Pratt & Whitney Canada Do Brazil

Physical Inventory Count Procedures for Dec 21and 22, 2010 Count
POLICY
To ensure that a physical inventory count is performed at least once a year and is done in a manner that ensures complete
and accurate results.
APPLICABILITY
Pratt & Whitney Canada Do Brazil
METHOD OF APPLICATION
1. Inventory Inventory is segregated into the following categories:
a. Stockroom parts physically located in the stockroom and parts at production line - Work Shop in Sorocaba
and TAP in Porto Alegre .
The MICROSIGA system classifies parts as follows:
i. Warehouse 01 New parts
ii. Warehouse 03 - Overhauled parts
iii. Warehouse 04 - Exchange parts
iv. Warehouse 22 - Strategic Inventory Engine Model PW 535
v. Warehouse 24 - Strategic Inventory Engine Model PW 617
vi. Warehouse 25 - Strategic Inventory Engine Model PT6C-67C
vii. Warehouse 26 - Strategic Inventory Engine model PWC 308C
viii. Warehouse 27 - Consignment Inventory Engine model PW 206C customer
ix. Warehouse 32 - Consignment Inventory ( PW206C Under repair )
b. Work in Process (WIP) parts that have been issued to a work order and are located on the shop floor
( Sorocaba and Porto Alegre ) . The MICROSIGA system classifies these parts as follows:
i. Sorocaba - warehouse 08 Parts repaired WO open
ii. Sorocaba - warehouse 09 New Parts
iii. Sorocaba - warehouse 10 Overhauled Parts
iv. Sorocaba - warehouse 11 - Exchange Parts
v. Porto Alegre - warehouse 19 - New Parts at TAP
vi. Porto Alegre - warehouse 20 - Overhauled Part at TAP
vii. Porto Alegre - warehouse 21 Exchange part at TAP
In Sorocaba - all of these parts must be matched with an Work Order Open - if not , we do not found the part
but recognized the customer / or end user - one invoice must be not done in order to regularize the inventory count.
In Porto Alegre all of these parts must be matched with a report that TAP will be send to us position as of
our cut-off date This report will set forth the data to be matched with our nota fiscal ( Danfe ). For this purpose, we will

previously send TAP a simple letter, without our inventory position, asking them to report their own status, this way
providing an independent information.
2. Inventory Cut-off Date All shipments and receipts will be completed by 17:00 hours on Dec 20, 2011. Inventory
reports in MICROSIGA will be printed to show the on-hand balances prior to the count. After the cut-off there is to be no
movement of inventory until the inventory count is complete .
3. Inventory Tags Pre-numbered tags , two part inventory tags will be used to perform the count. At a minimum the
following will be included on the tag:
a. Part Number

d. Quantity Counted

b. Short Description

e. Location

c. Work Order # if applicable

f.

Initials of one counter

g. The tags must be filled out in either blue or black ink. If an error is made in filling out the tag a single line can be
drawn through the error and corrected. If there is more than one error the tag should be voided and new tag
used.
h. Both , parts and the second copy of the tag , will remain with the part until the area has been cleared by an
auditor. The first copy to be control for data entry.
i.

Inventory Tag Control Log A tag control log will be maintained by numerical sequence. Tags will be issued
to teams in batches of 25. The team must sign for the tags received. The team will be responsible for returning
all tags issued. When tags are returned they will be identified as:

j.

Used

k. Unused

l.

Void

m. Missing

n. Any missing tags must be searched for and accounted for.

4. Inventory Team There will be 4 inventory count . There will be 01 audit person. There will be one person
specifically assigned to data entry. The team assignments are as follows:
a. Count 1: Julio Cesar ,
b. Count 2: Marcus Proena
c. Count 3 : Anderson Cardoso ,
d. Count 4 : Allison Cardoso
e. Auditor :- Messias
f.
g. Data Entry: Marcia Braga / Eduardo
h.
5. Audit Person the audit person is responsible for verifying the accuracy of the count. This person will
review tags filled out by the counters to ensure they are accurate and complete. The auditor must initial
any tag they have reviewed and record the results in an audit log that identifies the tags audited. At a
minimum 5.0% of all tags and shall be officially audited. However, if a pattern of errors becomes apparent
the auditor must inform the counterperson(s) immediately and increase the audit sample size accordingly.
6. Data Entry The count results will be compared to the MICROSIGA system on-balances. Major
discrepancies will be reviewed by Audit Person for accuracy. After all tags have been entered and major
variances reviewed the MICROSIGA system will be run an new report that will identify all parts not
counted at this date.- for all of these parts a new count will be done . All inventory to be adjusted in
Microsiga must clearly describe part by part and the end of page with the total amount adjustable All
inventory adjustment need to be as per the approval matrix before any adjustment done .
a. If approved ( signed by the Controller ) all inventory adjustments are made a transaction report for
the date of the inventory count is to be printed and filed as back-up with all other docs that support
this inventory process( all pages).