DEFENSE LOGISTICS AGENCY 

HEADQUARTERS 

8725 JOHN J. KINGMAN ROAD 

FORT BELVOIR, VIRGINIA 22060.6221 

March 26, 2014 

MEMORANDUM FOR SUPPLY PROCESS REVIEW COMMITTEE (PRC) MEMBERS 

SUBJECT: Approved Defense Logistics Management Standards (DLMS) Change (ADC) 1109, 

Intra-DLA Change: Revise DLA Disposition Services Upgrade from Scrap 

Procedures and DLMS 527R Receipt to Allow use of Local Stock Number (Supply) 

The attached change to DLM 4000.25, Defense Logistics Management System, is 

approved for implementation. The updated DLMS implementation convention will be posted to ' 

the Defense Logistics Management Standards Office Web site at www.dla.mil/j6/dlmso/elibrarv/TransFormats/formats.asp within 10 days from the above date. 

Addressees may direct questions to Ms. Mary Jane Johnson, (703) 767-0677; DSN 427-0677 

or email: Mary.Jane.Johnson@dla.mil. Others may direct questions to their Service or Agency 

designated Supply PRC representative available at 

www.dla.mil/j-6/dlmso/CertAccess/SvcPointsPOC/allpoc.asp. 

Attachment 

As stated 

cc: ODASD(SCI) 

Director 

Defense Logistics Management 

Standards Office 
Attachment, ADC 1109

Page 1 of 3

ATTACHMENT TO ADC 1109

Intra-DLA Change: Revisions to Procedures and to DLMS 527R Receipt 

to Allow for use of Local Stock Number (LSN) in the DLA Disposition 

Services Upgrade from Scrap Process (Supply)

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Service/Agency: Defense Logistics Agency (DLA); DLA Disposition Services 

b. Technical POC: DLA Logistics Information Service, LAR 269.961.7521

c. Functional POC: DLA Disposition Services, DB 269.961.5906

2. FUNCTIONAL AREA:

a. Primary Functional Area: Supply/Logistics – DLA Disposition Services Materiel 

Receipt/Inventory 

b. Secondary Functional Process: Supply, Property Accountability

3. REFERENCES:

a. Defense Logistics Manual (DLM) 4000.25, Defense Logistics Management System, 

Volume 2, Supply, Chapter 16, www.dla.mil/j-6/dlmso/elibrary/manuals/dlm/dlm_pubs.asp

b. Approved Defense Logistics Management Standards (DLMS) Change (ADC) 1017, 

September 18, 2012, Intra-DLA Revisions to Procedures and to DLMS 527R Receipt and 947I 

Inventory Adjustment, and MILSTRIP to Support the Upgrade from Scrap Process for use by 

DLA Disposition Services under Reutilization Business Integration (RBI) (Supply (DLMS/ 

MILSTRIP)), www.dla.mil/j-6/dlmso/eLibrary/Changes/approved5.asp

c. DOD 4160.21-M, Defense Materiel Disposition Manual, Chapters 1 and 3, 

www.dtic.mil/whs/directives/corres/pdf/416021m.pdf

4. APPROVED CHANGE:

a. Brief Overview of Change: This change revises the DLA Disposition Services Upgrade 

from Scrap process, and associated DLMS 527R, to recognize a local stock number (LSN) item in 

the DLMS 527R Receipt, with LIN01 Source of Materiel Received/Returned Code V, when

upgrading items from a scrap LSN. The upgrade from scrap procedures currently published in 

DLM 4000.25, Volume 2, Chapter 16 (reference 3.a.), are based upon requirements approved by 

ADC 1017 (reference 3.b.). However, the current procedures only recognize upgrading from scrap 

to a national stock number (NSN). This change revises the current procedure to recognize either 

an NSN or an LSN in the DLMS 527R Receipt when upgrading items from a scrap LSN.

b. Background: Policy and authority for upgrading materiel from scrap is found in 

DOD 4160.21-M (reference 3.c.). There are a variety of instances in which DLA 

Disposition Services would perform an upgrade from scrap. Items that were downgraded 
Attachment, ADC 1109

Page 2 of 3

upon receipt, or that were downgraded when screening was complete may be upgraded from 

scrap if a business need exists. Additionally, items that were downgraded to scrap but are 

later identified as useable items would be upgraded. 

(1) The DLA Disposition Services Field Office (which uses DSS) will continue to

assign a unique control number (UCN), where the eleventh digit is assigned a Utilization Code 

C to indicate the 527R receipt of the item is the result of an upgrade from scrap, and generate a 

947I Inventory Adjustment transaction with Quantity or Status Adjustment Reason Code BR,

Inventory Adjustment Decrease (Upgrade from Scrap), to decrement the relevant scrap pile for 

the designated weight of the scrap to be upgraded. The field office sends the 947I Inventory 

Adjustment transaction to DLA Disposition Services (which uses EBS) to update the proper 

inventory records.

(2) Currently, the DLM 4000.25 disposition services procedures only address

upgrading scrap to a useable NSN. However, DLA has identified a requirement to process items 

from a scrap LSN to a useable LSN. The field office will enter the relevant receipt information

in the DSS receipt process. At this step in the process, the field office will identify either the 

NSN or an LSN the scrap is being upgraded to, in addition to quantity and the other data required 

for a regular Receipt. After the field office has completed this process, a 527R Receipt 

transaction, with 2/LIN01/10 Code V indicating Upgrade from Scrap, will be sent to DLA 

Disposition Services EBS for further processing.

c. Describe Approved Change in Detail: This change revises the DLMS procedures as 

well as the 527R Receipt transaction, to recognize upgrading to either an NSN or LSN, rather 

than just an NSN, in the Receipt for the DLA Disposition Services Upgrade from Scrap 

process. The field office will enter the relevant receipt information in the DSS receipt process.

The field office will identify either the NSN or the LSN, to which the scrap is being upgraded, 

in addition to quantity and the other data required for a regular Receipt.

d. Revisions to DLM 4000.25 Manuals: 

(1) Revise DLMS 527R Receipt as shown in the enclosure. 

(2) Revise DLM 4000.25, Volume 2, Chapter 16 (changes are shown in bold red italics):

(a) C16.6.4.2. Upgrade from Scrap. The upgrade from scrap process is used by 

the DLA Disposition Services and its field offices when a business need exists to re-classify 

materiel previously receipted as scrap or downgraded to scrap after receipt to a useable NSN or 

useable LSN item. An upgrade from scrap can occur at any time subsequent to the initial receipt 

of scrap or downgraded materiel. Policy and authority for upgrading materiel from scrap can be 

found in DoD 4160.21-M.

(b) C16.6.4.2.3. Creation of New Receipt for Items Upgraded from Scrap. The 

field office will identify the useable NSN or useable LSN, to which the scrap is being upgraded to, 

in addition to quantity and other data required for a regular non-scrap receipt. The upgrade from 

scrap process will not reference a specific scrap DTID or DTID and suffix, only the scrap LSN and 

the warehouse location of the scrap pile. Therefore, the DLMS 527R Receipt, with the source of 
Attachment, ADC 1109

Page 3 of 3

Materiel Received/Returned Code V, will pass the new useable NSN or useable LSN, and will 

include the original scrap LSN as a secondary reference (2/LIN08/010, code SW), for auditability 

purposes. The new receipt is created for the upgraded NSN or LSN, as a result of the DLA 

Disposition Services process authorized by DoD 4160.21-M, to upgrade materiel from scrap 

subsequent to the initial receipt of materiel. 

 e. Alternatives: None.

5. REASON FOR CHANGE: Current DLM 4000.25 procedures for DLA Disposition Services 

address upgrading scrap to a useable NSN. However, DLA has also identified a requirement for 

upgrading scrap to a useable LSN. This change updates the procedures and DLMS 527R Receipt 

transaction to provide capability to upgrade scrap to either an NSN or an LSN.

6. ADVANTAGES AND DISADVANTAGES:

a. Advantages: This change meets the business need of the DLA Disposition Services 

Field Offices to upgrade materiel from scrap to either an NSN or an LSN as required. 

b. Disadvantages: None identified.

7. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: March 2014.

8. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: Not Applicable.

9. IMPACT:

a. New DLMS Data Elements: None.

b. Changes to DLMS Data Elements: None.

c. Automated Information Systems (AIS): No DLA EBS or DSS coding changes 

required. No impact to other DOD Component AIS.

d. DLA Transaction Services: Mapping updates may be needed.

e. Non-DLM Publications: None identified.

10. Proposed DLMS Change (PDC) 1109 Response Table:

Component Response to PDC 1109

DLA Concurs without comment.

Air Force Concurs without comment.

Marine Corps Concurs as written.

Navy Concurs as written.

USTRANSCOM Concurs without comment.

Enclosure
Enclosure ADC 1109

Page 1

ENCLOSURE TO ADC 1109

DLMS 527R Change Table

# Location DLMS 527R Receipt 

Revision

Reason

1 DLMS

Intro

Notes

Add ADC 1109 to DLMS Introductory note 5:

- ADC 1109, Intra-DLA Change: Revise DLA Disposition Services Upgrade 

from Scrap Procedures and DLMS 527R Receipt to Allow use of Local Stock 

Number (Supply)

Identifies 

changes 

included in the 

implementation 

convention.

2 2/LIN08/010 Revise DLMS Note 2 to LIN08:

DLMS Note: 

1. DLA Disposition Services uses the Reference Materiel Number for the 

downgrade to scrap process, when materiel turned into a DLA Disposition 

Services Field Office was determined to be scrap at initial receipt and/or 

downgraded after receipt, and a DLA Disposition Services scrap LSN was 

cited at LIN02/LIN03. The NSN or LSN that the generator identified when 

materiel was turned in will be populated as the Reference Materiel Number at 

LIN08/LIN09. Authorized DLMS enhancement for use by DLA Disposition 

Services in receipt and historical receipt transactions for downgrade to scrap 

(LIN01 code W). Refer to ADC 443. 

2. DLA Disposition Services uses for their upgrade from scrap process, to cite 

the original scrap LSN for the item that was upgraded. The NSN or LSN for 

the upgraded item is cited at LIN02/LIN03. Authorized DLMS enhancement 

for use by DLA Disposition Services in receipt and historical receipt 

transactions for upgrade from scrap (LIN01 code V). Refer to ADC 1017 and 

ADC 1109.

3. For DLMS use only the following codes are authorized. 

FS National Stock Number

SW Stock Number

DLMS Note: Use to identify the local stock number (LSN).

Documents 

requirement.