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ADC 372 Attachment 

ATTACHMENT TO ADC 372 

Request for Discrepancy Indicator Code to Identify 527R MRA Generated Based on 

“Virtual Receipt” to Support Navy BRAC SS&D/IMSP (Supply/Finance) 

1. ORIGINATOR: 

a. Service/Agency: Defense Logistics Agency (DLA)

b. Originator: DLA J-331, 703-325-1924 (DSN 427)

2. FUNCTIONAL AREA: 

a. Primary: Supply/Logistics.

b. Secondary: Finance

3. REFERENCES: 

a. Functional Requirements for DLA’s implementation of the Base Realignment and Closure 

(BRAC) Retail Supply, Storage and Distribution (SS&D)/Inventory Management and Stock 

Positioning (IMSP) 

b. DLMSO memorandum, May 6, 2010, subject: PDC 366A, Procedures and Additional Data 

Content supporting Requisitions, Requisition Alerts, and Unit of Use Requirements under Navy 

BRAC SS&D/IMSP (Supply/Finance) 

c. DLMSO memorandum, April 20, 2010, subject: PDC 406, New and Revised Supply Status 

Procedures to Support “Virtual Receipt” and Requisition Alert Processes under Navy BRAC 

SS&D/IMSP

d. AT&L Memorandum transmitted April 21, 2010, subject: Proposed Changes in support of 

Navy BRAC IMSP Spiral II. This memo documents ADUSD(L&RM)SCI direction provided to DLA 

and Navy authorizing immediate implementation of this DLMS change.

4. REQUESTED CHANGE: Significant revisions subsequent to PDC 389 staffing are 

highlighted in yellow. 

a. Description of Change: 

1) This change request is for the assignment of a new Discrepancy Indicator code for use on 

DLMS 527R standard transactions indicating the Materiel Receipt Acknowledgement (MRA) is the 

result of a virtual receipt being posted in a Navy Maintenance system (Material Access Technology 

(MAT), or Material Resource Planning (MRP) II (MRPII)).

2) This change allows 527R MRA transactions which are generated from the Navy ‘virtual’ 

receipt process to include an MRA Discrepancy Indicator code to facilitate recognition by external 

parties (e.g., logistics response time (LRT), perfect order fulfillment (POF), etc.).

b. Background: 

1) As a result of the 2005 BRAC decision, retail supply, storage and distribution functions 

and associated infrastructure supporting the Navy industrial/maintenance sites will transfer to DLA. 

The Navy sites consist of 2 Naval Shipyards (NSYs) and 3 Fleet Readiness Centers (FRCs). The intent 

of the directive is to significantly improve combat effectiveness while reducing costs by developing a 

world-class, cost-effective supply chain focused on readiness; taking every opportunity to eliminate 

waste, reduce touches, reduce cost, and improve readiness.
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ADC 372 Att 

2) The BRAC SS&D IMSP solution greatly complicates the NSY/FRC material and financial 

interfaces because it takes the material receiving/issuing function out of NSY’s MAT and FRC’s MRP II, 

and places that function in DLA’s Distribution Standard System (DSS) as the DLA “System of Record”. 

This is a problem because DSS is not integrated with NSY/FRC internal material/financial functional 

interfaces. 

3) By design, DSS is a material storage and distribution system for wholesale/retail 

inventory owned by numerous wholesale/retail inventory managers. Accordingly, a materiel release 

order (MRO) (940R/A5_), directed by DLA Enterprise Business System (EBS) to DSS for issue, results 

in an issue to the customer and a materiel release confirmation (MRC) (945A/AR_) sent back to EBS to 

record the Defense Working Capital Funds (DWCF) sale. However, DSS currently does nothing for the 

processing of that DSS issue as a material receipt into the MAT or MRP II to close the NSY/FRC 

material order due and update the financial systems. The dilemma is that while DSS issues the material 

on behalf of EBS, it cannot receive (527R Receipt) the issued material for MAT/MRP II, create the 

customer MRA (527R/DRA) acknowledging the materiel receipt for release to EBS, and update the 

NSY/FRC financial systems. 

c. Process Description (associated process flows provided to DLMSO in April 2010 are at the 

enclosure; updated flows were not available to DLMSO to incorporate at the time this ADC was published): 

1) NSYs and FRCs have scheduled maintenance periods dictated by JCS, NAVSEA and 

NAVAIR requiring material to be on-hand in ready for issue condition for the artisan to begin and 

complete the maintenance on time. NSY and FRCs employ a fully integrated production 

planning/execution and material ordering/receiving IT system. Production plans work packages, and 

the supply personnel orders, receives/stages and issues material to production to support work package 

execution. Material orders, receipts and issue actions are internally linked to NSY and FRC financial 

systems, such that orders, receipts and issues trigger the obligation and expenditure of NSY/FRC funds 

and the establishment of Accounts Payable to pay the bills of material providers. 

2) DLA EBS will purchase materiel and DLA DSS will receipt it into DLA ownership based on 

requirements submitted to DLA on a Requisition Alert (PDC 366A 1) or funded requisition. When material is 

to be issued to an artisan, Navy will submit a funded requisition to DLA to ‘call-out’/issue the material. EBS 

will source the request based on asset availability. The first fulfillment source for funded requisitions from 

the Navy BRAC SS&D customers is the local DSS industrial activity (IA) worksite where the customer is 

physically located and the second will be a site within the DLA network.

3) Issues from the Local DSS IA Work Site: Material issued from the Local DSS IA 

Work Site to the artisan. consists of DLA owned (EBS) and Navy owned (NSY/FRC or NAVICP) 

material. NOTE: DLMSO strikethrough based on the flows DLA-NAVY provided (see enclosure), where 

it appears that virtual MRA only applies when Navy is sending a funded order for DLA materiel. PDC 

was staffed with strike-through, and Navy and DLA concurred with PDC.

(a) After material is issued and shipped from DSS, the 856S Shipment Status is 

generated containing the shipping depot DoDAAC. Based on the Local DSS DoDAAC, MAT/MRP II 

will recognize the 856S (AS_/AU_) as notification that NSY/FRC ordered material has been issued from 

the DSS IA Work Site (inside the NSY/FRC fence). MAT/MRPII will update the customer record with 

 

1

 PDC 366A (reference 3b) provides procedures and content for the requisition alert transaction. The requisition alert 

allows Navy BRAC IMSP sites to notify DLA of their requirements in advance of the funded requisition, thereby allowing 

DLA to procure and position materiel appropriately to support prompt order fulfillment. 
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ADC 372 Att 

shipment status and hold the 856S pending receipt of the 870S with “PD” status (refer to PDC 406 2). 

MAT/MRPII will not create the MRA (527R/DRA) until this delivery status is provided by DSS. 

(b) As a result of the existing Local Manifest function, DSS will provide delivery 

information to MAT/MRP II through the use of supply status 870S (AE_). The unique “PD” status 

code indicates delivery of material from the DSS IA worksite to the artisan. 

(c) MAT/MRP II will process the 870S (AE_) with “PD” delivery status and 

converts the transaction information into receipt transactions for MAT/MRP II. This process results in 

creation of financial transactions to update COST or DIFMS as required. This process will also 

generate a MRA, DLMS 527R (DI Code DRA functionality), reflecting a new discrepancy indicator 

code informing the receiving entity that this transactions was generated as a result of the BRAC SS&D 

sites virtual receipt process. Since this MRA is generated systemically, a subsequent supply 

discrepancy report (SDR) is still possible when material is examined by the artisan or production 

controller.

4) Issues from the DSS Network sites or Service/GSA Warehouse Activities: 

NSY/FRC requested material consists of 511R with Use Codes. The “E” Use Code request indicates 

immediate delivery. Other than “E” Use Code requests indicates that DSS should receive and store 

arriving material as Navy IA owned (placed in custody storage for future issue). 

(a) When 511R “E” Use Code material arrives at the Local DSS IA Work Site, a 

local manifest is opened in DSS. DSS then creates an 870S (AE_) with “PA” (PDC 406) status and 

sends it to the Defense Automatic Addressing System Center (DAASC). 

(1) MAT/MRP II will receive the 870S (with “PA” status) from DAASC, update the 

customer records and hold it pending receipt of the 870S with “PD” status (see PDC 406). 

MAT/MRPII will not create the MRA 527R/DRA until this delivery status is provided by DSS. Upon 

material delivery and closure of the local manifest, DSS will provide supply status 870S/AE_ with 

“PD” status code indicating delivery of material to the artisan. 

(2) MAT/MRP II will process the 870S (AE_) with “PD” delivery status and 

converts the transaction information into receipt transactions for MAT/MRP II. This results in creation 

of financial transactions to update COST or DIFMS as required. This process will also generate a 

DLMS 527R MRA reflecting a new discrepancy indicator code informing the receiving entity that this 

transaction was generated as a result of the BRAC SS&D sites virtual receipt process. Since this MRA 

is generated systemically, a subsequent SDR is still possible when material is examined by the artisan 

or production controller. 

 (b) When 511R other than “E” Use Code material arrives at the Local DSS IA Work Site, 

DSS will receive and store the material as Navy IA owned. DSS will then generate a receipt 527R 

(D4_/D6_) and send it to DAASC. MAT/MRPII will receive the 527R (D4_/D6_) receipt from DAASC 

and updates customer and financial records based on processing the 527R (D4_/D6_). This process will 

also generate a 527R Material Receipt Acknowledgement (MRA) reflecting a new discrepancy indicator 

code informing the receiving entity that this transactions was generated as a result of the BRAC SS&D 

sites virtual receipt process. Since this MRA is generated systemically, a subsequent SDR is still possible 

when material is examined by the artisan or production controller. The DSS receipt process includes the 

 

2

 PDC 406 (reference 3c) defines 870S Supply Status Codes “PA” and “PD” for Material Arrival and Delivery

Status. PDC 406 definition of Status Code ‘PD’ as staffed is: ‘PD – Item has been physically delivered to the 

artisan by the local industrial activity worksite. Applies to DLA/Navy BRAC SS&D/IMSP procedures’. 
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ADC 372 Att 

kind, count and condition check prior to placing in storage, therefore any 527R MRA which MAT/MRPII 

generates as a result of the receipt transaction will not reflect the new discrepancy indicator code. 

[ASpry/DLA verified with JKill/Navy 5/19/2010.] NOTE: DLA provided the update for this paragraph. 

5) In all instances, when applicable, the DLMS 856S (AS_/AU) Shipment status or the 870S 

(AE_) Material Receipt and Delivery Supply Status will reflect the NSN and LSN associated with unit of 

use on transactions generated from DSS to MAT / MRPII. MAT and MRPII will use the appropriate NSN 

or LSN and unit of use or unit of issue based on the qualifiers reflected on the inbound transactions. 

d. Detailed Procedures: 

1) Requires update to DOD 4000.25-M, DLMS, to add procedures for the Navy 

SS&D/IMSP virtual receipt and MRA process described in this PDC. DLA J-33 to provide 

procedures for inclusion in the DLMS manual, Volume 2. Also requires J-33 update to address SDR 

timeframe since the virtual receipt and corresponding virtual MRA is generated systemically; a 

subsequent SDR may follow since the virtual receipt was not based on physical receipt by 

kind/count/condition. SDRs associated with virtual receipt may require longer SDR timeframes 

2) Revise DLMS Data Dictionary data identifier 1270 qualifier ‘EI’, and MILSTRAP 

Appendix 2.17, Discrepancy Indicator Codes to add a new code value as follows:

CODE DEFINITION

V MRA is based on a systemic virtual receipt. MRA is generated from virtual receipt transaction 

which the Navy industrial site (Navy Shipyard/Fleet Readiness Center) created from a Supply 

Status transaction (DLMS 870S) with Status Code ‘PD’. Authorized for Navy and DLA use in 

DLMS 527R MRA under Supply, Storage and Distribution/Inventory Management and Stock 

Positioning (SS&D/IMSP). Refer to ADC 372. 

NOTE: Definition of Discrepancy Indicator Code V as staffed had recognized that Navy also generated 

MRA with the virtual receipt indicator for MRA resulting from a DSS 527R receipt transaction, as was 

originally described in paragraph 4.c.4)(b) above. Subsequent DLMSO/DLA discussion on 5/19/2010 

confirmed that the DSS receipt process addressed in that paragraph included kind/count/condition 

verification; therefore use of the ‘virtual receipt’ indicator in the associated Navy generated MRA 

transaction was not appropriate. Accordingly, DLA updated paragraph 4.c.4)(b), and the definition of 

Discrepancy Indicator Code V, for incorporation in this ADC. 

5. DAASC MAPPING: Update DAASC to allow new data to pass any applicable edits. 

6. ALTERNATIVES: None identified. 

7. REASON FOR CHANGE: 

a. New ‘virtual’ receipt process developed for Navy BRAC Industrial sites does not involve a 

physical receipt of material into Navy ownership. DSS is not integrated with NSY/FRC internal 

material/financial functional interfaces. MAT/MRP II must “feed” transactions based on orders, issues and 

receipts to their supporting financial systems in order to maintain the funds availability and the material 

costs associated with production. The systems used at these sites still have requirements to update their 

financial systems (DIFMS and Cost) with issue and receipt data. 

b. Assigning a new discrepancy indicator value to identify 527R MRA transactions generated from 

the posting of a virtual receipt provides the ability to differentiate those MRAs from MRAs resulting from 

a customer physically examining and receipting materiel.
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ADC 372 Att 

8. ADVANTAGES AND DISADVANTAGES: 

 a. Advantages: 

 (1) This code in the MRA transaction provides the ability to recognize MRA triggered 

based on Navy’s virtual receipt process. 

 (2) Provides all DoD Components the ability to track these MRAs and match up to any SDR 

which may be subsequently submitted by end user. 

 b. Disadvantages: 

 (1) Complicates measurement of perfect order fulfillment using the MRA as discrepant receipts 

will not be discernable when the “Virtual MRA” (MRA generated by virtual receipt process) is employed. 

 (2) Skews Logistics Metrics Analysis Reporting System (LMARS) pipeline measurements/ 

performance. Normally, a physical receipt/MRA closes out the pipeline; in this process an MRA based on 

virtual receipt will serve as the pipeline closeout via systemic means, vice physical receipt 

acknowledgement. Result will be an artificially low LRT.

 (3) Requires new SDR processing logic to allow expanded submission timeframes when the 

Virtual Receipt/MRA process is employed due to the potential for the delay in identifying discrepancies. 

Revised SDR processing requirements/timeframes have not yet been proposed. 

9. POLICY: ADUSD(L&MR)SCI policy decision provided to Navy and DLA for MRA based 

on Navy ‘virtual’ receipt: “Proceed; however, ensure process is in place to measure perfect order 

fulfillment as the MRA will no longer indicate discrepant receipts.” 

10. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: DLA and Navy testing will begin 

June 2010. Target implementation is December 2010. 

11. IMPACT: 

a. Publications:

(1) Requires update to DLMS Data Dictionary data element ID 1270 qualifier ‘EI’ to add a new 

value to the Discrepancy Indicator Codes. Corresponding change required for MILSTRAP Appendix 

2.17, Discrepancy Indicator Code.

(2) Requires update to DOD 4000.25-M, DLMS, Volume 2, to add procedures for the BRAC 

SS&D/IMSP process described by this PDC. 

b. Automated Information Systems (AIS): DLA EBS, DLA DSS, and applicable Navy systems 

must recognize/process a new code value 

c. DLMS Data Elements: No new DLMS data elements are being added by this change. A new 

code value is being added to an existing data element ID 1270 qualifier ‘EI’ Discrepancy Indicator Code 

list. Existing code is used in 527R. 
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ADC 372 Att 

12. COMMENTS TO PDC 389 provided below: 

PDC 389 was directed to the Navy and DLA Supply and Finance PRC representatives 

ORGANIZATION RESPONSE DISPOSITION 

NAVY 

NAVSUP (4/28/10) 

Navy concurs with PDC 389 as written and 

submits no additional changes or amendments. 

Noted. 

DLA 

DLA HQ J-33 (4/30/10) 

DLA concurs. We will be working this change 

under our IMSP Spiral 2 Build. 

Noted. 

AIR FORCE Air Force concurs with PDC as it does not affect 

AF supply processes. 

Noted. 

MARINE CORPS Concurs without comment Noted. 

USTRANSCOM Abstains Noted. 

WAWF and IUID Office 

Contractor Support 

No impact to Wide Area Workflow (WAWF) or 

the item unique identification (IUID) Registry 

and government furnished property (GFP) Hub 

Noted. 

DLMSO 

(Ms. Heidi Daverede) 

The virtual receipt process will skew LMARS 

pipeline performance, since pipeline closeout 

will occur based on a systemic receipt, vice a 

physical receipt. Result will be an artificially 

low LRT. 

Added comment to ADC 372 

disadvantages paragraph. 

DLMSO 

(Johnson/Vitko) 

DLMSO questioned use of the virtual receipt 

indicator for MRAs which Navy generated as a 

result of the DSS receipt transaction/process 

which included kind/count/condition (refer to 

paragraph 4.c.4)(b) of this ADC) 

DLMSO discussed with DLA 

5/19/10 and agreement reached 

that indicator did not apply to 

this paragraph. DLA confirmed 

this with Navy 5/19/10. 

DLA updated paragraph 

4.c.4)(b) and the Discrepancy 

Indicator Code V definition for 

ADC 372 accordingly. 

Enclosure 
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ADC 372 Enclosure 

April 2010 process flows 

ENCLOSURE TO ADC 372 – PROCESS FLOWS Provided by DLA in April 2010

1a. User requests material in MAT A0_ Funded document created, MAT sends funded obligation request to COST and 940S 

via DAASC to DSS. The A0_ funded requisition and picklist information gets sent to PS I/O F -> 1a1, Picklist & Staging 

Process 

1a1. PS I/O F pushes the 511R funded document or the 527R DRA to DAASC. ->2, 9

1b. User requests material in MRP II and is captured by IF5 -> 1b1 

1b1. IF5 creates a DLMS format 511R (A0_), validates funding availability in DIFMS and creates and sends 940S Pick List 

via DAASC to DSS IA Worksite -> FI, 2, Picklist & Staging Process 

2. DAASC receives, validates and routes the 511R to EBS -> 3 

3. EBS receives and processes the 511R -> 4 

4. EBS directs shipment via 940R, forwards to DAASC ->5 

 - EBS provides status -> Status Process 

 - EBS provides inventory On Hand Update 

5. DAASC receives, validates and routes the 940R to DSS IA worksite ->6 

6. DSS IA worksite receives and processes 940R ->6a 

6a. DSS IA worksite retrieve picklist or JO/KO from DSS table -> 6b 

6b. DSS IA worksite picks, packs by picklist or JO/KO listing -> 6c, 6d 

6c. DSS IA worksite delivers material to Artisan and generates 870S (AE_) with Delivery Status ”PD” to DAASC -> 7b 

 Note: For NSYs, 870S with “PD” status will indicate badge number of artisan who accepted delivery. 

6d. DSS IA worksite provides shipment status in the form of an 856S (AS_), and Material Release Confirmation in the form 

of 945A (AR_) to DAASC -> 7a, 7b, Status Process 

9.1 continued on next page... 
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ADC 372 Encl 

April 2010 process flows 

7a. DAASC receives and passes Material Release confirmation in the form of 945A (AR_) to EBS -> 7a1 

7a1. EBS receives Material Release Confirmation (945A (AR_)) and generates interfund billing to customer ->END 

7b. For MAT, DAASC will distribute the 856S (AS_) and the 870S (AE_) with ”PD” to the NSY Pull Queue ->8b 

 For MRP II, DAASC will distribute an 856S (AS_) and an 870S (AE_) with ”PD” to MRP II through IF13 ->8a 

8a. IF 13 will receive the 856S and 870S with PD status and process the 870S. This creates the virtual receipt to MRPII, 

which creates and sends the 527R (DRA) to DAASC  1a1,9 

8a1. Virtual receipt updates the DIFMS for MRP II ->END 

8b. PS I/O F will pull the 856S (AS_) and 870S (AE_) with ”PD” from the DAASC NSY Pull Queue and pass into MAT ->8b1 

8b1. MAT receives the 856S (AS_) and 870S (AE_) with ”PD”, and updates MAT and COST. This creates the virtual receipt 

in MAT, which creates and sends the 527R (DRA) (could be multiple on same Doc#) that is sent to the PS I/O F, which pushes 

the 527R (DRA) to DAASC  1a1,9 

9. DAASC receives, validates and routes the 527R (DRA) to EBS ->10 

10. EBS receives527R (DRA) data and updates sales order appropriately -> End 

 
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ADC 372 Encl 

April 2010 process flows 

1a. User requests material in MAT A0_ (511R) Funded document created, MAT sends funded obligation request to COST. 

The A0_ funded requisition gets sent to PS I/O F -> 1a1, Picklist & Staging Update Process 

1a1. PS I/O F pushes the 511R to DAASC ->2a 

1b. User requests material in MRP II and is captured by IF5 -> 1b1 

1b1. IF5 creates a DLMS format A0_ (511R) , validates funding availability in DIFMS and creates and sends Pick List to 

DSS IA Worksite -> FI, 2a, Picklist & Staging Update Process 

2a. DAASC receives, validates and routes the 511R to EBS ->2b 

2b. EBS receives and processes the 511R ->3a 

3a. EBS determines material availability; directs shipment via 940R and forwards to DAASC ->3b, Status Process 

3a1. EBS backorders request when material is not available and provides status -> Status Process 

3b. DAASC receives, validates and routes the 940R to the appropriate storage activity ->3c 

3c. Storage activity receives and processes 940R ->4a 

4a. Storage activity picks, packs and ships the material. Material Release Confirmation and Shipment status are passed to 

DASSC -> 4b, 4a1, Status Process 

4a1. DSS IA Worksite physically receives material ->5a 

4b. DAASC receives Material Release Confirmation, 945A (AR_) and passes to EBS-> 4c 

4c. EBS receives Material Release confirmation and generates Interfund billing to customer ->END 

5a. DSS queries picklist table to receive picklist & staging updates->5b 

5b. DSS will use logic to check picklist to determine to store or deliver of material to the Artisan . >5b1 or 5b2 

5b1. If the picklist line does not reflect “E” use code, DSS IA worksite stores the material in Custody Storage to await 

callout by Artisan and generates 527R (D6A) to DAASC -> 6a 

 9.2 continued on next page... 
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ADC 372 Encl 

April 2010 process flows 

5b2. For all picklists lines with E use code DSS will 

• consolidate material 

• create local manifest 

•generate an Arrival Notification Status (870S) for assets received from network site->5c, 6a 

• Additional delivery information will be obtained from picklist table 

5c. Upon delivery or system parameters, local manifest will be closed and generate an Delivery Notification Status (870S) 

to DAASC-> 6a 

•DSS will obtain signature confirmation or badge number when required 

6a. DAASC receives the Material receipt, 527R (D6_) or 870S Arrival and Delivery Notification Status -> 6a1, 6a2 

•For MAT, DAASC will put the 527R (D6_) or 870S Arrival and Delivery Notification Status in NSY Pull Queue 

6a1. IF13 will receive and process 870S, Arrival and Delivery Notification Status and completes due in MPRII and sends 

trigger to update DIFMS and creates the 527R (DRA) to DAASC -> 7, 8 

6a2. PS I/O F will pull the 527R (D6A) and the 870S, Arrival and Delivery Notification Status from the DAASC NSY Pull 

Queue and pass to MAT -> 6a3 

6a3. MAT receives the 527R (D6A) and the 870S; updates MAT and COST, and creates the 527R(DRA) that is sent to the 

PS I/O F, which pushes the 527R(DRA) to DAASC ->7a 

7a. DAASC receives, validates and routes the 527R (DRA) to EBS ->7b 

7b. EBS receives 527R (DRA) data and updates sales order appropriately ->END 

8. IF14 receives the trigger and updates DIFMS for MRP II ->END