SUSTAINMENT 

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE 

3500 DEFENSE PENTAGON 

WASHINGTON, DC 20301-3500 

 

MEMORANDUM FOR SUPPLY DISCREPANCY REPORTING PROCESS REVIEW

COMMITTEE

 

SUBJECT: Approved DLMS Change 1402, Administrative Update for Supply Discrepancy 

Reporting for Processing Missing Serial Number Discrepancies

The attached change to Defense Enterprise Data Standards, as outlined in the attachment, 

is approved for implementation.

Addressees may direct questions to Mr. Ben Breen, e-mail: Benjamin.Breen@dla.mil.

Others must contact their designated PRC representative available at 

http://www.dla.mil/HQ/InformationOperations/DLMS/allpoc/

METHOD.LEIGH Digitally signed by

METHOD.LEIGH.E.1098529302

.E.1098529302 Date: 2021.09.03 09:40:32 -04'00'

cc: 

OUSD(C) 

DLA J6DS

Leigh E. Method, SES

Deputy Assistant Secretary of Defense 

for Logistics
Attachment, ADC 1402

Page 1

ADC 1402

Update for Supply Discrepancy Reporting for Processing Missing 

Serial Number Discrepancies

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: Mr. Ben Breen, DEDSO

b. Functional POC: Mr. James Weiner, DLA J345

2. REFERENCES:

a. Approved DLMS Change 1198, Establishing and Maintaining Accountability for 

Service Owned Capital Equipment Stored at DLA Distribution Centers, October 16, 2016

b. Approved DLMS Change 1198A, Establishing and Maintaining Accountability for 

Service Owned Capital Equipment Stored at DLA Distribution Centers – (Missing Serial 

Numbers and Remove 867I Issue Transactions), September 6, 2017

c. Approved DLMS Change 1244, Establishing Visibility of Unique Item Tracking 

(UIT) Program Items for Service-Owned Assets Stored at DLA Distribution Centers and 

Corresponding Revisions to Inventory Procedures Related to Capital Equipment, June 7, 2018

d. DLM 4000.25, Defense Logistics Management Standards (DLMS), Volume 2, Supply 

Standards and Procedures, Chapter 17 - Supply Discrepancy Reporting

3. APPROVED CHANGE(S): Significant changes after staffing are highlighted in green. 

a. Brief Overview of Change: Approved changes to DLM 4000.25. Volume 2, Chapter 

17 Supply Discrepancy Reporting (SDR) to modify procedures for processing discrepant items 

requiring serial number tracking, where the item(s) serial numbers are missing or illegible. Also, 

this change modifies several discrepancy code narratives, and the title for the U Discrepancy 

Codes series in Appendix 7.28. This approved change addresses the following:

(1) Proper discrepancy code and action codes to be used to define when a serial 

number is required but not present on the materiel.

(2) Proper disposition response to missing serial number discrepancies.

(3) Follow up request/response when the initial disposition response does not 

solve the Discrepancy.

(4) Remove Discrepancy Code U11 (Materiel unidentifiable; stock number 

missing or damaged) and replace it with a new Discrepancy Code Z8 (Materiel unidentifiable; 

stock number missing or damaged). 
Attachment, ADC 1402

Page 2

(5) Modify the title under the U Discrepancy Codes in Appendix 7.28 as shown 

in Enclosure 2.

(6) Incorporate policy guidance regarding duplicate serial numbers in chapter 30. 

b. Background: The Defense Logistics Agency (DLA) implemented changes to 

serialized processing of Service owned materiel in DLA custody per ADC’s 1198, 1198A and 

1244 (References 2.a., 2.b., and 2.c.). After implementation, DLA encountered several 

challenges with the current SDR procedures for missing/illegible serial numbers as the storage 

activities are not equipped to embed data plates into items when required. As a result, DoD 

SDR/UIT subject matter experts recommended modifications to the SDR procedures as well as 

certain discrepancy codes under the U series. These changes will facilitate communication of 

discrepancies where the human readable serial number is either illegible/missing, or otherwise 

not in compliance with DoD policy and requires marking. 

c. Approved Change in Detail: When a UIT program item is received at a DLA 

distribution center and does not have serial number marking, or the serial number is illegible the 

following process applies.

(1) The DLA distribution center receiver will submit an actionable SDR to the 

owning activity, citing Discrepancy Code U13 and other applicable discrepancy code(s) with 

clarifying remarks.

(2) The owning activity (action activity who received the SDR) will respond to 

the SDR with the appropriate serial number(s)/UII using one of the two following SDR reply 

codes:

(a) SDR Reply Code 611 (Reidentify unique identification (UII/serial 

number) and return to stock). This option is available for items that do not required a permanent 

marking embedded or will be subsequently sent to maintenance. If going into maintenance, 

DLA Distribution will need to temporarily tag the items. 

1. If the material owner (action activity) determines they need to

send someone to a DLA storage activity to physically mark the material; the material owner

(action activity) will need to coordinate with the appropriate DLA Distribution Headquarter 

(HQ) point of contact (POC) to facilitate the site visit.

2. DLA Distribution will keep the SDR in an open status, until 

the items are physically marked. The material owner (action activity) will NOT respond to the 

SDR using Reply Code 611 until after they have conducted the site visit and physically marked 

the material. 

3. Once the items have been physically marked by the material 

owner (action activity) and the owner (action activity) replies with Reply Code 611, DLA 

Distribution would follow normal procedures to close the SDR and generate the completion 

notification. 
Attachment, ADC 1402

Page 3

(b) SDR Reply Code 602 (Item(s) unsuitable; destroy.) This option will 

require DLA Distribution to temporarily tag the items prior to shipping to DLA Disposition 

Services.

(3) Upon receipt of the SDR response, the DLA distribution center stock 

readiness team will process the response by assigning the serial numbers using temporary tags 

(serial number only).

(4) If the DLA distribution center stock readiness team finds discrepancies with 

the serial numbers provided by the material owner such as duplicates, the DLA Distribution 

Center will return the SDR response to the materiel owner for reconsideration and resolution. 

1. For clarification under Item Unique Identifier (IUID), a 

duplicate serial number is when two identical items have the same NSN, serial number/UII, and 

CAGE code. 

2. Chapter 30 provides additional instructions for duplicate serial 

numbers. 

(5) Upon receipt of the reconsideration, the materiel owner will respond with 

non-discrepant serial number/UII assignments and send the reply back to the DLA distribution 

center.

(6) The DLA distribution center stock readiness team will then process the 

response as indicated in Step 3 above, which completes the process. 

(7) Update and modify the definition of the following Discrepancy Codes U11, 

U12, U13, and add a new discrepancy Code Z8 as shown in Enclosure 2.

(8) Incorporate policy guidance under chapter 30 regarding duplicate serial 

numbers. A duplicate serial number refers to two or more items where the NSN, serial number, 

UII (when available), and manufacturer CAGE code are the same. Therefore, two identical 

items with the same serial number may not necessarily be a duplicate. DoD Components will 

report discrepancies at time of receipt using the SDR; storage quality control report (SQCR) for 

materiel in storage. The material owner (action activity) is responsible for the resolution of the 

duplicate and must suffix the serial number, as necessary. The material owner will then provide 

any additional information/instructions to the DLA storage activity to reflect the new serial 

number in the item marking.

d. Revisions to Defense Logistics Manuals:

(1) DLM 4000.25 Volume 2 Chapter 17 Supply Discrepancy Reporting. See 

Enclosures 1 and 2.

(2) DLM 4000.25 Volume 2 Chapter 30, Procedures For Serially Managed 

Materiel Requiring Owner Visibility. See Enclosure 1
Attachment, ADC 1402

Page 4

e. Approved Transaction Flow: Standard SDR processing applies.

f. Alternatives: None noted.

4. REASON FOR CHANGE: Clarify the procedures at a DLA distribution center when a 

given serialized item’s serial number is missing or it is illegible.

5. ADVANTAGES AND DISADVANTAGES:

a. Advantages: Increased warfighter support and improved SDR performance metrics.

b. Disadvantages: None noted.

6. ASSUMPTIONS USED OR WILL BE USED IN THE CHANGE OR NEW 

DEVELOPMENT: None noted.

7. ADDITIONAL COMMENTS TO CONSIDER: None noted.

8. ADDITIONAL FUNCTIONAL REQUIREMENTS: None noted.

9. ESTIMATED TIMELINE/IMPLEMENTATION TARGET: Upon approval.

10. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: None noted.

11. IMPACT: 

a. New/Changes Data Elements: Update LOGDRMS with the code changes to SDR

Discrepancy Codes as shown in Enclosure 2.

b. Automated Information Systems (AIS): The following AISs must be updated to 

reflect the Discrepancy Code Definitions updates identified in Enclosure 2, and procedures as 

described above upon approval: Product Deficiency Reporting and Evaluation Program 

(PDREP), GSA Vision, DLA Distribution Standard System (DSS), Army Logistics 

Modernization Program (LMP), Air Force Security Assistance and Cooperation (AFSAC), Air 

Force Wholesale DO35K, Air Force Integrated Logistics System Supply (ILS-S) and DLA 

Enterprise Business System (EBS).

c. Defense Automatic Addressing System (DAAS): Update WebSDR Discrepancy 

Code Definition as identified in Enclosure 2 upon approval.

d. Non-DLM Publications: None.
Attachment, ADC 1402

Page 5

12. PROPOSED DLMS CHANGE (PDC) 1402 RESPONSE/COMMENT RESOLUTION:

Component Response/Comment Disposition

1. DLA Concur with comments.

Comments:

1. While the items identified under the UIT 

program does not impact DLA from the 

perspective that DLA does not own or 

manage items which are under a UIT 

program. But it may impact some of the 

reports DLA Distribution provides to the 

Military Services. 

2. (4) Removal of Discrepancy Code U11 

(Materiel unidentifiable; stock number 

missing or damaged) and replace it with a 

new Discrepancy Code W9 (Materiel 

unidentifiable; stock number missing or 

damaged). 

3. (2) The owning activity (action activity 

who received the SDR) will respond to the 

SDR with the appropriate serial 

number(s)/UII using one of the 3 following 

SDR reply codes:

4.As discussed, this morning, I reviewed the 

draft PDC and concur. I did look at the 

reply 137 and I think it works. I did make a 

comment after discussion with DLA 

Distribution that the following sentence be 

modified 3.b.(2)(b) removing “HQ”. Site 

visits are coordinated at the local level.

SDR Reply Code 137 (See remarks). The 

material owner will annotate in the remarks 

when sending someone to a DLA storage 

activity to mark the material. The owner 

will need to coordinate with the appropriate 

DLA Distribution HQ POC to facilitate the 

site visit. 

Resolved.

DEDSO Response:

1.As noted.

2. Proposed new Discrepancy Code W9 is being 

replaced with Z8 resulting from discussions to 

better categorize this discrepancy due to current 

logic designed/built into DSS for W series

wrong item discrepancy codes. (Z8 Materiel 

unidentifiable; stock number missing or 

damaged.)

3.The appropriate serial number(s)/UII options 

for SDR reply codes is reduced to 2 from 3. 

Reply Code 611 will be used after the item is 

properly marked. Additionally, SDR Reply 

Code 602 (Item(s) unsuitable; destroy.) This 

option will require DLA Distribution to 

temporarily tag the items prior to shipping to 

DLA Disposition Services.

4. As noted.

Updates to the DLM Volume 2 Chapter 17 are 

made to reflect the above changes.

2. Navy Concur without comment. As noted.

3. Air Force Concur with comment.

Comment:

I foresee a problem. If DLA sends a Code 

137 to the Depot to add information to the 

discrepant asset someone in our office 

could interpret that information as directed 

to us and the FMS Country. I recommend 

that DLA makes a new 600 series code to 

inform the Depot.

Initial non concurrence resolved.

DEDSO Response:

Reply Code 137 was removed from this change. 
Attachment, ADC 1402

Page 6

Component Response/Comment Disposition

4. US Army Concur without comment As noted.

5. USMC Concur without comment. As noted.

6. DAAS Concur with no comments. As noted.

7. USTRANS

COM

Abstain. As noted.

8. GSA None. N/A

9. ODASD(L) Concur with comment.

Comments:

1. PDC paragraph B.(8). needs clarification 

– it seems to contradict the previous 

sentence.

2. Enclosure 1 DLM Volume 2 C30.12.3. 

Clarify this statement – it seems to 

contradict the sentence immediately before.

Resolved.

DEDSO Response:

1. Clarification provided in ADC 1402.

2. Clarification provided in ADC 1402.
Enclosure 1, ADC 1402

Page 1

Enclosure 1

Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and Procedures

Make the following change to Volume 2. Additions are identified by bold red italics and 

deletions by double strikethrough text. 

A. Chapter 17 Supply Discrepancy Reporting

Preceding text not shown

C17.3.8.6. To comply with Financial Improvement and Audit Readiness 

(FIAR) requirements regarding accountability and management of materiel, serially 

managed items under an active UIT Program requires serialization data and owner 

visibility. Thus, serially managed items under an active UIT program items received 

without a serial number will not only require an SDR but will stop the equipment in the 

supply chain until a serial number is identified and the materiel is marked. If the storage 

activity cannot determine the serial number using the associated shipment notice and 

marks/labels on the item or packaging, the storage activity will report the receipt in a 

suspended condition) and submit the SDR to the owner citing the Discrepancy Code 

U13 and other applicable discrepancy code(s) with clarifying remarks. The materiel 

owner is responsible for determining the appropriate serial number(s), ensuring no 

duplicates and provideing disposition for marking the item. Chapter 30 provides 

instructions on how to identify and resolve serial number duplication scenarios. 

If DLA Distribution Center find duplicates or other discrepancies with the serial 

numbers provided by the Owner, the DLA Distribution Center will return the SDR 

response for reconsideration and resolution.

C17.3.8.7. Discrepancies involving missing/illegible serial number 

markings must be reported at time of receipt via SDR. A data plate is required for 

all serially managed items destined to remain in the supply chain. Temporary 

tags are authorized for items intended for disposal or maintenance. The materiel 

owner is responsible for permanently embedding data plates when required due 

to the type of item (e.g., small arms/light weapons). 

C17.3.8.7.1. When a UIT program item is received at a DLA 

Distribution Center and does not have serial number marking, the following 

process applies. The DLA Distribution Center receiver will submit an actionable 

SDR to the owning activity, citing Discrepancy Code U13 and other applicable 

discrepancy code(s) with clarifying remarks.

C17.3.8.7.1.1. The owning activity (action activity who 

received the SDR) will respond to the SDR with the appropriate serial 

number(s)/UII using one of the two following SDR reply codes:

C17.3.8.7.1.2. SDR Reply Code 611 (Reidentify unique 

identification (UII/serial number) and return to stock). This option is available for 

items that do not required a permanent marking embedded into the item or will be 
Enclosure 1, ADC 1402

Page 2

subsequently sent to maintenance. If going into maintenance, DLA Distribution 

will need to temporarily tag the items. If the material owner (action activity) 

determines they need to send someone to a DLA storage activity to physically 

mark the material; the material owner (action activity) will need to coordinate with 

the appropriate DLA Distribution Head Quarter (HQ) point of contact (POC) to 

facilitate the site visit. 

C17.3.8.7.1.3. DLA Distribution will keep the SDR in an open 

status, until the items are physically marked. The material owner (action activity) 

will NOT respond to the SDR using Reply Code 611 until after they have 

conducted the site visit and physically marked the material. 

C17.3.8.7.1.4. Once the items have been physically marked by 

the material owner (action activity) and the owner (action activity) replies with 

Reply Code 611, DLA Distribution would follow normal procedures to close the 

SDR and generate the completion notification. 

C17.3.8.7.1.5. SDR Reply Code 602 (Item(s) unsuitable; 

destroy.) This option will require DLA Distribution to temporarily tag the items 

prior to shipping to DLA Disposition Services. Upon receipt of the SDR response, 

the DLA Distribution Center stock readiness team will process the response by 

assigning the serial numbers using temporary tags (serial number only). 

C17.3.8.7.1.6. If the DLA Distribution Center stock readiness 

team finds discrepancies with the serial numbers provided by the material owner 

such as duplicates, the DLA Distribution Center will return the SDR response to 

the materiel owner for reconsideration and resolution. 

Uuse SDR Disposition Reply Codes 603 (remark and return to stock) and 611 

(Reidentify unique identification (UII/serial number) and return to stock) apply. Upon 

positive resolution of the missing or mismatched serial number/UII scenario, two 

separate dual inventory adjustment transactions are required to update the serial 

number/UII and update the SCC of the suspended item to the appropriate SCC.

Re-number paragraphs following C17.3.8.7.

B. Chapter 30 Procedures For Serially Managed Materiel Requiring Owner 

Visibility

Preceding text not shown.

C30.12.2. Missing serial number. Serially managed items requiring owner 

visibility that are located in storage without a serial number will stop the equipment in 

the supply chain until a serial number is identified and the materiel is marked. If the 

remarking/relabeling exceeds the dollar threshold for pre-authorized corrective action or 

the storage activity cannot identify the serial number using inventory records and other 

available information, the storage activity will suspend the item in SCC J and prepare an 

SQCR. Cite the applicable discrepancy code and provide clarifying remarks with 
Enclosure 1, ADC 1402

Page 3

descriptive information for the item. The materiel owner is responsible for determining 

the appropriate serial number and providing disposition for marking the item.

C30.12.3. Duplicate human readable serial number. A human readable 

serial number is a combination of alpha-numeric characters, forward slashes and 

dashes that in combination with the item NSN and manufacturer CAGE code, 

helps uniquely identify a serially managed item. However, a human serial number 

alone is only unique to the manufacturer and not to the DoD. A duplicate human 

serial number refers to two or more items where the NSN, serial number, UII 

(when available), and manufacturer CAGE code are the same. Therefore, two 

identical items with the same human readable serial number may not necessarily 

be a duplicate. DoD Components will report discrepancies at time of receipt 

using the SDR; storage quality control report (SQCR) for materiel in storage. 

C30.12.3.1. When a potential duplicate human readable serial number 

exists, the materiel owner is responsible for resolving any discrepancies 

pertaining the human readable serial number and/or missing data plates as well 

as providing the corresponding information to the storage activity for proper 

marking. The DoD Component will suspend any movement of the materiel 

pending resolution. Upon confirmation of the duplicate human serial number, the 

materiel owner may issue a modified human serial number using selected alpha 

suffix to maintain a historical cross-reference. The Component will permanently 

inscribe the modified human serial number into the item as required. Temporary 

tags are authorized for Items destined for disposal or maintenance.

C30.13.5.2. Under new procurement, a duplicate human readable serial 

number will result in contractor non-compliance. DoD Components are 

responsible for reporting the discrepancy via SDR and coordinate with the 

manufacturer for resolution of the duplicate human readable serial number(s).
Enclosure 2, ADC 1402

Page 1

Enclosure 2

Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and Procedures

Make the following change to Volume 2. Additions are identified by bold red italics and 

deletions by double strikethrough text. 

Appendix 7.28 Supply Discrepancy Report Relevant Data Elements.

DISCREPANCY CODES

Preceding codes not shown

Item Unique Identification (IUID) of Serially-Managed/Tracked Materiel and 

Unidentifiable Materiel

U01 Unique identification (UII/serial number) on label missing, damaged, or 

unreadable

U02 Unique identification (UII/serial number) on item missing, damaged, or 

unreadable

U03 Unique identification (UII/serial number) on supply documentation missing, 

damaged, or unreadable

U04 Unique identification (UII/serial number) not provided on shipping notice

U05 Non-conformance to unique identification requirements under terms of 

contract

U06 Multiple containers without separate unique identification (UII/serial 

number) listings

U07 Mismatch between unique identification (UII/serial number) on item and 

label

U08 Mismatch between unique identification (UII/serial number) on item or 

packaging marks/labels and the associated shipping documentation

U09 Mismatch between unique identification (UII/serial number) on item or 

packaging marks/labels and the associated due-in/shipping notice

U10 Mismatched or missing unique identification (UII/serial number) discovered 

upon opening a sealed pack

U11 Materiel unidentifiable; stock number missing or damaged

U12 Duplicate unique identification UII or serial number (applicable to 

UII/serial number only)

U13 Serial number unknown/missing for serially-tracked item.

U14 Serial number convention invalid.
Enclosure 2, ADC 1402

Page 2

Other Discrepancies

Z1 Other discrepancy - see remarks

Z2 Repetitive discrepancy (must use in combination with other codes or 

describe in remarks)

Z3 Distribution Center receipt not due-in; no prepositioned materiel receipt 

(PMR)

Z4 No record exists for document number cited on supply document (not used 

by distribution center; not applicable to Security Assistance)

Z5 Immediate resolution/replacement of discrepant item under inter-Service 

support agreement (restricted use per Service guidance)1

Z6 Report reopened following inappropriate cancellation/completion (must use 

in combination with other discrepancy codes; must appear as first 

discrepancy code in transactions )

Z7 Property not authorized or not acceptable for turn-in to DLA Disposition 

Services

Z8 Materiel unidentifiable; stock number missing or damaged.

 

1 Refer to ADC 1062 and 1174. Not authorized for use by DLA Distribution Centers.