Dead of Excess?
Is there a good standard of tidiness and cleanliness in the yards?
Is there a safe disposal of waste?
Are safety standards followed in yard operations?
What is the speed limit on the yards?
Is there one-way traffic?
9.6 SPECIAL STORAGE
What hazardous material is there in stock?
Is it well controlled?
Are there procedures and working instructions for discharging and handling of hazardous
cargo's?
Are there any Governments/Statutory requirements?
Are there adequate controls on adherence to procedures and safe work instructions for these
materials?
Are there separate warehouses and/or "partitioned-off" areas provided for

o
bulk materials
luboils and greases
chemicals
carbide
explosives
radio active materials?
Bulk storage
-
Which racking is used?
Is the racking system flexible, can it easily be modified?
Are stacks of large items and bulk material carefully stacked and is there a reasonable selection
possibility?
Are stacks self-supporting and kept clear of the walls?
Is a drive-in racking system used for slow moving items like insurance items or bulk storage
where selectivity is less important and the first-in, first-out principal is not critical?
Are safety standards followed?
Luboil and greases

-
Are there special instructions for storage of oil and greases?
Are these instructions regularly reviewed with maintenance departments?
Is storage racking used?
Is suitable auxiliary equipment for the safe and easy handling of drums and containers available?
Chemicals
-
Are there planned procedures for safe handling, storage, issuing and transport of chemicals?
Is the operation of the procedures monitored by supervisory staff and are deviations investigated?
Is the warehouse capable of being locked?
Are there emergency exits other than those afforded by the main doors?
If there is an offices and/or chaining rooms in the warehouses are they separated from the
warehouse by fire walls and self closing fire doors?
Is the warehouse bounded?
Is there a copy of the "PETRONAS guide to the Warehousing of Chemicals"?
Are products which may produce flammable atmospheres during handling or storage defined and
classified?
Is there an Area Classification?
Is there product separation/segregation?
Is the building ventilated in accordance with given guidance for zones?
Is labelling such that chemicals can be recognised on all aspects?
Is there a storage plan?
Is there a copy of the storage plan filed outside the warehouse?
Is there, in case of spillage, adequate protective clothing and equipment (including air supplied or
self contained breathing apparatus) readily available?
Are stocks frequently inspected for leakage or mechanical damage?
Is the whole area free of dirt, rags, rubbish and any redundant machinery?
Are chemicals wastes be disposed of in a safe manner?
How are obsolete stocks disposed of?
Are internal safety audits of the whole operation held?
Carbide
-
Are there written procedures on handling and storage of Carbide?
Is Carbide stored in closed drums?
Are these drums in a building exclusively used for Carbide storage?
Is building fitted with special ventilation arrangements?
Are drums stored on raised platforms?
Can entrance/exit be reached at all times?
Are drums inspected regularly?
Explosives
-
Is applicable local legislation known and adhered to?
Are there written procedures on receiving, storage, handling and issuing of Explosives?
Are Explosives stored in a dedicated well ventilated building away from other buildings?
Are there separate stores for dynamite and detonators?
Are special shoes (without nails soles of heels? or suitable overshoes readily available?
Are safety procedures in operations regularly monitored?
Is there a strict system of recording receipts and issues?
How is security arranged?
Are there frequent stockchecks carried out?
Is there excellent housekeeping?
What are disposal procedures?
9.7 MOVABLES
Is there a manual of computerised Movables Administration?
Are rental movables included in the administration?
Is purchasing, receiving, storage (until use) and surplus controlled by Materials Department?
Are there Movables purchased by others?
Are these Movables accepted "on-return"
Is there always a technical specification with "returns"?
Are all Movables under control of Materials Department?
Is there a Movables section?
Where are back-up spares and small tools for movable equipment stored?
How are these spare administrated?
Are all Movables capitalised?
If not all Movables are capitalised what is financial limit?
What is reason for taking non-capitalised items into Movables Administration?
Are movables numbered in MESC framework?
Is there an itemised inventory?
Which percentage (value) is
own stock?
rented?
leased?
Are following data registered
movables/MESC code number?
order reference
acquisition value?
book value?
physical condition code/life expectation?
inspection scheme?
location code, sponsor and field details?
Does returning procedure include an inspection?
Is there an administration of "Movables in repair"?
Is period of repair monitored?
Can all Movables be located?
What is stock-checking cycle?
Are there often stock-check differences?
Are stock-check differences reported and investigated?
Is there orderly storage in Warehouse and Yard?
Are Movables stored in the open well preserved?
9.8 MATERIALS HANDLING
Is Materials Dept. involved in materials movements outside the warehouses and yards?
(if so refer also to section 10 Transportation)
What equipment is available for materials handling inside the warehouses and yards?
Is hoisting and lifting gear inspected on a regular base?
Are safe handling procedures strictly observed?
Are there regular operational inspection of contractors?
Is there a planning for efficient handling to avoid delays and extra costs?
Who coordinates loading, unloading and required handling equipment?
Is there a good planning to ensure a quick turn around of containers to avoid excessive rental
rates?
Is there a good selection of slings available for warehouse and yard operations?
Are slings periodically examined?
Are safe working loads clearly marked?
Is "lifetime" known and monitored?
Are certificates readily available?
Are regulations regarding use and control of slings strictly observed?
Is there an economical quantity and range of pallets available?
Are unit load principles applied?
Are returns of pallets monitored?
Are OPU (Mat. Dept.) owned pallets marked as such?
Is there, on a regular base, inspection of pallets?
Are there adequate and enough general accessories available and utilised such as
o
spreader bars
scales, crane weighers and fork lift load indicators?
porter's trolleys, four-wheeled handtrucks and dollies?
adequate handtools and strapping machines?
Is the use avoided of packing materials which could harm the environment (e.g. expanded
polystyrene)?
Are special regulations for the safe handling of hazardous materials known?
Are they reflected in handling procedures?
Do staff know what to do in case of calamities?
Is suitable safety clothing available?
Is there a procedure for wearing gloves, safety helmets, safety glasses and safety shoes?
Is only authorised and trained personnel allowed to operate mechanical devices for materials
handling?
Are there departmental safety audits on Materials handling in warehouses and yards?
Is there assessment of staff on safe handling?
9.9 SALVAGE AND SCRAP
Is there a salvage and scrap yard?
Are operations under control of Materials Dept.?
Is the yard
fenced?
properly drained?
provided with roads?
kept to the minimum required for storage and work to be undertaken?
Salvage
-
Has the receiving function the ability to identify materials?
Are the materials differentiated between repairable and/or foreseen use and not repairable and/or
not foreseen use?
Is the Salvage yard also used for temporary storage of Surplus used equipment awaiting
disposal?
Is material clearly identified and stored in an orderly manner?
Is there also "retention material" on request of user departments?
Is reconditioning done against firm requirement only?
What is the accounting system?
Is there a simple administration which includes, where required, certificates?
Does the pricing system for salvage materials encourage the usage?
Are salvage lists, grouped by MESC number, up to date?
Scrap
-
How is scrap disposed of?
Is there a scrap disposal contract?
Are international price levels known?
Is there a segregation of non-ferrous and ferrous?
Is there a further segregation?
Is the re-use possibility for the original purpose of the material being prevented?
Is the yard divided in to clear defined areas?
Are the defined areas sub-divided so that accumulation and storage can continue while sold
scrap is awaiting removal?
Is there a weighbridge available?
Is special attention given to security measures for high value scrap such as alloy and precious
metals?
What are yearly proceedings of

o
sales of scrap?
issues form salvage?
other sales?
Is there a Salvage/Scrap procedure for material and equipment which has been used in
connection with hazardous substances?
Is the returning department responsible for making the material safe for handling?
Are there special procedures for disposal of contaminated scrap and/or other materials?
Who is responsible for the registration of the movements of these disposals?
Are these procedures strictly adhered to?
Who is monitoring, investigating and reporting?
Is there a good standard of tidiness and cleanness?
Are there safe-working instructions for the yard operators?
Are safety standards monitored?
9.10
WASTE DISPOSAL
Are there detailed OPU procedures and Guidelines for the handling and storage of waste
material?
Are there departmental instructions and procedures for handling waste materials?
Is relevant legislation known?
Who is responsible for handling and disposal of waste?
Are different types of (hazardous) waste materials properly labelled and segregated?
Are records kept for future reference?
Is there a retention period for such records?
Is waste being stored for prolonged periods?
Are there instructions on packing materials?
Are permits required/available?
Are approved and authorised contractors used?
Is waste packaged/labelled approximately?
Is transport documentation available in accordance with legislation/company rules?
10.0 TRANSPORT
10.1
GENERAL
Are there supply activities by land?

o
water?
air?
What is the pattern, lengths of supply lines?
Are there any constraints?
Is there one or a number of contractors per supply discipline?
Are there tenders or negotiated contracts?
Are there general and/or national guidelines on policies, standards and procedures for transport
by :
o
land?
water?
air?
Are these regulations known within Transport Dept. and are regulations adhered to?
Is there a departmental procedure manual?
Is distribution controlled?
Is update/revision available?
Are control sheets available?
When was last update issued?
Is there a guide for user departments?
Is there a monthly department report?
Is there a management summary of the monthly report?
Are there locally established performance indicators?
Are the centrally developed performance indicators used?
Is there Management awareness of the p.i.'s?
Is there departmental awareness of the p.i.'s?
Is there guidance for evaluation of the p.i.'s?
Are there written instructions for handling and transportation of hazardous materials?
Is there a system for dispatching and receiving these materials?
Is receiving party advised in advance of these materials?
10.2
STRUCTURE
Is Transport Dept. responsible for the contracts?
How is the preparation and planning of operations arranged?
Is there a medium and long term planning?
Is the medium term planning based on:

o
the work programme?
drilling programme?
shutdowns?
maintenance?
new construction?
Is the information obtained adequate?
Is planning and are contract commitments flexible enough to be adjusted when drastic changes in
activities occur?
Are, apart, from your basic requirements, your contracts linked with operational activities such as
drilling contracts?
10.3
LAND TRANSPORT
Is Land Transport responsible for the planning and the execution of rig moves?
How many rig moves were carried out:

o
last year?
this year?
How many rig moves are planned for next year?
Are total fleet requirements based on this programme?
Are rig moves carried out, where possible, with current fleet (own and contracted)?
Is there, at short notice, sufficient capacity in the region if additional capacity is required?
Is there a contractor's monopoly situation?
How many units are used:

o
heavy fleet with rig moving capacity?
haulage fleet?
light fleet?
passenger transport?
What is composition of the handling equipment?
Which part of the transport fleet and handling equipment is company owned?
Who is responsible for maintenance and replacement?
What is the replacement policy?
Are there standard specifications for the equipment?
Are minimum requirements for carrying capacity of dry and liquid bulk laid down?
Are there scheduled supply trips?
Who is authorised to approve ad hoc and urgent trips?
Is there a good planning for efficient handling to ensure a fast turn around of equipment and
optimum utilisation?
Is utilisation monitored and registered and a performance indicator?
What other performance indicators are used for measuring performance of both operators and
users?
How are Opex costs such as fuel and tyres monitored and controlled?
Is materials handling contracted out or carried out by own personnel?
Are there written handling procedures?
Are there regular operational inspections of contractors?
Is there a check on contractor's yards and maintenance facilities?
Are inspection requirements laid down in written procedures?
Is there a good selection of slings available?
are safe working loads clearly marked?
Is there an economical quantity and range of pallets, baskets and containers?
Are returns of pallets, baskets and containers monitored and marked as OPU property?
Is there, on a regular base, inspection of pallets, baskets and containers?
Are there adequate and enough general accessories available and utilised?
Is gross vehicle weight controlled?
Is there an operational checklist while despatching vehicles?
Is there a checklist of equipment to be carried in the event of driving under extreme conditions?
Who is responsible for safety in Land Transport operations?
Is there nominated personnel to check on the safety procedures?
Is there professionalism to check on adherence of the safety procedures?
Is this monitored and registered?
Do all OPU and/or contracted vehicles have seat belts installed?
Is there a regular check on usage of seat belts?
Is there an OPU driving licence?
10.4
WATER TRANSPORT
Standby Vessel
-
Are there minimum requirements on the technical specification of standby vessels?
Are there standard specifications for the equipment of the vessel?
Is there inspection of the agreed outfit of the vessel prior to being contracted?
Which parties are represented in such an inspection?
Is there a standard time charter party used for the contract?
Supply Vessels
-
Are there general guidelines on the minimum specification of the supply vessels?
Are minimum requirements for carrying capacity of dry and liquid bulk laid down?
How many Supply vessels are under contract?
What is balance between types of vessel?
How many fleet owners are involved?
How many nationalities are the flags under which they operate?
What is ratio of supply vessels versus number of installations?
What are cost per tonne per mile?
Is there direct cost allocation?
What other performance indicators are used?
Is there a planned sailing schedule?
Who is authorised to approve unscheduled trips
Who is responsible for loading and scheduling of the vessels?
Are there cargo handling procedures?
Is materials handling contracted out or carried out by own personnel?
Are there regular operational inspections of contractors?
How many cranes and forklift trucks are available?
Is there a planning for efficient handling to avoid delays and extra costs?
Is there a good planning to ensure a quick turn around of containers to avoid excessive rental
rates?
Is there a good selection of slings available?
Are safe working loads clearly marked?
Is there an economical quantity and range of pallets, baskets and containers?
Are returns of pallets, baskets and containers monitored and marked as Company property?
Is there, on a regular base, inspection of pallets, baskets and containers?
Are there adequate and enough general accessories available and utilised?
Are optimum cruising speeds laid down to masters/companies?
Who has final decision as to weather a vessels sails or not, e.g. in adverse or forecast adverse
whether?
Is there an instruction manual for :

o
masters?
rig personnel?
Tugs and anchor handling vessels

-
Who is responsible for the planning and the execution of rig moves and anchor handling?
How many rig moves were carried out

o
last year?
this year?
How many rig moves are planned for next year?
Are total fleet requirements based on this programme?
Are rig moves carried out, where possible, with current fleet (own and chartered)?
Is there, at short notice, sufficient capacity in the region if additional capacity is required?
10.5
AIR TRANSPORT
Is aircraft used in support of the Operations?
Are Aviation operations audited, with regular intervals?
What type of aircraft are being used?
Are the aircraft being used more than one engine aircraft?
Who is responsible for the contract?
Who is contracting company?
Is the contractor of the aircraft a civil or government operator? -
Are standard contracts used?
Are there fixed terms defined in the contract?
Is there a termination clause to cope with drastic changes in activities?
Is the contract linked with the drilling contract?
What is the level of service provided by contractor?
Are there standard rules and procedures for Aircraft operations?
How is the aviation fuel provided and what quality control has been adopted?
How is the consumption of fuel recorded and monitored?
Is budget based on historical data?
Are passenger utilisation figures satisfactory
Is there direct cost allocation?
What other yardsticks are used for measuring performance of both operators and users?
Is there a planned flying' schedule?
Who is authorised to approve unscheduled trips?
Who is responsible for loading and scheduling of the aircraft?
Are there cargo handling procedures?
11.0 INTERFACE WITH USERS DEPARTMENTS

11.1
PERSONNEL
Is there a written code of employee conduct and discipline?
Is there a clear and unambigous policy on conflict of interest?
Is written code and policy communicated to all employees?
Is there investigation of the background and reference of applicants to a Materials Dept. job
carried out?
Is there a OPU Training Guide?
Is there a schedule of functional training programmes?
Who is responsible for the follow up of training requirements?
Who administers training of incumbents?
Are all Materials job descriptions up to date and recently formally emulated?
Is there a good contact with Materials

o
Department Head?
Section Heads?
Individual employees?
Is overtime monitored by Personnel Dept.?
Have causes of overtime been investigated by Materials staff?
Is there compared with other depts. more or less overtime in Materials Dept.?
How does absenteeism in materials compare?
Are there discussions/meetings with Head Materials on :
organisation plans?
career development?
job rotation?
staff reporting?
appraisals?
merit increases?
interfunctional moves?
external postings?
training?
Are there discussion points/problem areas affecting :

o
materials policy in general?
Services of ESU?
Communication with Materials representatives?
What is general impression of the impact of the functioning of the Materials Department within the
OPU?
11.2
FINANCE
Does the Materials Organisation satisfy current Finance requirements?
Is Materials Dept. staff properly trained to do the "finance-type of work"?
How often do senior members of Materials Dept. meet senior members of Finance?
Do such meetings provide an adequate channel of communication?
What is tax legislation impact on operating/capital cost and write-offs?
Who is responsible (financially) for surplus materials?
Are Finance computers systems interfaced with Materials computers systems?
What system is used?
Is the interfacing on line of via batches?
Is Finance satisfied that in event of a breakdown of the Materials computer system adequate
arrangements exist for progressing work?
Is there any duplication of work through both functions carrying out the same clerical/accounting
activities?
Is Materials Dept. carrying out work which would be better done by Finance?
Is Finance function carrying out work which would be better done by Materials?
Are Materials accounts regularly reconciled?
Are discrepancies investigated and reported by Materials staff?
Are there (too) many discrepancies?
Are the discrepancies solved in reasonable time?
Are there old uncleared items in suspense accounts?
Is there active effort from Materials Staff to clear these items?
Are monthly reconciliations carried out?
Are there any discrepancies?
Are there overdue items in suspense accounts?
Are invoices paid within time limits?
Is there periodically a certificate of "Correctness of the materials inventory" required?
Is Finance satisfied with the accuracy of the Stock Inventory figures?
Are there discussion points and/or problem areas affecting :
quality of Local Materials support?
services of ESU?
communication with Materials representatives?
OPU?
11.3
ENGINEERING
Does the Materials Organisation satisfy current Engineering requirements?
How often do senior members of Materials Dept. meet senior members of Engineering Dept.?
What is done by Materials to make policies and procedures well-known in Engineering Dept.?
Is there a senior Materials Dept. represented in the Piping Class Committee?
Is there pressure from Materials to standardise?
Are reasons for standardisation made sufficient clear?
Are Engineering computers systems interfaced with Materials computers systems?
What system(s) is (are) interfaced?
Is (are) system(s) interfaced on line or via batches?
Is Engineering satisfied that in event of a breakdown of the materials computer system adequate
arrangements exist for progress work?
Is Engineering Dept. satisfied with the accuracy of the Stock Inventory figures?
Are there discussion points and/or problem areas affecting:
processing time of requisitions?
expediting?
services of ESU
How are the services rendered by Materials appreciated on:

o
Flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
price levels
low?
fulfils?
high?
information flow
low?
fulfils?
high?
Standardisation
low?
fulfils?
high?
technical know-how
low?
fulfils?
high?
OPU?
11.4
PROJECTS
What is planned project activity?
How will it be executed (who designs, procures, erects)?
What will be the demands on Materials resources?
Does the Materials Organisation satisfy current Projects requirements?
How often do senior members of Materials Dept. meet senior members of Project/New
Construction Dept.?
What is done by Materials to make policies and procedures well known in Project/New
Construction Dept.?
Is involvement from Materials Dept. in the Project specification of a good standard?
Are "Approved Suppliers lists" included in Project specs.?
Are Project Engineers aware of the delivery times for equipment and bulk materials?
Is Materials Dept. providing this information regularly as a routine?
Is the SPIR system used?
Is there involvement from Materials Dept. in "turnkey" contracts?
Are requisitions routed through Materials Dept. for screening availability ex surplus and/or excess
materials?
Are Project computers systems interfaced with Materials computers systems?
Is Project/New Construction Dept. satisfied that in event of a breakdown of the materials

computer system adequate arrangements exist for progress work?
Are Project Engineers satisfied with the accuracy of the Stock Inventory figures?
Is the service level made known and acceptable?
Is the integration of standard project material with standard MRO materials understood and
appreciated?
Are up-to-date Surplus listings distributed?
11.5

o
services of ESU
Communication with Materials representatives?

o
flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
price levels
low?
fulfils?
high?
status of requisition
low?
fulfils?
high?
expediting
low?
fulfils?
high?
documentation
low?
fulfils?
high?
information flow
low?
fulfils?
high?
handling surplus
low?
fulfils?
high?
standardisation
low?
fulfils?
high?
technical know-how
low?
fulfils?
high?
OPU?
MAINTENANCE
Does the Materials Organisation satisfy current requirements of Maintenance Depts.?
How often do senior members of Materials Dept. meet senior members of Maintenance Depts.?
Are they any major overhauls planned which may have an impact on materials resources?
Is involvement from Materials Dept. in the Maintenance meetings of a good standard?
What is done by Materials to make policies and procedures well known in Maintenance Depts.?
Are Maintenance Staff members participating in the Standardisation Committee/Meetings?
Is the selection of spare parts a joint effort between Materials and Maintenance Staff?
Are Maintenance computers systems interfaced with Materials computers systems?
Is Maintenance Dept. satisfied that in event of a breakdown of the materials computer system
adequate arrangements exist for progress work?
Is Maintenance staff satisfied with the accuracy of the Stock Inventory figures?
Is the service level made known and acceptable?
Is the integration of standard MRO material with standard project material understood and
appreciated?
Are there field stores under control of Materials Dept.?
Is Maintenance Staff satisfied with this service?
Are there squirrel stores?
What are the reasons for these stores?
What is estimated value of this "stock"
Have the squirrel stores been subject of discussions with Materials Dept.
Has there been a serious attempt to eliminate the squirrel stores?
expediting?
services of ESU
How are the services rendered by Materials appreciated on :

o
flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
price levels
low?
fulfils?
high?
status of requisition
low?
fulfils?
high?
expediting
low?
fulfils?
high?
documentation
low?
fulfils?
high?
information flow
low?
fulfils?
high?
handling surplus
low?
fulfils?
high?
standardisation
low?
fulfils?
high?
technical know-how
low?
fulfils?
high?
OPU?
11.6
PETROLEUM ENGINEERING
Is Programme material system in use with Materials Dept. meeting the complexity of Company's
operations?
How often do senior members of Materials Dept. meet senior members of Petroleum Eng. Dept.?
Is involvement from Materials Dept. in the Petr. Eng. meetings of a good standard?
Are there focal points for Programme materials stock control?
How is projected programme and/or work schedule advised to Materials Dept?
How is Petr. Eng. advised on stock and or order position and consumption data of programme
materials?
Are there standard "shopping lists"
Is materials involved in Mud Service contracts?
Are Supply Agreements being used for bulk supplies?
Are Supply and repair/services Agreements being used?
Is Materials Dept. satisfactorily monitoring these agreements ensuring that:

o
terms and conditions of agreement are complied with?
the service level meets the required and agreed standard?
the prices continues to be justified?
quality is maintained?
Is the method of estimating the effect of standard changes effective?
Are Petr. Eng. computers systems interfaced with Materials computers systems?
Is Petr. Eng. Dept. satisfied that in event of a breakdown of the materials computer system

o
expediting?
services of ESU

o
flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
supply agreements
low?
fulfils?
high?
stock values
low?
fulfils?
high?
information flow
low?
fulfils?
high?
handling certificates
low?
fulfils?
high?
handling returns
low?
fulfils?
high?
standardisation
low?
fulfils?
high?
technical know-how
low?
fulfils?
high?
OPU?
11.7
DRILLING
Does the Materials Organisation satisfy current requirements of Drilling Dept.?
How often do senior members of Materials Dept. meet senior members of Drilling Dept.?
Is involvement from Materials Dept. in Drilling Dept. meetings of a good standard?
What is done by Materials Dept. to make policies and procedures well known in Drilling Dept.?
Is there a change in drilling activity foreseen which has an impact on Materials resources?
Are Drilling Dept. computers systems interfaced with Materials computers systems?
Is Drilling Dept. satisfied that in event of a breakdown of the materials computer system adequate
arrangements exist for progress work?
expediting?
services of ESU

o
flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
information flow
low?
fulfils?
high?
handling returns
low?
fulfils?
high?
Standardisation
low?
fulfils?
high?
technical know-how
low?
fulfils?
high?
OPU?
11.8
OPERATIONS
Does the Materials Organisation satisfy current requirements of Operations?
How often do senior members of Materials Dept. meet senior members of Operations Dept.?
Is involvement from Materials Dept. in operations Dept. meetings of a good standard?
What is done by Materials Dept. to make policies and procedures well known in Operations
Dept.?
Are service agreements with a materials content made with or without Materials Dept.
involvement ?
Has each piece of equipment been classified in

o
Vital or
Essential or
Auxiliary and general Purpose equipment?
Has Materials Dept. (together with Maintenance Dept.) used this classification to classify the
required spare parts?
Are Operations Dept. computers systems interfaced with Materials computers systems?
Is Operations Dept. satisfied that in event of a breakdown of the materials computer system
services of ESU

o
flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
information flow
low?
fulfils?
high?
handling returns
low?
fulfils?
high?
standardisation
low?
fulfils?
high?
technical know-how
low?
fulfils?
high?
OPU?
11.9
SAFETY AND ENVIRONMENT
Is environmental legislation known with Materials Dept. where applicable?
Is Materials Dept. acting in line with legislation and company regulations?
Are there written procedures?
Does the Materials Organisation satisfy current requirements of Safety Dept.?
How often do senior members of Materials Dept. meet senior members of Safety Dept.?
Is involvement from Materials Dept. in Safety Dept. meetings of a good standard?
What is done by Materials Dept. to make policies and procedures well known in Safety Dept.?
Does the organisation have a purchasing policy statement or senior management directive that
includes safety control requirements?
Does Materials Dept. meet these requirements?
Are purchases with occupational safety and health implications checked with the safety dept.
prior to the purchasing action?

o
contribution of Materials Dept. to meet

objectives for purchasing specifications
designed to control safety and health problems?
o
-

o
flexibility
low?
fulfils?
high?
services in general
low?
fulfils?
high?
information flow
low?
fulfils?
high?
OPU?

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PETRONAS TECHNICAL STANDARDS

MATERIALS APPRAISAL MANUAL

PETRONAS and its affiliates.

CONDUCTING THE INTERVIEWS

OUTLINE OF THE APPRAISAL

DISCUSSION WITH SENIOR OPU MANAGEMENT

ORGANIZATING AND STAFFING

BASIC INFORMATION COLLECTION

ORGANISATION AND STAFFING

MANAGEMENT CONTROLS AND YARDSTICKS

STANDARDISATION AND CODING

SURPLUS AND SALVAGE

STOCK RECORDS AND ACCOUNTS

DATA PROCESSING SYSTEM

METHODS AND PROCEDURES

RECEIVING AND DESPATCH

SALVAGE AND SCRAP

INTERFACE WITH USERS DEPARTMENTS

SAFETY AND ENVIRONMENT

1.1 SCOPE OF MANUAL

1.2 OBJECTIVE OF QUESTIONNAIRE

1.3 STRUCTURE OF QUESTIONNAIRE

1.4 CONDUCTING THE INTERVIEWS

Size of operations (production, rig count, refinery throughput, etc.)

Present and future activities (incl. trends, major projects).

Although some weaknesses were identified which require timely

The weaknesses identified individually or in aggregate significantly

Interface With User Departments

A) Recommended Action Items

2.0 MATERIALS APPRAISAL

2.3 INTERNAL AUDIT

2.4 APPRAISAL TEAM

3.0 OUTLINE OF THE APPRAISAL

3.1 PRE-VISIT PREPARATION

3.2 DISCUSSION WITH SENIOR OPU MANAGEMENT (incl. User Dept.)

3.3 ORGANIZATING AND STAFFING

Evaluate effectiveness of organization, quality/quantity of staff, workload, career progression and

3.4 MANAGEMENT CONTROLS

Is there a healthy delegation of authorities, information and responsibilities, as well as adequate

3.5 INVENTORY MANAGEMENT

What is the policy practice in the OPU and is it considered Sound?

Is proper use being made of adequate computer systems?

4.0 APPRAISAL PREPARATION

4.1 BASIC INFORMATION COLLECTION

4.2 INFORMING EMPLOYEES

5.0 ORGANISATION AND STAFFING

What is (are) prime objective(s) of OPU?

How is OPU organised?

Is there a statement of general business ethics?

Does statement adequately cover department, including an inambigious policy on conflict of

Is statement incorporated in departmental procedures?

Is there a departmental core statement?

What are the departmental objectives?

Does senior management support the core statement?

Does senior management support the objectives?

How do they give this support?

Are there separate objectives/targets for the sections?

Are the objectives/targets documented?