1. 1 Discrepancy/Deficiency Reporting Functional Review Ellen Hilert, DoD SDR Administrator April 28, 2015  Supply Discrepancy Report (SDR)  Product Quality Deficiency Report (PQDR)  Stock Screening Request  Storage Quality Control Report (SQCR)

2. 2 Discrepancy/Deficiency Reporting Functional Review Year-in-Review  Overview  Metrics  Component System Interfaces with WebSDR  DLMS Changes: ADCs, PDCs, and under development  SDR  PQDR  Stock Screening  SQCR  DCMA Black Belt Project – Supporting DLMS Changes  DoD Initiatives impacting SDR process  SDR Implementation Calls  DLA/Service Suspended Asset IPTs  DLMSO Day-to-Day SDR Support

3. 3 Discrepancy/Deficiency Reporting Functional Review What is DoD WebSDR? A Web supported tool integrating business events to: Report supply discrepancies and route for action Provide appropriate SDR responses and resolution Standardize SDR transactional interfaces and data Capture & provide a life-cycle event audit trail Provide management information for analysis Integrates Component SDR applications as required by the Defense Logistics Management Standards (DLMS) Supports Web input pending DLMS implementation Database of all actions producing reports View management reports/query results online, or Sends reports to user’s email for detailed analysis

4. 4 Discrepancy/Deficiency Reporting Functional Review What is DoD WebSDR? Use of the DLMS interface for SDR transaction exchange is required under DoD Supply Chain Materiel Management Manual (DoDM 4140.01) Procedures are maintained in Defense Logistics Manual (DLM) 4000.25, Volume 2, Chapter 17, Supply Discrepancy Reporting The DLA Transaction Services implements the WebSDR procedures, hosts the database, and prepares reports

5. 5 Discrepancy/Deficiency Reporting Functional Review Why DoD WebSDR? The SDR transformation initiative was designed to move SDRs into an integrated electronic transactional environment within the framework of a standard logistics information exchange. The goal is to provide an effective means to report, resolve, and measure discrepancies related to pipeline performance while reducing paper and manual intervention. The derivative benefits of the initiative include: near real time SDR reporting for immediate identification and more speedy resolution of reported discrepancies; enabling Perfect Order Fulfillment computations; facilitating of interoperability internal and external to DoD; and maximizing the economy, efficiency, effectiveness of the reporting process. WebSDR architecture is based upon a DLA Transaction Services hub for communication and centralized data management Eliminates the need for numerous point-to-point communications links Transaction driven process eliminates the need to re-key SDRs within separate Component systems Developed as a DLMS-compliant process Allows phased development - continuous process improvement since initial operating capability Feb 2005

6. 6 Discrepancy/Deficiency Reporting Functional Review SDR Basic Purpose A SDR is a tool used to report shipping or packaging discrepancies attributable to the responsibility of the shipper, (including Government sources, contractors/ manufacturers or vendors) and to provide appropriate responses and resolution. Shipping discrepancies include: Discrepant condition of item, including expired shelf-life Overage/shortage/total non-receipt Discrepant unique item identification Improper documentation (inclusive of transportation-related documentation) Misdirected shipments Packaging discrepancies include: Improper packing Improper preservation Improper marking Improper unitization Detailed discrepancy codes are available to support better understanding of the discrepant condition and follow-up analysis.

7. 7 Discrepancy/Deficiency Reporting Functional Review SDR Program The supply discrepancy reporting program is designed to promote evaluation, correction, and improvement of logistics operations. To assist DoD Components in their SDR quality programs that will include periodic reviews to assess the accuracy and quality of work processes applicable to supply discrepancy processing. Data collected enables DOD Components to: Identify trends Establish volume and dollar values of SDRs Bring management attention to problems with shipping activities as necessary Improves the requisitioning and distribution process within logistics operations Official SDR guidance is Defense Logistics Manual (DLM) 4000.25, Vol II, Chapter 17 at URL: http://www.dla.mil/j-6/dlmso/elibrary/manuals/dlms/v2.asp

8. 8 Discrepancy/Deficiency Reporting Functional Review DoD Supply Chain Materiel Management Procedures DoD 4140.01-M “Storage activities will conduct physical inventories, initiate and conduct causative research, and prepare supply discrepancy reports or storage quality control reports; resolve inventory discrepancies; investigate and assess liability for loss, damage, and destruction of government property; and take applicable actions necessary to ensure that the physical on-hand quantity equals the total item property record quantity. Inquiries and audits of physical inventory discrepancies will be directed to the storage activity maintaining physical custody.” “For receipt inspection, acceptance, and discrepancy reporting, DoD Components will: (1) Perform inspection and acceptance at destination as part of the receiving process when receiving shipments of materiel from commercial sources that require the inspection and acceptance. (2) Reflect the actual condition of the materiel received in materiel receipt transactions based on screening or inspection. (3) Reflect the quantity accepted from commercial sources for financial system interfaces and capture UII, when applicable, in the materiel acceptance transactions. (4) Report all discrepant receipts in accordance with established DoD issuances cited in paragraph 8i of this enclosure covering supply, transportation, or quality discrepancies. Design supply systems to report supply discrepancies as an integral and seamless part of the receiving process. (5) Establish a capability to automatically receive deficiency reports, store and process (e.g., categorize, sort, and access related deficiencies), assign investigations, and automatically route and track disposition in each DoD activity responsible for resolving discrepancy reports.”

9. 9 Discrepancy/Deficiency Reporting Functional Review SDR Metrics for March, 2015 (April, 2014) Monthly Total Transactions: 116,697 (83,131) Daily Average: 3,764 (2,771) New SDRs: 36,454 (25,184) Customer Receipt-DVD (Type 6): 1,125 (1,012) Customer Receipt (Type 7): 21,150 (17,133) Distribution Center Receipt (Type 8): 55,575 (37,644) Distribution Ctr Receipt-Procurement Source (Type 9): 30,636 (22,519) Storage Activity Receipt (Type A): 70 (26) Storage Activity Receipt-Redistribution (Type N): 172 (193) Storage Activity Receipt-Procurement Source (Type P): 42 (27) Distribution Center Receipt-Redistribution (Type R): 6,143 (2,972) Customer Receipt-Lateral Redistribution (Type V): 112 (303)

10. 10 Discrepancy/Deficiency Reporting Functional Review SDR Metrics – March 2015 (April, 2014) Transshipper (Type W): 947 (787) DLA Disposition Services Field Office originated (Type D): 725 (574) Cancellations: 588 (519) Reconsideration Requests: 593 (560) Information Copies: 36 (133) Historicals: 1,094 (999) Follow-ups: 4,913 (6,307) Corrections: 2,324 ( 1,869) Replies: 43,415 (30,583) International Logistics Control Office (ILCO) Rejection: 23 (32) Storage Activity Completion Notice: 26,613 (16,784) Status Update: 644 (161)

11. 11 Discrepancy/Deficiency Reporting Functional Review SCES Security Cooperation Enterprise Solution SDR Information Exchange Integrating Component SDR Applications Defense Automatic Addressing System (DAAS) Master Repository Translation Processing DLA Enterprise Business System (EBS ) 842 Distribution Standard System (DSS) ----------- Incoming Supply Discrepancy Report (ISDR) ----------- Automated Discrepancy Reporting System (ADRS) * DoD WebSDR Customers Product Deficiency Reporting and Evaluation Program (PDREP) SDR (Navy Wide/USMC) Army Logistics Modernization Program (LMP) 842 Air Force Security Assistance Command (AFSAC) (SDR-A) 842 E-mail On-Line AF Enterprise Solution-Supply (ES-S) SDR * (Retail level only) 842 XML GSA Vision Interface * Integrated receiving & SDR functionality 842 XML 842 Army Information Systems Security Program (ISSP) *

12. 12 Discrepancy/Deficiency Reporting Functional Review GSA DLMS WebSDR Interface Phase I implemented January 27, 2014 This interface required upgrading the WebSDR to support multiple versions of the XML – ultimately, both GSA and the Air Force retail systems were upgraded to same version Phase I Incoming SDRs, corrections, follow-ups, cancellations, requests for reconsideration, and 2 nd FMS request for reconsideration Attachment functionality Outgoing GSA replies Phase II Incoming reply transactions: forwarding actions, ILCO rejection notices, completion notices, storage activity replies Requirements clarification underway

13. 13 Discrepancy/Deficiency Reporting Functional Review Army DLMS WebSDR Interface Army Logistics Modernization Program (LMP) implemented October 2014: Army ICPs (AKZ, A12, A35, B14, B16, B17, B46, B64, B69) Non-Army Managed Item (NAMI) ICP (AJ2) Previous Army SDR application supported a one-way non-DLMS transaction for new SDRs only. All other transmissions require email to the action activity. No WebSDR visibility of Army replies. Phase I Incoming SDRs, corrections, follow-ups, cancellations, requests for reconsideration, and 2 nd FMS request for reconsideration Outgoing Army replies Phase II Incoming reply transactions to LMP: forwarding actions, ILCO rejection notices, completion notices Attachment functionality

14. 14 Discrepancy/Deficiency Reporting Functional Review Army DLMS WebSDR Interface Information Systems Security Program Application (ISSPA): COMSEC is developing the new system as a tool for G8 to monitor and approve distribution of COMSEC material to only those authorized for use. As part of the development of the ISSPA, COMSEC would like to include the SDR functionality to streamline their SDR submission process from swivel chair (WebSDR) to integrated with the supply system and receiving process.

15. 15 Discrepancy/Deficiency Reporting Functional Review Security Assistance Enterprise System (SCES) Interface Currently, only Air Force ILCO is supported by a Component SDR application (SDR-A) Original plan was for expansion of SDR-A via FMS portal to other ILCOs – long-term goal still incorporates incorporating functionality/programming logic from SDR-A within SCES Phase I SCES interface will support Navy ILCO for initial implementation with limited functionality/not all FMS data content Awaiting PDC to clarify business rules

16. 16 Discrepancy/Deficiency Reporting Functional Review ADC 1007C (July 31, 2014) Code Updates to the DLMS 842P PQDR Data Exchange: This change documents new and revised codes for use in processing PQDR and updates the DLMS IC 842P Significant Changes/impacts: Ensures common understanding of the data mapping for development of system interfaces Establishes the DLMS as the authoritative code source for selected PQDR- related data elements allowing for quicker turn-around for updates Provides and updates definitions, characteristics, and applicable code values and/or code sources for the following data elements: - PQDR status codes - Materiel disposition codes - New rebuttal codes- Operating time at failure codes - Updated credit codes- Time since installation codes - Exhibit accounted for/received codes- Time since new/overhaul codes - Standard Carrier Alpha Codes (SCAC) for the exhibit carrier - Exhibit delivery requirement codes (previously known as exhibit required/ requested/hold code)

17. 17 Discrepancy/Deficiency Reporting Functional Review ADC 1007D (under development) Code Updates to the DLMS 842P PQDR Data Exchange: This PDC documents business rules for inter-service/agency data exchange regarding when PQDR transactions are required and/or permitted at any point during the lifecycle of a PQDR. It also defines who may update a given data element for inter-service processed PQDRs. Significant Changes/impacts: Provides a table that defines which data elements (and when those data elements) may or may not be updated by inter-service PQDR processing personnel. Updates data element content in 842P: additional codes, revised field lengths, some elements removed. Updates implementation target to November 2016.

18. 18 Discrepancy/Deficiency Reporting Functional Review PDC 1045 (April 1, 2015) Revise the DLMS Stock Screening Request and SQCR Submission and Associated Replies to Add Capability for Transmission via New WebSSR and WebSQCR Applications: This change enhances the functionality of the DLMS transaction exchange and establishes two new Web-supported applications for submission and response to Stock Screening Requests and SQCRs. The Web processing will be similar to WebSDR. Significant Changes/Impacts: Currently, DLMS transactions are only exchanged between the DLA ICP (EBS) and DLA Distribution Centers (DSS). Manually intensive procedures are required to support the Services. The existing Stock Screening Request (842C/I), Stock Screening Reply (842C/R), SQCR (842S/Q), and SQCR Reply (842S/R) transactions will be updated with new and revised data content The PDC lays out all the functional requirements for the new Web process including mock-ups for all screens, all email communications, and the database requirements This change will also enhance communication of SQCR information between the ICP and storage activity by allowing interim reply capabilities, defining suspense requirements based upon the type of inspection required, and incorporating storage location and IUID

19. 19 Discrepancy/Deficiency Reporting Functional Review SQCR triggered by Stock Screening Request

20. 20 Discrepancy/Deficiency Reporting Functional Review SQCR not triggered by Stock Screening Request

21. 21 Discrepancy/Deficiency Reporting Functional Review ADC 1066 (Jan 9, 2014) SDR Process Enhancements: This change provides enhancements for SDR follow-ups, SDR forwarding, Source of Supply (SoS) notification; Establishes the use of the Unique Item Tracking (UIT) Designator code for management reports, and the Discrepancy Code D4 for missing Quality Assurance Rep (QAR) Signature. Significant Changes/Impacts: Clarifies procedures and time standards for submission of SDR follow-ups Provides Business rules for DLA Distribution Centers forwarding SDRs to the SoS and associated reply codes Revises WebSDR business rules to provide SDR corrections, not a second original SDR, to the SoS when an information copy is generated by WebSDR after forwarding an SDR to a new action activity subsequent to Reply Code 504 Designates a Discrepancy Code D4 and associated procedures specifically for reporting of procurement source materiel that is suspended upon receipt due to lack of a QAR signature Establishes an interface with the DLA Logistics Information Services Master Data Capability (MDC) to retrieve the UIT designator code for discrepant item NSNs to support user selection criteria for Small Arms/Light Weapons management reports

22. 22 Discrepancy/Deficiency Reporting Functional Review PDC 1066A (April 14, 2015) SDR Process Enhancements: This proposed addendum enhances DoD WebSDR processing to enable SoS systems to properly process transactions used for SoS notification of relevant SDR information. Two new rules for WebSDR processing are established. Significant Changes/Impacts: WebSDR will be required to suppress the distribution copy of the SDR reply prepared when an SDR is forwarded to a new action activity (which is other than the SoS) via Reply Code 504 (SDR forwarded to new action activity). Instead, the SoS will receive a transaction containing the new action activity so that the existing SDR record can be updated. Upon processing a change to the SoS RIC reflected in action activity SDR reply transaction, WebSDR will be required to perform an edit check to determine if the new SoS has already received an information copy of the SDR. If not, WebSDR we send an information copy to the new SoS. This will allow any subsequent transactions to process successfully.

23. 23 Discrepancy/Deficiency Reporting Functional Review

24. 24 Discrepancy/Deficiency Reporting Functional Review

25. 25 Discrepancy/Deficiency Reporting Functional Review PDC 1084 (under development) New Procedures for Reporting and Obtaining Disposition/Financial Resolution for Non-Manager-Owned Suspended Stock Stored in DLA Distribution Locations: This change establishes procedures for return of non-compliant suspended stock to the manager with appropriate reimbursement to the current owner under the Stock Readiness Program. This process is applicable when a manager-initiated stock screening request results in identification of non-compliant/suspected non-compliant materiel. Significant Changes/Impacts: Leverages existing and planned enhancements under PDC 1045 procedures for stock screening, SQCR, and materiel release order (MRO) to recognize, suspend, provide notification of suspected non-conforming materiel and, ultimately, provide disposition and credit (when applicable) to the materiel New business rules direct the SQCR to the manager while providing an information copy to the owner. Once all parties are identified, WebSQCR will ensure all parties receive all follow-on transactions. Eliminates requirements for the current owner to prepare SDR or PQDR to obtain credit and disposition instructions

26. 26 Discrepancy/Deficiency Reporting Functional Review

27. 27 Discrepancy/Deficiency Reporting Functional Review ADC 1091 (Jan 28, 2014) SDRs Requesting Replacement or Expedited Shipment: This change expands/updates MILSTRIP and SDR guidance for reshipment of materiel subsequent to a validated SDR. Significant Changes/Impacts: Removes restriction preventing Foreign Military Sales (FMS) customers from requesting a replacement shipment using SDR Action Code 1F on SDR submissions Updates the SDR guidance to clarify that customers requesting expedited transportation using SDR Action Code 1D (non-FMS customers only) are authorizing the use of premium transportation Provides SDR and MILSTRIP guidance for processing SDRs and directing reshipment Only the SoS can authorize a replacement shipment. The shipping activity will validate supply discrepancies and transfer the SDR to the SoS using the applicable 300-series reply code. The SoS will retain the option to refuse replacement shipment; this will be communicated using SDR Reply Code 126 (Stock not available or will not be reshipped in response to SDR). Reshipment procedures require suffixing of the original document number to separately track and bill the reshipment. Use of the suffix/next higher suffix code will avoid assignment of a duplicate transportation control number (TCN).

28. 28 Discrepancy/Deficiency Reporting Functional Review ADC 1095 (May 29, 2014) Enhanced Guidance for Submitting SDRs for IUID Discrepancies: This change provides amplifying guidance for the preparation of SDRs for data discrepancies for serially-managed or tracked materiel Significant Changes/Impacts: Standardizes use of SDR discrepancy codes for discrepancies involving serially- managed/tracked materiel resulting in mismatched/missing UIIs or serial numbers. It will better align the Component’s usage of U-series discrepancy codes with the expectations under DOD Supply Policy Revises DLMS SDR guidance to clarify appropriate reporting and improve visibility of SDRs associated with noncompliant shipments of serially-managed/tracked materiel Enhances management report selection criteria to allow for selection of IUID-related discrepancies by allowing for their selection as a group, including all U-series discrepancies minus the U11 category (materiel unidentifiable - not specifically related to IUID) Provides more accurate reporting and data collection of IUID-related discrepancies using the WebSDR tool set Requires Component integrated system interface to obtain the IUID Indicator in order to prompt users for inclusion of UII and/or serial number when submitting SDRs for shortage, overage, or wrong item receipt of IUID-required items.

29. 29 Discrepancy/Deficiency Reporting Functional Review ADC 1102 (June 5, 2014) Enhanced SDR Guidance and Administrative Updates: This change enhances SDR Routing for Army-Directed DLA Distribution Center Shipments, provides MILSTRAP and SDR procedures for unauthorized return of consumable materiel, and includes administrative updates to the SDR transaction format and discrepancy code list as a corrective action for identified gaps in data transmission Significant Changes/impacts: Establishes specific guidance to report DLA Distribution Center receipts and SDRs for unauthorized consumable item returns to the returning Service, using a pre-designated RIC, rather than the item manager Applicable to Navy and Marine Corps returns that lack a PMR or documentation clearly identifying the owner. Not applicable to procurement source receipts or reparables, which must be received under MILSTRAP (existing procedures.) Revises WebSDR routing rules to require distribution of an information copy to the DLA Distribution Center when the shipment was directed by the Army and the materiel was shipped from the Distribution Center Expands use of reply codes restricted to DLA Distribution Centers to other storage activities and clarifies requirement for WebSDR capability for Web-prepared creation of a completion notice and status update

30. 30 Discrepancy/Deficiency Reporting Functional Review ADC 1102A (April 13, 2015) Procedures for Unauthorized/Discrepant Returns: This change expands ADC 1102 procedures for the use of a pre- designated owner RIC for consumable item returns to the Air Force. Significant Changes/impacts: DLA distribution center will report receipt/SDR for unauthorized returns (no PMR/incomplete or missing documentation with no identified owner) for consumable items by Air Force activities to the Air Force using RIC FHZ (Tinker AFB, OK).

31. 31 Discrepancy/Deficiency Reporting Functional Review ADC 1126 (Dec 2014/corrected Jan 2015) New Procedures for Reporting and Obtaining Disposition/Financial Resolution for Non-Manager-Owned Suspended Stock Identified at Time of Receipt at DLA Distribution Locations: This change revises procedures for processing “receipt notification” SDRs for materiel suspended upon receipt based upon manager-provided criteria (e.g. receipt restriction after stock screening action). Significant Changes/Impacts: New business rules direct the SDR to the manager while providing an information copy to the owner. Establishes separate data fields for owner and manager Applicable to: Q22New procurement receipt, customer return, redistribution order, or stock screen item quality deficiency, contractual non-compliance, including specification and/or technical data deficiency Q33Returned, redistribution order, or stock screened item suspected materiel deficiency (DLA Customer Returns Improvement Initiative (CRII) items only) Q55Item under investigation Q66Customer return or stock screen item failed under use Q77New procurement receipt, customer return, or redistribution order receipt of stock screen item identified as a suspected critical safety item (CSI) discrepancy

32. 32 Discrepancy/Deficiency Reporting Functional Review ADC 1126 (continued) New Procedures for Reporting and Obtaining Disposition/Financial Resolution for Non-Manager-Owned Suspended Stock Identified at Time of Receipt at DLA Distribution Locations: Significant Changes/Impacts: Adds a new SDR Action Code: 4A, Owner notification for suspended stock due to Manager-initiated screening; Disposition instructions requested from Item Manager (no action by owner pending manager response) Allows manager to provide disposition (e.g. return of materiel to the manager) and financial resolution without double SDR reporting currently used:  Initial receipt notification SDR to owner  Second SDR from owner to manager requesting disposition/credit

33. 33 Discrepancy/Deficiency Reporting Functional Review

34. 34 Discrepancy/Deficiency Reporting Functional Review ADC 1127 (October 30, 2014) Enhanced SDR Guidance and Administrative Updates: This change is a collection of various unrelated procedure updates Significant Changes/Impacts: Establishes forwarding procedures by the losing item manager (LIM) to the gaining item manager (GIM) subsequent to a logistics reassignment (LR) o If disposition instructions are needed, LIM uses Reply Code 506 and applicable 300-series forwarding reply code. WebSDR to send information copy of original report to GIM. o Requires system change by GIM to accept document number. Update the time standards for SDRs associated with materiel classified secret and above, and nuclear weapons-related materiel (NWRM) to require accelerated response. o At a minimum, action activities must recognize and provide an interim reply with interim Reply Code 103 (receipt acknowledgment) within 24 hours. The interim SDR remarks must affirm that appropriate attention to this SDR is underway and that a comprehensive response will be provided. A comprehensive response must be provided within 15 business days (includes shipping activity and the SoS). o Internal Component processing rules must be established to ensure the SDR is prioritized for speedy research and resolution. o Applicable to: shortage, overage, wrong item, mismatch of UII/serial number for serially managed/tracked materiel, or receipt of a misdirected shipment with Controlled Inventory Item Codes (CIICs): E, F, G, H, K, L, O, S, T, W, and 5.

35. 35 Discrepancy/Deficiency Reporting Functional Review ADC 1127 (continued) Significant Changes/Impacts: Clarifies procedures for routing of packaging discrepancy SDRs resulting from redistribution of stock between storage activities. Updates procedures for submission of information only (vice action) SDRs for packaging discrepancies below a specified dollar threshold where repackaging can be provided by the DLA distribution center. o The distribution center will perform corrective action without authorization based upon Stock Readiness agreement - SDR will be provided to the owner for information only:  DLA: must have PMR, no item discrepancy, secondary item, cost to correct less than $300, or $500 for clothing and textile commodities  Services: packaging discrepancy, no item discrepancies, secondary item, and the cost to correct the packaging less than $300, Revise business rules associated with resubmission of an SDR after customer cancellation of the original submission or storage activity completion notice. o Component SDR applications and WebSDR must be modified to allow SDR corrections to be used to reopen a previously cancelled/completed SDR by citing Discrepancy Code Z6.

36. 36 Discrepancy/Deficiency Reporting Functional Review ADC 1127 (continued) Significant Changes/Impacts: Eliminates DLM exclusion for SDR reporting by activities using non- appropriated funds (e.g. the Exchange, Navy Exchange, and Marine Corps Exchange) Clarifies file naming requirements for SDR attachments, e.g., specifically identifying reserved characters Updates the list of special characters that can be used in SDR remarks. Incorporates Supply Chain Management policy for receipt processing, which directs Components to design supply systems to report supply discrepancies as an integral and seamless part of the receiving process.

37. 37 Discrepancy/Deficiency Reporting Functional Review ADC 1127 (continued) Significant Changes/Impacts: Incorporate clarifications to FMS procedures as published in SAMM policy update DSCA 14-10 Removes the FMS restriction on using Z2 (repetitive discrepancy) Document WebSDR procedures associated with historical SDRs. Specifies the allowable number of ILCO rejections allowed per SDR

38. 38 Discrepancy/Deficiency Reporting Functional Review ADC 1127A (under development) Miscellaneous Enhancements: Document various “smaller” changes needed to improve data quality and support user community. Modifies guidance for restricted special characters. Goal is to use special processing rules within WebSDR to allow transactions to process successfully. Significant Changes/Impacts: DoD e-mail addresses now using restricted characters: ampersand (&) and apostrophe (‘), resulting in transaction failures. X12 EDI systems can handle these characters, but applications using XML cannot. Potential plan to mediate the problem: o WebSDR to allow use of ampersand and apostrophe o Web will scan outgoing transactions going to Component systems using XML for special characters.  If used in remarks text, ampersand will be replaced by a plus sign and apostrophe will be replaced by a comma  If used in email address, the name of the character will be spelled out.

39. 39 Discrepancy/Deficiency Reporting Functional Review ADC 1127A (continued) Significant Changes/Impacts: Add local stock number (LSN) as acceptable form of materiel identification for direct Web input (already allowed via transactions) Add Web edit to block use of Action Code 3A (frustrated freight at port) by submitting activities other than transshippers Modify selection criteria for Transhipper Management Reports to use Document Type Code W (transshipper) to exclude other types of submitting activities Develop forwarding business rules and automated support for wrong item SDRs where the manager of the wrong item is other than the intended SoS

40. 40 Discrepancy/Deficiency Reporting Functional Review ADC 1153 (April 16, 2015) Enhanced SDR Guidance and Administrative Updates: This change includes three enhancements to improve visibility of discrepancies involving hazardous materiel shipments and clarifies guidance for the selection of the appropriate SDR action code by transshippers. Significant Changes/Impacts: Mandatory requirement for use of four-character transportation- related documentation discrepancy codes on SDRs. Establishes new transportation-related documentation discrepancy codes Establishes a new data field to identify hazardous materiel shipments. (to be required input for transshippers) Guidance is updated to specifically state that transshippers are authorized to use the SDR for reporting of both packaging and documentation discrepancies while materiel is in transit.

41. 41 Discrepancy/Deficiency Reporting Functional Review ADC 1153 (continued) Existing D5 Discrepancy Code series: D501Special Handling Data/Certification, DD Form 1387-2, omitted D502Special Handling Data/Certification, DD Form 1387-2, incomplete or incorrect D503TCMD, DD Form 1384, omitted D504TCMD, DD Form 1384, incomplete or incorrect D505Shipper's Declaration for Dangerous Goods omitted D506Shipper's Declaration for Dangerous Goods incomplete (including incomplete item description) New discrepancy codes: D507Shipper's Declaration for Dangerous Goods not appropriate for transportation mode D508Department of Transportation Special Permit (DOT-SP) omitted D509Competent Authority Approvals (CAA) omitted D510Certificate of Equivalency (COE) omitted D511 Inert certification omitted D512 Drained and Purge Certificate/AFTO Form 20 omitted D513 Explosives Classification Approval (CA) (EX-Letter) omitted D599 Transportation-related documentation discrepancy (not identified by other code). See remarks.

42. 42 Discrepancy/Deficiency Reporting Functional Review PDC 1160 (under development) Procedures for Recommending and Authorizing Credit for Validated SDRs, Associated Reply Code Revisions, and DLMS Enhancement for Expanded use of the Reason for Reversal Code in Issue Reversals: Document use of issue reversal for generation of credit in response to DLA audit team concern for current practice. Goal is to provide clear audit history while not negatively impacting the requiring Service system (allowing it to reset original demand with all associated data) Significant Changes/Impacts: Updates available SDR reply codes to separate the storage activity’s recommendation for financial action from the SoS’s reply to the customer indicating that an adjustment is being provided. The updated reply codes will discretely identify when credit is provided by reversal of the original issue. Updates MILSTRAP guidance with procedures supporting use of the issue reversal transaction. Establishes a requirement to include an issue reversal reason code for all Components as a DLMS enhancement and expands the scope of available codes beyond those currently used by DLA distribution centers in support of a Navy-unique requirement.

43. 43 Discrepancy/Deficiency Reporting Functional Review PDC 1164 (March 24, 2015) Enhanced SDR Guidance and Administrative Updates: This change incorporates carrier and associated account data in the DLMS 940R MRO for the purpose of communicating return shipping instructions to the storage activity. Significant Changes/Impacts: Identification of the carrier and applicable account number will permit systemic logic within the storage activity to read and apply the data thereby enabling the transportation costs to be assumed by the vendor to which discrepant materiel is being returned. SDR guidance updated to specifically state that SDR disposition instructions directing DLA distribution centers to ship discrepant materiel to another location, (e.g., return to the vendor) must be concurrent to transmission of the DLMS 940R Materiel Release. The DLMS 940R is required to ensure the audit history for this materiel is properly recorded.

44. 44 Discrepancy/Deficiency Reporting Functional Review DCMA Black Belt (BB) Project: SDR Correction Problem Statement:The DoD received 2,479 SDRs for procurement source receipts (Document Type 9) during August 2012 (3.4% of Type 9 receipts processed), of which 1,006 (41%) were for assets from DCMA administered contracts, as a result of items not being packaged in accordance with the contractual packaging/marking requirements. Goal: Reduce the number of packaging P series SDRs being generated at the depot by increasing the awareness through DCMA and educating the contractor. Process: Team used Lean 6 Sigma approach: process documentation, data collection, fishbone diagram, cause and effect matrix, root cause analysis, root cause/effect: SDRs not being communicated to DCMA for investigation SDRs not being communicated to the contractor for root cause identification and elimination Continued generation of SDRs due to improper packaging

45. 45 Discrepancy/Deficiency Reporting Functional Review DCMA BB Project: SDR Correction (continued) Significant Changes/Impacts: ADC 1059 - Mandatory requirement for the use of a four-character packaging discrepancy code to better identify deficiencies with packaging  Implemented ADC 1011 - Routing Identifier Code to distinguish between DLA and DCMA to ensure proper routing to SDR application used by DCMA  Implemented ADC 1052 - WebSDR process enhancement and interface with Electronic Document Access (EDA) system to identify DCMA Contract Administration Office (CAO) and vendor CAGE  Anticipating a significant impact on reducing the number of discrepancies by increasing awareness through DCMA and, ultimately, identifying root causes and educating the contractor  Tested….implementation shortly ADC 1005 - Provide SDR information copies to DCMA and allow item managers to forward SDRs to DCMA for action using automated process  Partially implemented

46. 46 Discrepancy/Deficiency Reporting Functional Review Standard Line of Accounting (SLOA) Requirement: Joint Deputy Chief Management Officer and Under Secretary of Defense (Comptroller) Chief Financial Officer policy established DoD SLOA and directed updates to the Standard Financial Information Structure (SFIS) (September 14, 2012). ADC 1043 added discrete SLOA/Accounting Classification data elements to logistics transactions with financial implications to implement SLOA within DLMS. Goal: Improve financial information, improve interoperability among business systems, provide better end-to-end funds traceability and linkage between budget and expenditures, and help achieve audit readiness... Process: SLOA requirement was extended to SDRs where the original SLOA/Accounting Classification data is not previously provided due to the use of a constructed document number. Under draft PDC 1084, the SQCR will also support use of a constructed document number for credit, SLOA/Accounting Classification data content will be added to the SQCR.

47. 47 Discrepancy/Deficiency Reporting Functional Review SLOA (continued) Pending full implementation of SLOA/Accounting Classification, WebSDR and WebSQCR will be responsible for populating the data elements available from the SFIS Fund Code to Fund Account Conversion Table. o When a constructed document number is identified, the Web will match to the table to extract data elements based upon Service/Agency Code (first position of the document number DoDAAC representing the credit-to DoDAAC) and Fund Code. o Data elements available from the table are those elements that do not vary by transaction. This will be the minimum set of data, but additional data elements may be provided by the originating activity. o If the originating activity provides SLOA data, it will be validated to ensure that the content matches the SFIS Fund Code to Fund Account Conversion Table. If any of the data elements populated on the transaction do not match the table, the transaction will be rejected.

48. 48 Discrepancy/Deficiency Reporting Functional Review SLOA (continued)  Department Regular Code  Department Transfer Code  Main Account Code  Sub-Account Code  Treasury Sub Class (not currently available in the SFIS Fund Code to Fund Account Conversion Table)  Sub-Allocation  Availability Type Code  Beginning Period of Availability/Program Year. (If Availability Type Code X (no year funds) is identified for the line of accounting, then the date provided will be interpreted as the Program Year and the Ending Period of Available will not apply)  Ending Period of Availability (not applicable if Availability Type Code X is identified)

49. 49 Discrepancy/Deficiency Reporting Functional Review Item Unique Identification (IUID) Requirement: DOD policy is that the Components use the UII to enhance life-cycle management of assets and provide more accurate asset valuation, to achieve unqualified audit opinions on the Property, Plant and Equipment and Operating Materials and Supplies Portions of DOD Financial Statements. The UII will serve as a common key in financial, property accountability, acquisition, supply, maintenance and logistics systems. Goal: DLMS transactions enhanced to pass the UII and/or serial number for serially managed/tracked materiel in support OSD policy. OSD logistics transaction exchange policy is still evolving. Process: The Federal Logistics Information System (FLIS) IUID Indicator currently designed as a yes/no indicator to provide enterprise-wide visibility of IUID applicability for NSN items. Pending FLIS modernization the IUID Indicator is available thru web-services using the Master Data Capability

50. 50 Discrepancy/Deficiency Reporting Functional Review IUID (continued) ADC 1030 delineated procedures for the receiving activity to submit an SDR identifying a mismatch between the shipment status and the UII and/or serial number for the materiel received. Prior SDR rules required the SDR for mismatches in procurement source shipments and approved UIT programs. o A mismatch means that the IUID data in the shipping information data does not match the item or its packaging o In order to facilitate reporting of discrepancies, particularly those involving IUID discrepancies, the SDR submission process should be integrated with the receiving process allowing receipt data to be captured once and reused. o When reporting an IUID mismatch (including shortage, overage, and incorrect item) the IUID content may be specifically identified as applicable to items received or not received using the IUID Received/Not Received Indicator.

51. 51 Discrepancy/Deficiency Reporting Functional Review SDR Implementation Team Calls Scheduled opportunity to discuss wide variety of issues – ranges from SDR policy, procedures, transaction processing to MILSTRIP, MILSTRAP, and MILSBILLS procedures as they relate to discrepant receipts Participants include functional and systems personnel A few current topics: LMP testing functionality for SDRs routed to ammo storage activity for non- Army managed items Tracking DSS fixes/enhancements Component SDR system compliance issues Requesting confirmation that DLA SDR process supporting Navy BRAC requisitions (YOTHER) is working properly (ADC 371) Planned PDC development New edits to improve data quality Separation of reply codes recommending/authorizing credit (supporting issue reversal)

52. 52 Discrepancy/Deficiency Reporting Functional Review DLA/Service Suspended Stock IPTs All IPTs receive tailored reports from DLA Distribution to track suspended assets (SDR and SQCR) DLA/Air Force: Bases need additional training/system edits to ensure correct SDR content: reduce volume of wrong action activity and wrong shipping activity on AF Enterprise Solution-Supply (ES-S) SDRs DLA using WebSDR attachment functionality to send pictures to Air Logistics Centers (ALCs) to determine identification of materiel/condition Establish documented process to work SDRs for non-AF managed assets This is a retail supply function. DLA Aviation agreed and a process was developed and tested by DLA-A at WR...now deployed and expanded to other ALCs. This work-around needs to be implemented pending better, more automated solutions.

53. 53 Discrepancy/Deficiency Reporting Functional Review Air Force SDR Process Flow 53

54. 54 Discrepancy/Deficiency Reporting Functional Review DLA/Service Suspended Stock IPTs DLA/Navy Suspended Materiel Drumbeat: Researching material suspended in L-condition due to missing QAR signature in WAWF Inconsistent dollar thresholds – DLMS DLM vs NAVSUP and Stock Readiness instructions – corrections included in ADC 1127 DLA/Marine Corps DLA/Army

55. 55 Discrepancy/Deficiency Reporting Functional Review DLMSO Day-to-Day SDR Support Fielding questions on policy and transaction processing Reviewing test scenarios and test results Advising Services on how to handle failed SDRs Prioritization of DLA Transaction Services workload Advising DLA Transaction Services on development of program logic

56. 56 Discrepancy/Deficiency Reporting Functional Review What’s next? FMS SDRs submitted/processed as PQDRs: Multi- phased approach to be developed to transition to improve processing….key will be SCES producing DLMS 842P Business rules for forwarding SDRs for reparables procured by DLA and managed by a Military Service Additional system interfaces and enhancements for existing interfaces Re-engineer procedures associated with depot reporting of discrepancies to owner, resulting in second SDR to SoS

57. 57 Discrepancy/Deficiency Reporting Functional Review Any Questions?