Attachment, Adendum ADC 1198A

Page 1 

Attachment to ADC 1198A 

Establishing and Maintaining Accountability for Service Owned Capital 

Equipment Stored at DLA Distribution Centers – (Missing Serial 

Numbers, and Remove 867I Issue Transaction) 

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: Enterprise Business Standards Office, Mr. Rafael Gonzalez, Mr. Ben

Breen, Ms. Ellen Hilert, and Ms. Mary Jane Johnson, email: DLMS.IUID@dla.mil 

b. Functional POC: DLA J345, Mr. James Weiner, email: james.c.weiner@dla.mil

2. FUNCTIONAL AREA:

a. Primary/Secondary Functional Area: Supply

b. Primary/Secondary Functional Process: Physical Inventory Control and Adjustments

3. REFERENCES:

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

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

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

4. APPROVED CHANGE(S): Substantive updates subsequent to staffing are highlighted in green.

a. Brief Overview of Change: ADC 1198 (Reference 3.a.) established the necessary DLM

4000.25, DLMS, Volume 2, (Reference 3.b.) procedures to include serialization data in all DLMS 

balance-affecting transactions for capital equipment candidate assets stored at Defense Logistics 

Agency (DLA) Distribution Centers. To manage serialization data for capital equipment candidates, 

the serial number is required in the DLMS transaction, and the unique item identifier (UII), must be 

included when available . During planning for implementation, the DLA Distribution Standard System 

(DSS) representatives identified a number of issues relating to the serial number and UII which require 

updates to the ADC 1198 DLMS procedures for capital equipment candidates. This addendum to 

ADC 1198 addresses those updates. 

This addendum addresses the following areas: 

(1) No Serial Number During Receipt. Document DLA Distribution Center

procedures for processing the receipt transaction when they receive a transaction with no serial number 

and the item does not contain a serial number. DLA cannot process the receipt for capital equipment 

based on the existing procedures in ADC 1198, which require a serial number ALL the time. 

(2) Missing Serial Number for an Item in Stock. Under ADC 1198, DLA and the

Services will develop memorandums of agreement to conduct the initial inventory (i.e., recording, 

creation and application of any required serial numbers and UIIs to bare item or packaging) of capital 

equipment candidate items stored at DLA Distribution Centers. This change addresses the scenario 
Attachment, Adendum ADC 1198A

Page 2

after that initial inventory, where no serial number is found on items in storage that policy requires be 

serialized.

(3) Reintroduction of IUID Items into the DOD Supply Chain. This change 

removes the ADC 1198 requirement for DLA/DSS to update the IUID Registry when an IUID item is 

reintroduced to DOD, as this is the materiel owner responsibility.

(4) DLA 867I Issue Transaction with Serial Number/UII. ADC 1198 includes 

wording directing, “The storage activity will include the serial numbers and UIIs when available on the 

DLMS 945A Materiel Release Confirmation and/or DLMS 867I Issue.” Due to timing of the 867I, 

this change removes the requirement to include the serial number/UII on the 867I Issue transaction for 

capital equipment items. 

Staffing Note: Services may continue optional use the 867I with serialized data for intra-Service use. 

For example, the Air Force noted an intra-Air Force requirement to use the 867I in a bearer walk 

through capability

(5) Clarification of Complete Inventory Requirement. This change clarifies the 

language in ADC 1198 regarding the need for a full physical inventory because of a UII/serial number 

mismatch. The conflict noted an inconsistency with the words “may necessitate a complete inventory” 

and “will necessitate a complete inventory” in subsequent paragraphs regarding whether a complete 

inventory is required to resolve serial number/UII issues.

(6) Serial Number/UII Mismatch Dual Inventory Adjustment Functionality. This 

change identifies scenarios and clarifies language in ADC 1198 and the Proposed Addendum 1198A 

regarding the guidance to identify the original “from” value and the corrected “to” value when 

performing a dual inventory adjustment for mismatched serial number/UII. The mismatched serial 

number/UII could be an issue identified during receipt or when an item is in storage. The revised 

guidance also notes the need for a dual inventory adjustment transaction to update the SCC for the 

suspended item.

b. Background:

(1) No Serial Number during Receipt. DLA Distribution may encounter a situation 

where a serial number is not available for an item at the time of receipt. ADC 1198 indicates that the 

distribution center must submit a supply discrepancy report (SDR) in this situation. However, DSS 

integrates receiving and SDR creation, with preparation of an SDR following recording of the receipt. 

Without the successful recording of the receipt, the process to create the SDR is not accessible to the 

receiver. DLA Distribution needs to be able to record the receipt for the item with a missing serial 

number and a way to obtain a serial number for proper tracking. 

(2) Missing Serial Numbers for an Item in Stock. DLA Distribution needs

procedures to follow when distribution center personnel locate an item that is subject to serial number 

reporting but no serial number is available (after the initial inventory of ALL capital equipment 

candidates stored at DLA Distribution Centers). ADC 1198 did not clarify the intent to use the storage 

quality control report (SQCR) process to report the missing serial number (e.g., the label fell off) to the 

owner and obtain the serial number for continued tracking of the item.

(3) Reintroduction of IUID Items into the DOD Supply Chain. A requirement in 

ADC 1198 addresses reintroduction of an IUID item previously shipped outside the control of the 

Department of Defense. ADC 1198 requires the receiving activity to update the IUID registry for 
Attachment, Adendum ADC 1198A

Page 3

items meeting this condition however; DLA Distribution Centers do not perform IUID registry 

updates. The owner must accomplish the IUID registry updates, as the receiving activity may not 

always know when an item is re-introduced to the DOD. 

(4) DLA 867I Issue Transaction with Serial Number/UII. ADC 1198 has wording 

directing “The storage activity will include the serial numbers and UIIs when available on the DLMS 

945A Materiel Release Confirmation and/or DLMS 867I Issue.” Subsequent to publication of ADC 

1198, the DLMS Program Office learned more about the timing of the 867I Issue transaction. The 

DLA Distribution Center sends the 867I Issue transaction immediately upon allocation. The issue 

reflects a record update for available inventory balance at the distribution center, but distribution center 

personnel have not yet physically selected the item from the storage location. Subsequently, the item 

unique identification cannot be in the Issue transaction. DLA Distribution Centers will include serial 

numbers and UIIs when available on the DLMS 945A Materiel Release Confirmation provided to the 

owner at the time of shipment. DLMS program Office confirmed that all Components are processing 

the DLMS 945A. Thus, the serial number/UII is neither available nor required on the 867I Issue 

transaction.

(5) Clarification of Complete Inventory Requirement. While reviewing 

requirements to implement ADC 1198, one of the Services questioned the wording regarding a 

physical inventory requirement relating to serial number/UII discrepancies involving materiel release 

confirmation from a storage activity and discovery that IUID data content (e.g. serial number/UII) for 

the owner is not consistent with IUID data content at the storage activity.

(a) Paragraph 4.d.(3).(l).1.a., contained conflicting background with subsequent 

sentences indicating “may necessitate a complete inventory” and “will necessitate a complete 

inventory” regarding serial number/UII when addressing whether a complete inventory (initiated by 

the owner/manager) be taken at all storage locations for all owners and supply condition codes. 

(b) For materiel managed at the UII/serial number level, there may be instances 

where the storage activity may need to conduct a full physical inventory resulting from a UII/serial 

number mismatch across all warehouses and/or sites in order to resolve the discrepancy. That level of 

effort is not required for every mismatch. The storage activity will initiate their research on-site and 

expand as necessary until the discrepancy is resolved. 

(6) Serial Number/UII Mismatch Dual Inventory Adjustment Functionality. 

Subsequent to the Component staffing of the Proposed Addendum to ADC 1198A, DLA Distribution 

requested clarification to process inventory adjustments when events such as care of supplies in storage 

(COSIS) or other actions identify issues with mismatched serial number and/or UII. An example of an 

in storage mismatch would be when the storage activity’s physical count matches the owner’s 

inventory record, but there is not a match with the serial number/UII. For a mismatch found in storage, 

the first dual inventory adjustment identifies the original “from” value and the corrected “to” value. 

The example of a mismatch during receipt would be where the shipping documentation or electronic

shipment notice contains a serial number/UII that does not match the serial number/UII identified 

during visual inspection and receipt process. Under the receipt scenario, no inventory adjustment will 

take place unless the owner responds to the SDR indicating of an error resulted in the distribution 

center posting the wrong information to the inventory record. 

(a) For missing serial number/UII, the first transaction for dual inventory 

adjustment identifies only the “to” value(s), listing missing serial number(s)/UII(s). A second 

transaction for dual inventory adjustment will update the SCC for the suspended item(s) under existing 
Attachment, Adendum ADC 1198A

Page 4

procedures. The separate inventory adjustment transaction is required because only one adjustment 

reason code can be identified per transaction.

(b) EBSO recognized that the original Proposed Addendum ADC 1198A did 

not fully document the data mapping in the DLMS 947I Implementation Convention (IC) necessary to 

accomplish a dual inventory adjustment. This change updates the DLMS 947 IC to clarify formatting 

requirements.

c. Requested Change in Detail: This change clarifies or augments select ADC 1198 

procedures. The DOD Components must implement these changes within AIS’ to provide visibility 

for items identified as capital equipment candidates. Revisions to the detailed procedures identified in 

ADC 1198 changed by this addendum to ADC 1198, are provided throughout DLM 4000.25, DLMS, 

Volume 2 in the affected chapters (Enclosure 2).

(1) No Serial Number during Receipt. In ADC 1198, paragraph 4.d.(3).(h) addressed 

several scenarios regarding receipt discrepancies and SDR procedures. This change amplifies the 

existing procedures for use when the distribution center cannot locate a serial number on the capital 

equipment item at the time of receipt.

(a) For redistribution/return of an item identified as a capital equipment 

candidate received with no serial number (or the serial number is damaged or otherwise unreadable), 

DLA Distribution Centers will process the receipt transaction for the item without a serial number, 

suspend the asset in Supply Condition Code (SCC) K, and submit an SDR to the owner. The SDR will 

cite one or more discrepancy codes indicating a missing serial number (Discrepancy Code U01-U03).

The SDR will identify the shipping activity to receive an information copy.

(b) For redistribution/return of an item identified as a capital equipment 

candidate received with corresponding shipment notice (DLMS 856, 856R, or 856S) containing the 

serial number, but without required serial number identification on the item, label, or documentation, 

DLA Distribution Centers will process the receipt, suspend the asset in SCC K, and submit the SDR as 

above. In addition, the SDR remarks will clarify the discrepancy further by stating: “Unable to 

validate serial number(s) contained in shipment notice due to missing serial number(s) on 

item/label/documentation.”

(c) For receipt of a capital equipment candidate from a procurement source, the 

procedures are the same as above except the DLA Distribution Center will suspend the asset in SCC L. 

If a contractually required IUID is missing, the SDR will also include Discrepancy Code U05 (Nonconformance to unique identification requirements under terms of contract).

(d) The distribution center will select the most pertinent discrepancy codes 

applicable to the missing serial number scenario. The following discrepancy codes apply to a missing 

serial number and/or UII.

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
Attachment, Adendum ADC 1198A

Page 5

(e) The owner is responsible to research and provide disposition instructions via 

SDR Reply. Upon determination of the appropriate serial number/UII, the owner’s SDR reply will 

include a request for an inventory adjustment to add the serial number (and the associated UII, if 

applicable) to the inventory record and appropriate remarking requirements. To accomplish this, the 

owner will use new SDR Reply Code 611, which is updated to explicitly expand its applicability to 

IUID. In addition, the owner’s SDR reply will identify Reply Code 603 (Remark and return to stock).

603 Remark and return to stock

611 Reidentify unique identification (UII/serial number) and return to stock

(f) Owners and distribution centers will follow existing time standards in 

MILSTRAP/DLMS for SDR resolution and re-identification of suspended materiel.

1

 

(g) Upon positive resolution of the preceding scenarios, the distribution center 

will prepare a DLMS 947I dual inventory adjustment transactions to add the serial number(s) and 

when available, the UII(s), and an additional 947I dual inventory adjustment transaction to update the 

SCC.

1. Establish new Quantity or Status Adjustment Reason Code AM for 

use when serial number and/or UII is missing, clarify procedures with updated wording in the DLMS 

947I and in DLMS Volume 2, Chapter 6, Inventory, paragraphs C6.13, and C17.3.8.4. This 

requirement was identified during the PDC comment period.

2. The DLA Distribution Center will prepare a DLMS 947I with 

Quantity or Status Adjustment Reason Code AM (2/W1901/0200) and Inventory Transaction Type

Code DU (2/W1916/0200). The transaction will contain one LX loop for each applicable item to 

identify its IUID data content thereby allowing missing values for multiple items to be added using a 

single dual inventory adjustment transaction.

3. A dual inventory adjustment transaction will also be required to cite 

the impacted serial numbers/UIIs to update the suspended item(s) from the suspended SCC to the 

appropriate SCC (using existing Quantity or Status Adjustment Reason Code AC). 

(2) Missing Serial Numbers for Item in Stock. In the scenario where a serial number 

is not available at a future time for an item in storage (for example, label fall off or otherwise went 

missing), procedures similar to those for SDRs will apply. If the distribution center is able to perform

research to identify the applicable serial number/UII, the distribution center will prepare an SQCR with 

the applicable discrepancy code(s). This will be an informational SQCR used to record associated 

labor and material costs. If the distribution center is unable to identify the applicable serial 

number/UII with certainty, the distribution center will prepare an SQCR with the applicable 

discrepancy code(s), suspend the asset in SCC J, and request the owner provide assistance in 

identifying the asset. Upon identification of the correct serial number/UII, the distribution center will 

follow the procedures previously identified in paragraph 4.c.(1).(g). Clarify with updated wording in 

the DLMS 947I and DLMS Volume 2, Chapter 6, Inventory, paragraphs C6.13

 1 The DLMS/MILSTRAP guidance in Vol 2, Chapter 7 is “C7.2.4.2.1. Reclassification Timeframe for SCC K Suspended 

(Returns). With the exception of ammunition, complete the reclassification of materiel reported in SCC K within 80 

calendar days after reporting the discrepant receipt via SDR. Owner/managers will provide timely disposition 

instructions for materiel in a suspended condition to promote rapid reclassification of materiel (with a maximum of 50 

days for provision of owner/manager disposition instructions and 30 days for storage activity reclassification).”
Attachment, Adendum ADC 1198A

Page 6

(3) Reintroduction of IUID Items into the DOD Supply Chain. Revise procedures

to reflect owner responsibility for IUID registry updates. Update Chapter 13 narrative as shown in 

Enclosure 2. Changes to the narrative originally published in ADC 1198 paragraph 4.d.(3).(i) are 

shown below:

“(i). Reintroduction of an IUID item previously shipped outside the control of the 

Department of Defense. In support of FIAR compliance, capital equipment candidates require 

serialization data visibility when such items previously shipped outside DOD control are 

reintroduced to DOD control. In this case the receiving activity will report the receipt including 

serial number(s) and UII(s) (when available) to the owner. The receiving activity will submit the 

receipt using DLMS 527R Receipt transaction including the serial numbers and UII(s) (when 

available) to the owner. The receiving activity owner will update the IUID registry using 

existing IUID registry procedures.”

(4) DLA Distribution Issue Transaction and Serial Number/UII in 867I. This 

change removes the ADC 1198 requirement to include the serial number/UII on 867I Issue 

transactions. The existing requirement to include the serial number/UII on the 945A MRC satisfies the 

requirement to update the owner record. Changes from the text originally published in ADC 1198, 

(paragraph 4.d.(3).(f.) are shown below:

“(f) Storage Activity Materiel Release Advice/Confirmation and Issue. In support of 

FIAR and, DODI 5000.64, Accountability and Management of DOD Equipment and Other 

Accountable Property, May 19, 2011, compliance, capital equipment candidates require 

serialization data visibility. Issue Materiel Release Advice/Materiel Release Confirmation 

transactions will require the serial number and include the UII (when available).

1. Issues. The shipping activity will confirm materiel release to the owner and 

report shipped serial numbers and UIIs for capital equipment candidate items. The storage 

activity will transmit a DLMS 867I Issue and/or a Materiel Release Confirmation (DLMS 945A) 

using only the 4030 version) in accordance with the DLM 4000.25, Volume 2, Chapter 4 

procedures with the inclusion of the serial numbers and UIIs shipped.

2. The shipping activity will report serial numbers and UIIs (when available) to 

the owner, for shipment of items to demilitarization and/or disposal of capital equipment 

candidate items. The storage activity will include the serial numbers and UIIs (when available) 

on the DLMS 945A Materiel Release Confirmation and/or DLMS 867I Issue.”

(5) Clarification of Complete Inventory Requirement. Revise the ADC 1198 

change for DLMS, Volume 2, Chapter 6, paragraph C6.13.2.2 updating “will” to “may”. The 

remaining Chapter 6 changes in ADC 1198 appropriately reflect, “may necessitate a complete 

inventory” for this scenario. To clarify the requirement, the ADC wording from ADC 1198, paragraph 

4.d.(3).(i).1.a. is updated as shown below. See Enclosure 2 for updated Chapter 6 text.

“l. Physical Inventory Processes. In support of FIAR compliance, 

capital equipment candidates require serialization data visibility. The procedures for processing 

and reporting transactions to maintain Physical Inventory Control in DLM 4000.25, Volume 2, 

Chapter 6 apply with the following additions:

a. Owner/manager processing of a materiel release confirmation 

(DLMS 945A) from a storage activity where the owner does not have a record of that serial number 
Attachment, Adendum ADC 1198A

Page 7

and UII (when available) or the owner/manager records have that serial number and UII located at 

other than the storage activity reporting the release/issue of the item. In support of FIAR compliance, 

capital equipment candidates, requiring serialization data visibility, either of these conditions will may

necessitate a complete inventory (initiated by the owner/manager) be taken at all storage locations for 

all owners and supply condition codes. For serial number/UII mismatch, the storage activity and the 

owner will need to collaborate to ensure appropriate steps are taken to resolve the discrepancy. In 

support of FIAR compliance, capital equipment candidates, requiring serialization data visibility, it 

may be necessary to conduct a complete inventory (initiated by the owner/manager) at all storage 

locations for all owners and supply condition codes. DOD Components and storage activities will 

need to develop internal procedures to initiate the appropriate physical inventory at one or more 

storage activities for the affected NSN.”

(6) Serial Number/UII Mismatch Dual Inventory Adjustment Functionality. For 

an inventory adjustment resulting solely from a serial number and/or UII mismatch, a dual inventory 

adjustment transaction is required for each item to identify, the (original) “from” and (corrected) “to” 

serial number/UII. 

(a) Use a DLMS 947I with Quantity or Status Adjustment Reason Code AQ 

(2/W1901/0200) and Inventory Transaction Type Code DU (2/W1916/0200) associated with a single 

item. The transaction will contain only two LX loops per transaction to identify the IUID data content. 

The first LX loop citing numeric 1 will contain the "from" (original) IUID and the second LX loop 

citing numeric 2 will contain the “to” (corrected) IUID. When an original item identification includes 

both serial number and UII, both values must be included in the dual inventory adjustment.

(b) A dual inventory adjustment transaction is required to update the suspended 

item to the appropriate SCC. 

(c) Clarify with updated wording in DLMS Volume 2, Chapter 6, Inventory, 

paragraphs C6.13.5.2 and Chapter 21, Stock Readiness, paragraphs C21.4.8.1

d. Revisions to DLM 4000.25 Manuals:

(1) Revise DLM 4000.25, DLMS, Volume 2, Supply Standards and Procedures, to add 

additional text to the DLMS chapters as shown in Enclosure 2.

(2) Revise DLMS Volume 2, Supply Standards and Procedures,

Chapter 7, Inventory Adjustments to update Table C7.T1. Quantity or Status Adjustment Reason 

Code with a new code:

Table C7.T1. DLSS DIC/DLMS Quantity or Status Adjustment Reason Code Correlation

W1901 Quantity 

or Status 

Adjustment 

Reason Code

Explanation Corresponding 

MILSTRAP

legacy DIC

AM Inventory Adjustment (UII and/or serial number 

missing). Gain, loss or dual adjustment resulting 

solely from UII and/or serial number missing

Not Applicable. 

No corresponding 

legacy DIC.
Attachment, Adendum ADC 1198A

Page 8

(3) Revise DLMS Volume 2, Appendix 7.28, Supply Discrepancy Report Relevant 

Data Elements, and Appendix 7.29, Stock Readiness Relevant Data Elements, to add a new Reply 

Code as shown above.

e. Proposed Transaction Flow: No changes are required to existing transaction flows. This 

change addresses inclusion of serial numbers, and UIIs (when available), into the existing logistics 

transactions noted herein for the capital equipment requirements identified.

f. Alternatives: None. Without the changes, gaps will persist in DLA procedures that affect 

the accountability records for capital equipment items.

5. REASON FOR CHANGE: While planning for the system changes associated with ADC 1198, 

DLA identified a number of procedural issues that needed to be resolved. This change addresses 

viable solutions that minimize the impact on Service logistics information systems. 

6. ADVANTAGES AND DISADVANTAGES:

a. Advantages: 

(1) Provides Services with the unique capital equipment candidate visibility required to 

meet FIAR requirements (i.e. auditable).

(2) This change leverages existing procedures for reporting discrepancies and reidentifying materiel to resolve the procedural gap identified for missing serial numbers at time of 

receipt or later while the item is in storage. 

b. Disadvantages: None

7. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: Process changes will be effective 

upon approval of this change. 

a. DLA should provide an estimated date for system changes necessary for implementation.

b. Services should provide an estimated implementation date for corresponding system 

changes necessary for processing transactions as authorized with DLA Distribution under this change

8. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH IMPLEMENTATION 

OF THIS CHANGE: This change will enable DLMS compliant Services to meet 2017 FIAR 

requirements. Implementation of this change is not intended as an attempt to save or avoid costs and 

no known saving/cost avoidance were identified.

9. IMPACT:

a. New DLMS Data Elements: None identified

b. Changes to DLMS Data Elements:

(1) Quantity or Status Adjustment Reason Code, ASC X12 Date Element ID 181, 

Quantity of Status Adjustment Reason Code:
Attachment, Adendum ADC 1198A

Page 9

(a) EBSO established new local code value in LOGDRMS for Data Element ID 

181: AM - Inventory Adjustment (UII and/or serial number missing). Gain, loss or dual adjustment 

resulting solely from UII and/or serial number missing. 

(b) EBSO will submit a code maintenance request to establish a new value for 

ASC X12 Data Element ID 181 Quantity or Status Adjustment Reason Code: AM – Inventory 

Adjustment (UII and/or serial number missing) 

(2) Add new Reply Code 611 and definition as described above.

c. Automated Information Systems (AIS): DLA Distribution and Service AISs receiving the 

DLMS transactions cited in this change with serialization data to include the serial number and UII 

(when available) for Service owned capital equipment and capital equipment candidates stored at DLA 

Distribution Centers must recognize and use the updated procedures

d. Defense Automatic Addressing System (DAAS):

(1) WebSDR must update reply code tables; no other changes identified.

(2) Update DAAS maps for DLMS 947I Inventory Adjustment.

e. Non-DLM 4000.25 Series Publications: Components should review Component level 

publications and update as necessary.

10. PDC 1198A Supply Process Review Committee Comments :

Originator Comment Disposition

1. Air Force Concur without comment. Noted.

2. Marine 

Corps

Concur without comment. Noted.

3. DLA DLA identified several items to address in 

ADC 1198A. 

1. Paragraph 4.c.1.(d) contained a staffing 

note for DLA to allow up to three 

discrepancy codes per SDR prepared by the 

distribution centers. DLA action was 

completed prior to PDC staffing.. 

2. DLA requested that ADC 1198A be 

updated to include specific procedures to 

document the serial number and when 

available the UII when doing inventory 

adjustments for:

a. Missing serial number upon receipt

b. Mismatch serial number/UII found 

during an inventory or other event

c. Missing serial number/UII identified 

during an inventory or other event.

Removed Staffing Note

Procedures and DLMS 947 I were 

updated to address the issues identified 

by DLA
Enclosure 1, Adendum ADC 1198A

DLMS IC Updates

Page 1

Enclosure 1 to ADC 1198A

DLMS Implementation Convention (IC) Change Tables

Changes identified by bold italics or double strike-through to remove text added by ADC 1198.

A. 867I Issue 

# Location DLMS 867I Issue 

Revision

Reason

1. DLMS 

Introductory 

Notes

Remove ADC 1198 from DLMS Introductory Notes:

- ADC 1198, Establishing Visibility of Capital Equipment 

for Service Owned Assets Stored at DLA Distribution 

Centers.

Add ADC 1198A: 

ADC 1198A, Establishing and Maintaining Accountability 

for Service Owned Capital Equipment Stored at DLA 

Distribution Centers – (Missing Serial Numbers, and 

Remove 867I Issue Transaction)

Removes ADC 

1198 Text from the 

Segment note. 

Adds Proposed 

Addendum to 

ADC 1198A.

2. 2/REF/290 Revise and remove the DLMS notes as shown, and renumber 

the remaining notes. 

DLMS Note:

1. The 2/REF/290 loop is authorized for intra-Component use 

in Issue transactions when the item identified is subject to UIT 

requirements. Also authorized in support of Financial 

Improvement and Audit Readiness (FIAR) compliance for 

accountability and management of capital equipment. Refer to 

ADC 1198.

2. This transaction will support item identification based upon 

the UII or and the serial number. This transaction also 

provides for use of a batch/lot number, when applicable.

3. In support of FIAR compliance, capital equipment 

candidates require serialization data visibility. Prepare issue 

transactions for capital equipment using the serial number. 

Include the UII when available.

4. Use multiple iterations of 2/REF/290 segment within the 

2/LX/280 loop, to provide identifying information for an item 

as needed.

Removes ADC 1198 

Text from the Segment 

note.
Enclosure 1, Adendum ADC 1198A

DLMS IC Updates

Page 2

A. 947I Inventory Adjustment 

# Location DLMS 947I Inventory Adjustment

Revision

Reason

1. DLMS 

Introductory 

Notes on IC 

cover page.

Add ADC 1198A to DLMS Introductory Note 4: 

ADC 1198A, Establishing and Maintaining 

Accountability for Service Owned Capital Equipment 

Stored at DLA Distribution Centers – (Missing Serial 

Numbers, and Remove 867I Issue Transaction)

Adds Approved 

Addendum to ADC 

1198A.

2 2/W1901/0200 Delete Federal Note:

Federal Note: Use any code.

Add new Code AM with DLMS note:

AM Missing Unique Item Identifier (UII)/Serial Number

DLMS Note:

1. Inventory Adjustment (UII and/or serial number 

missing). Gain, loss or dual adjustment resulting solely from 

UII and/or serial number missing. 

2. At this time, a local code AM is established for use in the 

947I, version 4030. A data maintenance action has been 

submitted for establishment of AM - Missing Unique Item 

Identifier (UII)/Serial Number Mismatch in a future version. 

Refer to ADC 1198A.

Administrative update.

Needed to support the 

capture of additive 

costs and adjustments 

due to management by 

UII and/or serial 

number

2/W1902/0200 Change Federal Note to DLMS Note 1 and revise; renumber 

existing DLMS Notes.

Credit/Debit Quantity

1. This is the quantity applicable to the inventory adjustment. 

Express as a whole number with no decimals.

Clarification.

2. 2/W1916/0200 Modify DLMS Note for existing Code DU:

DU Inventory Adjustment – Dual

DLMS Note:

Use with W1901 Codes AC, AD, and AG, AM and AQ to 

indicate a dual inventory adjustment transaction, (e.g., both 

an inventory decrease and increase). Use requires that W1902 

quantity be expressed as a positive number. (W1901 Codes 

AC, AD, and AG correspond respectively to the following 

MILSTRAP legacy DIC functionality: DAC, DAD, DAS

functionality). There is no corresponding legacy DIC 

functionality for codes AM and AQ.

Clarification.

3. 2/LX/1500 Modify LX Segment Level Notes:

1. Use the LX segment as a counter to identify the number of 

2/LX/1500 loop iterations in the transaction set.

2. At this time, The 2/LX/1500 loop (Loop ID 0330) is not 

authorized for use to provide item unique identification (IUID)

data or Unique Item Tracking (UIT) information, except as 

noted in these segment level notes. Use is only authorized for 

the UIT program items for Positive Inventory Control (PIC) 

Nuclear Weapon Related Materiel (NWRM) (UIT Designator 

AAJ), as documented in ADC 347. A PDC must be submitted 

Updated for new procedures.
Enclosure 1, Adendum ADC 1198A

DLMS IC Updates

Page 3

# Location DLMS 947I Inventory Adjustment

Revision

Reason

documenting requirement and procedures before using this 

transaction for IUID or UIT for any other UIT purpose.

3. With the exception of dual inventory adjustments for UII 

and/or serial number mismatch (2/W1901/0200 Code AQ), 

the 2/LX/1500 loop is repeated for each item to be uniquely 

identified and provides flexibility to accommodate tracking by 

UII or and serial number. 

4. For dual inventory adjustments with a UII and/or serial 

number mismatch (2/W1901/0200 Code AQ), the 2/LX/1500 

loop is repeated for “from” (original) and “to” (corrected) 

IUID information for the a single item. 

5. May use the 2/LX/1500 loop to provide batch/lot number 

information.

6. Authorized for use under DoD IUID policy for 

accountability and management of capital equipment. Refer 

to ADC 1198.

7. Except as noted, the entire 2/LX/1500 loop is a DLMS 

enhancement. See introductory DLMS note 4a.

4. 2/LX01/1500 Revise and number the existing Data Element note, and add 

new notes 2 - 5: 

Federal DLMS Note: 

1. In the first 2/LX/150 loop iteration, cite numeric 1. In each 

subsequent loop iteration, increase incrementally by 1.

2. For a dual adjustment resulting solely from UII, and/or 

serial number mismatch (Quantity or Status Adjustment 

Reason Code AQ (2/W1901/0200) with Inventory 

Transaction Type Code DU (2/W1916/0200) associated with 

a single item (adjustment quantity (2/W1902/0200) must 

equal 1), use only two LX loops per transaction to identify 

the IUID data content. Use LX01 citing numeric 1 for the 

"from" (original) IUID and use LX01 citing numeric 2 for 

the "to" (corrected) IUID. Refer to ADC 1198A

3. For a dual adjustment resulting solely from a Batch/Lot 

number mismatch, use the procedures in the preceding note.

4. For a dual adjustment resulting from missing UII, and/or 

serial number (Quantity or Status Adjustment Reason Code 

AM (2/W1901/0200) with Inventory Transaction Type Code 

DU (2/W1916/0200) associated with one or more items, use 

multiple LX loops as needed. Continue using a new LX loop 

with sequential numbering for each additional item adjusted 

for missing IUID . Refer to ADC 1198A

5. For a dual adjustment resulting solely from a missing 

Batch/Lot number, use the procedures in the preceding note.

Provides capability to 

identify the “from” and “to” 

IUID data to correct a 

mismatch using a dual 

adjustment
Enclosure 1, Adendum ADC 1198A

DLMS IC Updates

Page 4

# Location DLMS 947I Inventory Adjustment

Revision

Reason

5. 2/N9/1600 Delete Federal Note: 

1. Use to provide Item Unique Identification (IUID) 

information for the purpose of Unique Item Tracking (UIT).

Revise DLMS Notes: 

1. The 2/N9/1600 segment is authorized for use in Inventory 

Adjustment transactions to provide Item Unique 

Identification (IUID) data as noted here. when the item 

identified is subject to UIT and other approved IUID Program 

requirements. Also authorized in support of Financial 

Improvement and Audit Readiness (FIAR) compliance for 

accountability and management of capital equipment.

2. This segment supports item identification based upon the 

UII and or the serial number. This segment also provides for 

use of a batch/lot number, when applicable. If UII and serial 

number, and/or batch/lot number, are required for the item, 

enter the UII in N901, and enter the serial number and/or 

batch/lot number in N907. If UII is not used, enter the serial 

number in N901and enter the batch/lot number in N907. If 

only batch/lot number is required, enter the batch/lot number 

in N901.

3. Use multiple iterations of 2/N9/1600 segment within the 

2/LX/1500 loop, to provide identifying information for an item 

as needed.

 -- When used for a dual adjustment resulting from UII, 

serial number or batch/lot number mismatch, the first 

iteration of the 2/LX/1500 loop will contain the "from" 

(original) IUID or Batch/Lot and the second iteration will 

contain the "to" (corrected) IUID or Batch/Lot for the same 

item.

 -- When used for a dual adjustment resulting from missing 

UII, serial number, or batch/lot number, use multiple 

iterations of the 2/LX/1500 loop to identify the missing IUID 

or Batch/Lot for each item.

4. Capital equipment candidates require serialization data 

visibility. Prepare inventory adjustment transactions for capital 

equipment using the serial number and when available, include 

the UII. Refer to ADC 1198.

5. Use in CAV inventory adjustment (Condition Code)

transactions to identify part numbers required to complete the 

repair/overhaul action and to provide an estimated receipt date 

for each item.

6. Except as noted, this is a DLMS enhancement. See 

introductory DLMS note 4a.
Enclosure 1, Adendum ADC 1198A

DLMS IC Updates

Page 5

# Location DLMS 947I Inventory Adjustment

Revision

Reason

2/N901/1600 Modify the notes for the following qualifiers

BT Batch Number

1. Use to identify the manufacturer’s batch/lot, or other 

number identifying the production run when UII and or serial 

number are not required. If UII and/or serial number are 

required in addition to the batch/lot number, enter the 

batch/lot number, enter the batch/lot number in N907. The

batch/lot number may not exceed 20 characters in accordance 

with IUID policy.

2. DLMS enhancement. See introductory DLMS note 4a.

SE Serial Number

DLMS Note:

1. Use to identify the serial number when UII is not required. 

If UII is required in addition to the serial number, enter the 

serial number in N907. The serial number may not exceed 30 

characters in accordance with IUID policy

2. Except as noted, this is a DLMS enhancement. See 

introductory DLMS note 4a.

3. Authorized for use by CAV.

U3 Unique Supplier Identification Number (USIN)

DLMS Note:

1. Use to identify the UII. The UII may not exceed 50 

characters in accordance with IUID Policy. An ANSI data 

maintenance was approved in version 5020. The approved 

code/name is “UII-Department of Defense Unique Item 

Identifier”.

2. Except as noted, this is an Authorized DLMS migration

enhancement. See DLMS introductory note 4a4e.

Identifies specific 

mapping placement for 

the batch number and 

serial number when a 

UII is provided. 

Clarification.

Administrative updates 

to DLMS enhancement 

notes.

Administrative update to 

remove repetitive 

DLMS note 3. CAV use 

is identified at segment 

level note.

No change for U3 

Notes, provided for 

context

N907-01 Add SE, BT and DLMS Notes

BT Batch Number

DLMS Note

Use to identify the manufacturer’s batch/lot, or other 

number identifying the production run when UII or serial 

number is entered in N901 and batch/lot is the only other 

identifying number in 2/N901/1600. The batch/lot number 

may not exceed 20 characters in accordance with IUID 

policy.

SE Serial Number

DLMS Note

Use to identify the serial number when UII is entered in 

N901. The serial number may not exceed 30 characters in

accordance with IUID policy.

Adds capability to link 

the batch number and 

serial number when a 

UII is provided
Enclosure 1, Proposed Adendum ADC 1198A

DLM 4000.25, Updates

Page 1

Enclosure 2 to ADC 1198A

DLMS Volume 2 Changes

Addendum to ADC 1198A changes are shown in red bold italics. The relevant ADC 1198 changes are 

included in bold italics to help to clarify the new changes.

C6. CHAPTER 6. PHYSICAL INVENTORY CONTROL

(Intervening text not shown)

C6.13.2.2. Owner/manager processing receipts, issues, or inventory adjustments from 

storage activities where there is a mismatch on serial number (and UII if available) 

between the owner records and storage activity transactions reporting which serial 

number (and UII if available) will may at a minimum necessitate an inventory and 

research to resolve the discrepancy.

(Intervening text not shown)

C6.13.5. Capital Equipment Candidates Inventory Adjustments. The inventory 

adjustment function encompasses increases, decreases, or dual adjustments. The 

C6.4 procedures for processing and reporting of Inventory Adjustments (Physical 

Inventory) also apply to apply to Inventory Adjustments (UII and/or Serial Number 

Mismatch) with the following additions:

C6.13.5.1. Capital equipment candidate items inventory adjustment gain, 

loss, or dual adjustment transactions will include the serial number (and UII if 

available). Adjustments due solely to the need to correct serial number and/or UIIs will 

always be for a quantity of 1.

C6.13.5.2. Capital equipment candidate items where a discrepancy exists 

solely on mismatched serial number and/or UII will include Quantity or Status 

Adjustment Reason Code AQ (Inventory Adjustment (UII and/or serial number 

mismatch)) in the inventory adjustment transaction, Chapter 7, Table C7.T1 contains 

the quantity or status adjustment reason codes. Two inventory adjustment 

transactions are required to correct the mandatory serial number and, when available, 

the associated UII, and to update the SCC. 

C6.13.5.2.1. The storage activity will prepare a separate dual inventory 

adjustment transaction for each item to identify the original “from” and corrected “to”

IUID values. Only one item will be identified in each dual inventory adjustment.

C6.5.2.2.2 A dual inventory adjustment transaction will be required to 

cite the impacted serial number(s)/UII(s) to update the suspended item(s) from the 

suspended SCC to the appropriate SCC.
Enclosure 1, Proposed Adendum ADC 1198A

DLM 4000.25, Updates

Page 2

C6.13.5.3. Capital equipment candidate items where a discrepancy exists 

solely on missing serial number and/or UII will include Quantity or Status Adjustment 

Reason Code AM (Inventory Adjustment (UII and/or serial number missing)) in the 

inventory adjustment transaction, Chapter 7, Table C7.T1 contains the quantity or 

status adjustment reason codes. Two inventory adjustment transactions are required 

to identify the mandatory serial number and, when available, the associated UII, and to 

update the SCC.

C6.13.5.2.1. The storage activity will prepare a dual inventory 

adjustment transaction to identify missing IUID values for each applicable item. 

Multiple items may be identified in each dual inventory adjustment transaction.

C6.5.2.2.2 A dual inventory adjustment transaction will be required to 

cite the impacted serial number(s)/UII(s) to update the suspended item(s) from the 

suspended SCC to the appropriate SCC.

C6.13.6. Research of Potential or Actual Inventory Adjustments (UII and/or serial 

number mismatch) (DLMS 947I with Quantity or Status Adjustment Reason Code AQ)

C6.13.6.1. DoD Components will ensure that potential or actual inventory 

adjustments for capital equipment candidate items that result in an inventory 

adjustment are reported with Quantity or Status Adjustment Reason Code AQ and are 

researched in accordance with the procedures paragraph C6.4. 

C6.13.6.2. Due to the value of capital equipment candidate items, 

discrepancies will always require the most demanding research requirements set forth 

in Table C6.T3.

C13. CHAPTER 13. MATERIEL RECEIPT

Preceding text not shown)

C13.1.4. Use of DLMS 527R for Receipt. DLMS 527R will be used by receiving 

activities to report both receipts and historical receipt information to owners and other 

management control activities. 

C13.1.5. Capital Equipment Candidate Receipts. In support of Financial 

Improvement and Audit Readiness (FIAR) compliance for accountability and 

management of capital equipment, capital equipment candidates require serialization 

data visibility. Submitters must prepare receipts for capital equipment candidate items 

to include the serial numbers (and UIIs if available). The DSS storage activity will send 

the receipt transaction to the owner and include the serialized data for the owner 

records. The owner will update the IUID registry using existing IUID registry 

procedures.

(Intervening text not shown)

C13.2.8.2.1. Discrepancy Determination. Upon receipt of all incoming materiel 

shipments, from procurement instrument and non-procurement instrument sources, receiving 

activities will research all available documentation and item markings (i.e., transaction or 
Enclosure 1, Proposed Adendum ADC 1198A

DLM 4000.25, Updates

Page 3

contract number, national stock number (NSN), or other, item identification number, ARI file, 

quantity, condition, inspection/acceptance requirements, etc.) to determine the receipt data. 

Using this data, receiving activities will determine if a discrepancy/deficiency (hereafter 

referred to as discrepancy or discrepant) exists and will identify its nature. For capital 

equipment candidate items, missing serial number(s) and mismatches on serial 

number (and UII) will be considered discrepancies.

C14. CHAPTER 14. ISSUE, LOAN, DEMAND, AND SINGLE MANAGER FOR 

CONVENTIONAL AMMUNITION FREEZE/UNFREEZE ACTION

(Preceding text not shown)

C14.2.1.1.4. Capital Equipment Candidate Issues. In support of 

Financial Improvement and Audit Readiness (FIAR) compliance for accountability and 

management of capital equipment, capital equipment candidates require serialization 

data visibility. Submitters must prepare issue transactions for capital equipment

candidate items to include the serial number(s) (and UII(s) if available). 

C17. CHAPTER 17. SUPPLY DISCREPANCY REPORTING 

(Preceding text not shown)

C17.3.8. Discrepancies in Item Unique Identification (IUID) Data.

2 

C17.3.8.1. Report supply-related discrepancies involving IUID under DoD IUID 

Supply policy, including but not limited to Unique Item Tracking (UIT) programs, capital 

equipment candidates, or as contractually required. SDRs identifying discrepancies in 

unique identification will be prepared citing both UII and/or corresponding serial number, 

when both are available. Applicability under DoD IUID Supply Policy is identified by NSNs 

with IUID Indicator Yes (Y). For missing or mismatched unique item identification of items 

that are DoD serially-managed/tracked, use the applicable U-series discrepancy code (see 

Table C17.T1.). Report missing or mismatched materiel identification unrelated to IUID (e.g. 

missing or mismatched part number or NSN) using the applicable packaging 

(labeling/marking), documentation, technical data, or wrong item discrepancy code(s). 

Report quality-related deficiencies involving IUID, (e.g., improperly constructed unique item 

identifier within the 2D data matrix), using Product Quality Deficiency Report (PQDR) 

procedures under DLA Regulation 4155.24, et al. 

Staffing Note: ADC 1198 revision moved down to new paragraph C17.3.8.4. 

C17.3.8.2. In order to facilitate reporting of discrepancies, particularly those 

involving discrepancies where inclusion of the IUID information is required/desirable, the SDR 

submission process should be integrated with the receiving process, allowing receipt data to 

be captured once and reused. IUID discrepancies may be related to the packaging label, 

including automated information technology (AIT) readable content; the item marking, 

including AIT readable marks; supply documentation; the due-in record; and/or a mismatch 

between the item and any of these. When reporting an IUID mismatch (including shortage, 

overage, and incorrect item) the IUID content may be specifically identified as applicable to 

 2 Refer to ADC 1030.
Enclosure 1, Proposed Adendum ADC 1198A

DLM 4000.25, Updates

Page 4

items received or not received using the IUID Received/Not Received Indicator. If the SDR

does not include the If no indicator is provided, the UII and/or serial number will be 

interpreted as applicable to the materiel received. Pending integrated capability to support 

IUID reporting in SDRs, the submitter should include remarks text may also be used to 

clarify the specific mismatched data. Additionally, attachment files may be 

uploaded/transmitted to DoD WebSDR to identify UIIs and/or serial numbers. 

C17.3.8.3. Discrepancies involving missing or mismatched unique identification 

identified during receipt of new procurement materiel (including direct vendor delivery (DVD)) 

must be reported prior to acceptance. Receipt new procurement materiel requiring IUID or 

serial number tracking may be placed in a suspended condition pending resolution. 

Discrepancies that result in incorrect information within the IUID registry at DLA Logistics 

Information Service must be reported by the receiving activity for corrective action. Pending 

development of procedures for direct routing of SDRs to DLA Logistics Information Service, 

send an email to the DLA Logistics Information Service IUID Help Desk 

(iuid.helpdesk@bpn.gov). Missing IUID content in DLMS transactions will not be reported for 

stock shipments pending full transition to DoD IUID Supply Policy procedures except as 

applicable to UIT programs and capital equipment candidates. The materiel owner is 

responsible for IUID Registry updates associated with discrepancies for mismatched 

IUID information.

C17.3.8.4. In support of Financial Improvement and Audit Readiness (FIAR) 

compliance for accountability and management of capital equipment, capital 

equipment candidates require serialization data visibility. 3 Thus, capital equipment 

candidates 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. Submitters must prepare discrepancy reports citing the applicable serial 

number(s) and include the UII when available. For redistribution/returns, DLA 

Distribution Centers will receipt capital equipment candidates without a serial number 

in SCC K and submit the SDR. Cite the applicable discrepancy code and provide 

clarifying remarks with descriptive information for the item received. If the distribution 

center cannot validate the serial number contained in the associated shipment notice 

using the IUID marking on the item or packaging, the distribution center will include 

remarks clarifying this situation. The materiel owner is responsible for determining 

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

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, 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.

(Intervening text not shown)

C17.3.8.8. Table C17.T1 provides a decision matrix for the principal scenarios

when an SDR is required based on missing or mismatched IUID data during receipt 

processing. Current guidance requires UIT and capital equipment candidate 

discrepancy reporting based upon missing or mismatched serial numbers (rather than 

 3 Refer to ADC 1198/PDC 1198A
Enclosure 1, Proposed Adendum ADC 1198A

DLM 4000.25, Updates

Page 5

UII) pending full implementation of IUID requirements, UII will be included when 

available.

Table C17.T1. SDR Decision Matrix: Discrepant IUID Data (IUID Indicator Y)

Procurement 

Source

(IUID 

contractually 

required)

Approved 

UIT

Capital 

Equipment 

Candidate 

(DLA 

Distribution

Receipt) 4

Wrong 

Item 

Received 

w/IUID 

Indicator 

Y

Missing 

UII IUID

on (item or 

packaging)

Mismatch 

UII IUID

with 

shortage/ 

overage

Mismatch 

UII IUID no 

shortage/ 

overage

Create 

SDR

SDR 

Action 

Code

Y Y/N Y/N N N Y N Y 1A or 2A

Y Y/N Y/N N N N Y Y 1A

Y Y/N Y/N N Y N N Y 1A

Y Y/N Y/N N N N Y Y 1A

Y Y/N Y/N N Y N N Y 1A

Y/N Y/N Y/N Y Y/N Y/N Y/N Y 1A or 2A

N N N N N N Y Y 3B

N N N N N Y N Y 1A or 2A

N N N N Y N N N No SDR

N Y N N N N Y Y 1A

N Y N N N Y N Y 1A or 2A

N Y N N Y N N Y 1A or 3B

N N Y N N N Y Y 1A

N N Y N N Y N Y 1A

N N Y N Y N N Y 1A

____________

4 Refer to PDC 1198A. 

CHAPTER 21, STOCK READINESS 

(Preceding text not shown)

C21.4.7. The storage activity will provide materiel identification by NSN manufacturer’s 

CAGE/part number, or other form of materiel identification authorized by the DLMS format. It 

will also support identification by description if needed. Data content is comparable to the DD 

Form 1225. When applicable, the report will include the stock screening request reference 

number as a cross-reference between the screening request and the resulting SQCR. The 

SQCR will use up to two discrepancy codes to identify the non-conformance situation. It 

provides the estimated/actual cost for repair or repackaging. Item unique identification (IUID) 

data requirements will be populated on the SQCR in accordance with DoD Supply Policy 

when NSNs have an IUID Indicator Y.
Enclosure 1, Proposed Adendum ADC 1198A

DLM 4000.25, Updates

Page 6

C21.4.8. Missing Serial Number

C21.4.8.1. In support of Financial Improvement and Audit Readiness (FIAR) 

compliance for accountability and management of capital equipment, capital 

equipment candidates require serialization data visibility. Thus, capital equipment 

candidates located in storage without a serial number will not only require an SQCR, 

but will stop the equipment in the supply chain until a serial number is identified and 

the materiel is marked. Distribution centers must suspend the item in SCC J and 

prepare an SQCR. Cite the applicable discrepancy code and provide clarifying 

remarks with descriptive information for the item. If the storage activity is unable to 

determine the missing serial number from inventory records, the materiel owner is 

responsible for determining the appropriate serial number and providing disposition 

for marking the item (Reply Code 611).

4

 4 Refer to PDC 1198A