Reconciliation of Materials (Part-2)

Dear Readers,
This is continuation of previous post

• Wastage / Savings

o  Theoretical Consumption – Actual Consumption

• Percentage of wastage

o  Wastage / Theoretical consumption X 100

• Theoretical Consumption

o  Billable

•  Claimed from clients

•  Work in progress

o  Non Billable

•  Temporary structure

•  Enabling works

•  Due to drawing revision not useable

•  Laps, Chairs and Spacers

•  Splices and Lifting lugs

Actual Consumption = Total Receipt – Total Issue

Receipt

o  Purchases thru’ region / Head Office

o  Local purchases

o  Receipts from other sites

o  Receipts from other Agencies

o  Clients supply

Issues and Stocks

o  Physical stock (Including Cut Bits (Useable))

o  Issued to other sites

o  Issued to clients

o  Issued on chargeable basis

•  Interpretation

o  If Result is (- )ve means it is wastage

o  If Result is (+)ve means Savings

o  Results shall be compare with contractual limits

•Advantage of Material Reconciliation

o  To Minimize the wastage

o  Salvage of wastage / Scraps

o  For better planning on Material procurement

o  It is a Contractual Obligation