AALRT

AALRT Enterprise Standard

Warehousing Management Method

Approved by:

()
Checked by (Law):

()
Checked by (English):

()
Checked by (Chinese):

Reviewed by: Sun Hongyu

2015.08.20
Date: August 20, 2015

Prepared by: Liu Jinxiang

Dept.: Maintenance Center

2015.04.30
Date: May 30, 2015

A
Version: A

Revised by:

Revised on:

Controlled State: Internal

Control

Issue No.:

2015.08.30
Issued On: August 30, 2015

2015.11.20
Implemented on: Nov.20,2015

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Content
1 .........................................................................................................................................................3
1. Objective................................................................................................................................................3
2 ..................................................................................................................................................3
2. Scope of Application...............................................................................................................................3
3 .........................................................................................................................................................3
3 Definitions................................................................................................................................................3
4 .........................................................................................................................................................3
4 Responsibilities.......................................................................................................................................3
5 ..................................................................................................................................................5
5. Work Process.........................................................................................................................................5
7. ......................................................................................................................................................11
7. Supplementary Provisions....................................................................................................................11
A...................................................................................................................................................12
Annex A:...................................................................................................................................................12
B...................................................................................................................................................13
Annex B....................................................................................................................................................13

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Warehousing Management Method

1
1. Objective
,
The Method is prepared to satisfy the storage needs of materials and standardize storage management
of materials.

2
2. Scope of Application
AALRT
The Method is applicable to the management of production materials at central warehouse of AALRT.

3
3 Definitions
3.1 AALRT

3.1 Central material warehouses: warehouses of AALRT for storage of production materials, including
warehouses controlled by Material Division and spare parts warehouses controlled by production
materials.
3.2 :,

3.2 Quality perfectness ratio of inventory materials: the proportion of amount of inventory materials with
good quality to the amount of all inventory materials, which reflects the quality conditions of inventories.
3.3 :

3.3 Inventory age analysis: a technique to analyze the overstocked inventory at warehouses. Calculate
the inventory age of materials with backward pass method according to current inventory and
combining inbound data of each material.
3.4 :

3.4 Material inventory turnover rate: ratio between total outbound amount (total quantity) and average
inventory amount (or quantity) during same period and inventory turnover speed within certain period (1
or half a year).
3.5
3.5 Material usability analysis: analysis of inventory materials exceeding shelf life as well as the causes
of failure.

4
4 Responsibilities
4.1 AALRT
4.1 AALRT Material Division should be responsible for picking up, inbound operation, storage,
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warehouse transfer, counting, borrowing and distributing materials as well as managing productive
spare parts warehouse.
4.2
4.2 Responsibilities of warehousing management staffs
4.2.1
4.2.1 Warehousing management
1) AALRT
1) Prepare annual and monthly work plan for Warehousing Management Office and monitor the
implementation of plan according to objectives of AALRT.
2)

2) Be responsible for preparing standards for Warehousing Management Office, establishing and
improving warehousing operation rules and ensuring warehouse materials are in correct quantity and
material safety.
3)

3) Be responsible for analyzing inventory status, analyzing inventory ages and inventory turnover rate
of materials in warehouse, analyzing causes for inactive inventories, proposing advices and measures
and speeding up inventory turnover.
4.2.2
4.2.2 Distribution management
1
1) Take distribution orders by all departments and prepare material distribution plans.
2
2) Prepare distribution task orders and outsource distribution tasks to external logistics providers.
3
3) Account distribution expenses.
4.3.4
4.3.4 Inbound management
1)
1) Be responsible for picking up, inbound and accepting materials, return defective goods and accept
waste and old materials as well as carry out other routine management.
2)
2) Be responsible for collecting and keeping original certificate for inbound material and accounting.
3)
3) Be responsible for carrying out safety management of controlled warehouses.
4
4) Be responsible for arranging tasks for each shift and assessing the performance of department
staffs.
5)
5) Be responsible for material inbound handling and stacking, distribution loading and unloading.
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6)
6) Be responsible for cleaning material warehouse and conducting management and maintenance of
handling tools.
4.3.5
4.3.5 Outbound management
1)
1) Be responsible for updating, storage, dispatching, tallying, borrowing and returning as well as
distribution and management of materials.
2)
2) Be responsible for collecting and keeping original certificate for outbound material and accounting.
3)
3) Be responsible for carrying out safety management of controlled warehouses.
4
4) Be responsible for arranging tasks for each shift and assessing the performance of department
staffs.
4.3.6
4.3.6 Acceptance management
1)
1) Be responsible for picking up, inbound and accepting materials, return defective goods and accept
waste and old materials as well as carry out other routine management.
2)
2) Be responsible for collecting and keeping original certificate for inbound material and accounting.
3)
3) Be responsible for carrying out safety management of controlled warehouses.
4
4) Be responsible for conducting counting.

5
5. Work Process
5.1
5.1 Material inbound operation
5.1.1
5.1.1 Preparation before inbound operation
,
The supplier supply materials according to procurement orders or contract; the purchaser of Material
Division shall notify the warehouse of arrival of goods in advance for arrangement of warehouses.
5.1.2
5.1.2 Materials reception
1)

1) For materials transported into warehouses, inbound staff shall check number of packages and boxes
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of materials, check product name, specification, quantity and delivery time against those on delivery
note as well as packages, appearance and delivery time, then sign on the delivery note if there is no
error.
2)

2) If any package or appearance damage or incorrect quantity, the acceptor shall conduct on-site
inspection together with supplier or transportation organization or purchaser and find out who should
assume the liability.
3)
3) Materials shall be placed at holding area marked with signs Materials to be inspected once they
have been put into warehouse.
5.2
5.2 Material acceptance and inbound operation
1) AALRT
1) Production materials purchased by AALRT
AALRT
See AALRT Material Acceptance Management Method for details.
2)
2) Spare parts transferred according to construction engineering contract.
EPC
See EPC contract for details.
5.3
5.3 First-in-first-out management of materials
5.3.1 AALRT

5.3.1 Acceptors or keepers shall follow the principle of first-in-first-out for material inbound operation or
dispatching, so as to prevent materials from deformation, decoloring, deterioration or performance
failure due to expiration and further result in property loss of AALRT.
5.3.2

5.3.2 Identify first-in-first-out materials according to month color tags or print the material with specific
inbound time with tag gun. A color stands for a quarter. First-in-first-out materials are differentiated by
following colors:

st

nd

rd

White (1 quarter) Yellow (2 quarter) Green (3 quarter)

Red (4th quarter)

5.3.3

5.3.3 For inbound materials, the inbound acceptor shall change the date on tag gun in appropriate color
and print on the package with specific inbound time with tag gun.
5.3.4
5.3.4 For materials of inbound canceling, the inbound acceptor shall print blank tag in appropriate color
according to inbound canceling time.
5.3.5 C
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5.3.5 When dispatching materials, the outbound inventory keeper shall follow the principle of first-infirst-out as indicated on tag. And fill strictly in the outbound list (see the appendix C).
5.3.6
5.3.6 After production materials to be returned are inbound, the outbound inventory keeper shall give
priority to such materials when sending materials next time.
5.4
5.4 Material storage and keeping
5.4.1
5.4.1 Keep materials by type, divide storage area and make goods allocation code.
5.4.2
5.4.2 Sort out materials by type, property, volume, weight, liquidity and storage area, draw a
configuration figure and place it at places easy to see.
5.4.3
5.4.3 Divide channels in warehouses, do not place goods susceptible to humidity directly on the floor
and place them on racks or rebase with plate instead.
5.4.4

5.4.4 Keep materials clean and specify storage conditions. For warehouses demanding certain
temperature and humidity, keep temperature and humidity at required level to prevent damage or
deterioration of materials.
1) 45-75%RH 25+10
( A)
1) The humidity shall be kept within 45-75%RH in general and temperature shall be kept at 25 +10.
Record actual temperature and humidity in the morning and afternoon everyday in Temperature and
Humidity Record Form (Annex A) and confirm the temperature and humidity changes in warehouses.
2) 75%RH
2) If humidity is above 75%RH, Warehousing Management staffs should conduct as follows to prevent
quality changes to materials.
a)
a) For warehouses with constant temperature and humidity, check if all windows and doors around
have been closed to allow optimal air conditioning or reset the air conditioner.
b)
b) For warehouses with non-constant temperature and humidity, observe the ventilation conditions of
warehouses or reset the dehumidifier.
5.4.5 ,,,

Ensure the inventory materials can conduct perform properly, make a list of goods which are
necessary for detection by application organizations and detect in a regular manner as required.
5.5
5.5 Emergency reception (borrowing)
5.5.1 AALRT C

5.5.1 If AALRT user has to lend out production materials for emergency use, the borrower has to fill in
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Outbound Note of Materials Lent Out (see Annex C). After reviewed by the discipline engineer of
borrower as well as by the Manager of Material Division, the borrower is allowed to go through
procedures; if borrowing at night or on holiday, the borrower is allowed to go through procedures after
the user reviewed on production dispatching.
5.5.2 AALRT AALRT

5.5.2 If organizations not controlled by AALRT intend to borrow production materials, the borrower shall
fill in Outbound Note of Materials Lent Out and is allowed to go through procedures after reviewed by
AALRT leaders.
5.5.3
5.5.3 The warehouse keeper shall check the Outbound Note of Materials Lent Out before handling
procedures and both parties shall sign on the Note.
5.5.4 AALRT
5.5.4 If departments controlled by AALRT borrowed materials, they shall go through transfer procedures
in a timely manner.
5.5.5 AALRT
5.5.5 When organizations not controlled by AALRT return materials, conduct acceptance as required by
inbound procedure.
5.5.6 AALRTS EPC

<> D
5.5.6 AALRTS for use of other units of materials, supplies, division, can be in accordance with the
requirements of the company and material requirements planning, to the EPC contract project owner to
borrow the required materials, and issue a material borrow listing.After being company material
purchasing back, again according to borrow the listing number for the return of the other and back to
borrow list. Please refer to the appendix D for < supplies to borrow list >
5.6
5.6 Return management
5.6.1

5.6.1 If any unqualified materials are found during acceptance, the inbound acceptor shall place such
material at specific zone and ask purchaser to notify supplier for replacement.
5.6.2 ,
5.6.2 If the inventory materials or production materials cancelled from warehouse are found quality
problems within shelf life.
1) ,
1) The warehouse keeper shall place such material at specific zone, make signs and notify supplier and
purchaser.
2)
2) The inbound acceptor or purchaser shall contact supplier and ask for replacement.
3)
3) Upon new arrival, the inbound acceptor shall receive materials following material reception
procedure, issue release pass and return old materials.
5.7
5.7 Warehouse counting
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5.7.1
5.7.1 Cycle counting and key material counting:
1
1) Cycle counting
15 711 20%

Cycle counting is conducted from January to May and July to November in each year. Conduct cycle
counting by different material types monthly, with cycle counting rate as about 20% and one-round
counting half a year. The warehousing keepers are responsible for conducting cycle counting.
2
2) Key material counting
6 12 *
85% AALRT

Key material counting is conducted in June and December each year. Make counting on inventory
amounts which are obtained through multiplying inventory quantities by unit price, sort amounts from
high to low and identify material types of which the total amounts accounting for 85% or below of total
inventory amounts; the Material Division and AALRT Finance and Administration Department shall
conduct key material counting together.
5.7.2
5.7.2 Before counting, the Material Division shall make counting plan in advance and confirm counting
method, plan and staffs.
5.7.3

5.7.3 The warehouse keeping office of Material Division shall prepare counting form and the counting
staff shall make counting on inventory materials according to counting items. If any counting difference
occurs, the counting staff shall verify again.
5.7.4

5.7.4 While counting is completed, the Material Division shall organize summing-up meeting, figure out
causes to problems found during counting and propose disposal measures. How to dispose counting
differences: report for approval to calculate the loss into account for short-term natural losses; figure out
causes for excessiveness or shortage and find out who is to blame and demand compensation if such
profit, loss or damage is caused due to improper keeping, dereliction of duty.
5.7.5
AALRT
5.7.5 The warehouse keeper of Material Division shall prepare counting report according to counting
form and submit to the Manager for approval and review; prepare counting report on key materials and
submit to the Manager and the Head of Finance and Administration Department for approval and review
together.
5.8
5.8 Analysis of warehouse inventory

The Material Division shall establish inventory analysis index for warehouse inventory, make analysis
statement every half year, report to relevant departments, reflect underlying problems of inventory and
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propose solutions.
5.8.1
5.8.1 Analysis of inventory age

The warehouse keeper shall make analysis on materials deposited within period required by parent
department and propose solutions.
5.8.2
5.8.2 Analysis of inventory material turnover rate

The warehouse keeper shall analyze the inventory material turnover rate and times.
5.8.3
5.8.3 Analysis of inactive materials

AALRT
The warehouse keeper shall make a list of materials which have not been put into use for long time
(above 5 years) and issue the list to original report department to confirm; for materials which can not
put into further use, the original report department shall give explanations, propose disposal measures
and report within AALRT.
5.8.4
5.8.4 Analysis of material usability

The warehouse keeper shall analyze inventory materials which exceed shelf life as well as the causes
of failure and propose disposal measures.
5.8.5
5.8.5 Analysis of outbound material for reception

The warehouse keeper shall make statistics of outbound frequencies, times and amounts of key
materials and provide useful data to optimize procurement plan and facilitate reasonable arrangement
of procurement capital.
5.9
5.9 Safety management of warehouse
AALRT
The Material Division shall conduct safety management under the guidance of Security Department.
See AALRT Safety Management Rules of Warehouse for details.

7.
7. Supplementary Provisions
7.1
7.1 The Material Division reserves the right to explain, modify and revise the Method.
7.2
7.2 Annexes to the Method
A
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Annex A: Warehouse Temperature and Humidity Record Form
B
Annex B: Outbound Note of Materials Lent Out
C
Annex C: Outbound List of Materials
D
Annex C: Borrow List of Material

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A
Annex A:
E/AALRT 0047-01-B1

Warehouse Temperature and Humidity Record Form

Warehouse:
Item
Date

Temperature

Morning

Afternoon

Humidity

Morning

Afternoon

Checked
By

Remarks

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

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MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

MM-DD

B
Annex B
E/AALRT 0047-02-B1

Outbound Note of Materials Lent Out

NO

Material issuing warehouse:

MM-DD-YYYY

Borrower

Serial
No.

Expected
Return
Date

Material Code

/
Material
Specification

Name/ Unit

Quantity

Application

1
2

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Received by: Reviewed and approved by:

Reviewed by:

Issued by:

The note is made in duplicate and kept by Production Department and Material Department
respectively.

C
Annex C:
AALRT
AALRT outbound List
E/AALRT 0047-03-B1
Record No.: E/AALRT 0047-03-B1

Warehouse No

outbound
Document No.

Materials unit Name

Serial
No.

Material
Code

Name of
Materials

outbound
Date

Materials use

Specifications
and Models

Unit

Quantity

Unit
Price

Amount
(Yuan)

Goods Position

1
2
3

Total

Remarks

Materials
manager

Warehouse
keeper

Picking
member

,
The note is made in duplicate and kept by Production Department and Material Department
respectively and Finance and Administration Department.

D
Annex D: Borrow List of Material

Borrow List of Materials

AALRTS
Organization Unit: Material Department of AALRT Maintenance Centre
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NS

Name

Type

Unit

Quantit
y

unitprice

sum

Remark

Total

EPC Handover Principal of EPC Construction Party

AALRTS Received by AALRT Material Department
AALRTS Both two sides of AA LRT Material Managers:
Received Date:
EPC
The note is made in duplicate and kept by Construction Department of EPC Contract and Material
Department respectively.

Warehousing Management Method

Prepared
by

SN

Standard name

Revision

/
Preparatio
n/Revision

Liu
Jinxiang

2015.08.30
Date:
August 30,
2015

Prepared/R
evised by

Issued on

Standard history tracking

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