405 Andrews Road, Trevose, PA 19053 (800) 359-6200

405 Andrews Road, Trevose, PA 19053 (800) 359-6200

INDUSTRIAL SUPPLIES COMPANY

COMMITTED TO QUALITY

OVERVIEW

INDUSTRIAL SUPPLIES COMPANY (ISCO) is an Industrial Distributor of maintenance, repair, operational and production (MROP) supplies headquartered in Trevose, PA with locations in Bethlehem, PA; Coatesville, PA Groton, CT; and Fort Lauderdale, FL.

ISCO is a distributor, not a manufacturer of any products. We stock, sell, and provide services for the products that we distribute. Our TQM (Total Quality Management) program is based on internal processes for handling daily transactions that make up our business (entering orders, receiving material, payable & receipt functions, collections, credits, reporting, expediting, tracking material, etc). The procedures and proper methods for these tasks are detailed within our operating system which is Prophet 21 administered by Activant. The procedures and proper methods for these tasks are detailed and can be accessed by entering the Prophet 21 system through a login and searching the “help” menus. They can also be accessed through online webinars and on-site training CD’s which are used to train employees.

Since Industrial Supplies Company is not a manufacturer we rely, as distributors do, on our Vendors TQM programs for the quality of the products we sell and distribute.

Our TQM program is based on operating instructions within our operating system, company policies, as well as internal instructions which are listed in this document and are also detailed on our internal operating network in company folders. Within our company folders you will find all the reports, instructions, and procedures that ISCO utilizes to run an efficient, quality based organization.

Again, the majority of our instructions, procedures and policies are documented within our operating system and private company network. Various points and parts are detailed in this document as well.

Material Receipt

When material is received into Industrial Supplies Company, packages and pallets are inspected for any visible damage, which is brought to the attention of the warehouse manager before signing for any shipment in question. Any damaged shipment is promptly refused.

Upon arrival of material into Industrial Supplies Company, material is inspected for accuracy: part number, quantity, visual inspection; any discrepancies or questions are directed to the Warehouse Manager or Lead Person in charge if Warehouse Manager is not on-site. There is always a competent, trained ISCO employee available to make any decision regarding material receipt.

Once material is unpacked it is visually checked for quality and individual items are spot checked for accuracy and quality. All material is matched up and checked between ISCO purchase orders and vendor packing slips for discrepancies. Material is then received into the Prophet 21 system where items are again matched up and checked for accuracy. If a discrepancy is found in any format (wrong part number, defective material, wrong quantity, etc.) the material is isolated and put in our “Vendor Return” section and the vendor is contacted to resolve the problem. Instructions for vendor returns can be accessed within the P21 system.

Pulling & Packing Customer Orders

When pulling material for a customer’s order, a warehouse associate will verify that all item part numbers and quantities match the customer’s pick ticket exactly. All material is bin located in our operating system to assure ease of locating material and picking orders efficiently and accurately. At this point all material is visually inspected and if there are quality signs or issues it is reviewed and brought to a conclusion by the Warehouse Manager.

When packing a customer’s order, a 2nd warehouse associate will double-check the quantities, descriptions, and part numbers, against the pick ticket, for accuracy, and will report any discrepancies to the Warehouse Manager for correction. Material is again visually inspected at this point. A certificate of conformance will be printed out, when required by the customer, at this time.

When sending packages via ups, a label will be printed with the customer’s full shipping address, and the customer’s purchase order number will appear on the bottom of the label. This ensures ease of receipt by the customer. The ISCO packing slip details the item part numbers, item descriptions, quantities, and customer information.

If material is to be delivered or a part of our Vendor Managed Inventory program the orders are staged in our VMI/Loading area where they are again checked for accuracy, logged, loaded and delivered by ISCO associates.

Inventory

All ISCO inventory at all locations is “live” inventory and accounted for in our operating system. Inventory is bin located and can be easily located by anyone in our company by matching the bin number on the paperwork or in the system with the bin number on the ISCO shelves. Inventory is cycle counted to ensure accuracy. Inventory is also physically reviewed on a daily basis by Management associates. Management achieves this task by physically walking through the plant on a regular basis and visually inspecting and questioning material/items.

Entering Repair Orders

A customer has asked us to have a specific item repaired – procedures are:

1. Item(s) arrive at ISCO and are placed in a specific location in the warehouse.
2. Location of the item(s) is put on paperwork from customer and forwarded to appropriate customer service person.
3. Customer service person enters an order for the item to be repaired:

*The item should be entered using the Supplier, The word “REPAIR”, and the model number (EXAMPLE: DEWALT_REPAIR_DW945)

*The description and extended description should include item information as well as what is required for the item to be repaired.

*The DISPOSITION for the item should be “S”.

*The PO for the repair can be created “On the Fly”

1. After the PO is created, a copy is sent to the warehouse to be included in the shipment that is sent to the vendor.
2. When the Supplier furnishes a repair estimate price, go back to the sales order, enter the cost and sell and an order acknowledgement can be sent to the customer, if needed.

Return Goods Authorization

When it is determined that material needs to be returned by a customer the proper procedures are listed below. The forms are located on the computer network in the “ISCO Forms” folder. If it is determined material is being returned because the quality of material is in question or defective the vendor shall be immediately contacted. The vendor will be issued specific details to the problem as noted by ISCO and as reported by the customer, with all documentation provided. Material will be sent back for full inspection by vendor along with any documentation and reported back to ISCO with corrective actions, if necessary. ISCO shall then forward corrective steps back to the customer, if necessary. In all scenarios regarding questionable material provided by ISCO we shall always suggest a visit by ISCO and the manufacturer to review problem and correct if deemed necessary.

In our attempt to limit returns, costs associated with returns, and time spent processing returns please follow the following procedures:

1. Material is not allowed to be returned and should not be authorized until we have all the information regarding the situation (whose fault; can the material be returned to the vendor; is there a restocking charge; has the customer agreed to the terms of the return, etc.).

1. Once it is determined material is being returned, give the customer an RGA #. The RGA# will now be like an external PO number except it will start with an “R” (ex: R100501RR-1).

1. The return form will be completed by the inside salesperson. The only fields you will not need to complete are the location, D.M#, Cust Debit #, and Credit Authorization.

1. Return material is to be located in the warehouse and is not to be brought into any other area.

1. Make sure the form is completed accurately, including restocking charges by vendor & ISCO, vendor contact information, adjustments, etc.

1. After the form is completed, it can be placed in the “shipping papers” bin located in Inside Sales. It will then be filed in the warehouse until the material is sent back. Once the material is received in the warehouse it will be located and the normal return process will start. For Florida, the completed form is to be faxed or sent via mail to Philadelphia where the balance of the return will be completed by Philadelphia’s accounting department.

1. Once you have issued a return, it is valid for thirty days only. After thirty days, the returns will be invalid and disposed of.

1. When doing a “return” and replacement order it is our preference, and always best to give a credit and invoice the customer for the replacement order as opposed to “no charge-even exchanges”.

1. The form you fill out is now the only form being used. Once you complete this form it will be the one used for the entire process.

Entering an RMA within P21

Use these instructions to enter a return into the system. The steps marked with a  are mandatory.

1. Open the Order Processing module.

1. From the Transaction menu, select RMAs.

1. In the Order tab, enter the Customer ID, your Sales Location, and the customer’s Ship To ID if they have more than one Ship To address. You can also enter the Contact ID of the person who is returning the material.

1. To view more information about the customer you selected, see the following tabs: Customer, Pricing, Ship to, Ship Info, Credit, Contact, Salesreps, Classes, Tax, Totals, Customer Notes, Order Notes, Aging, Front Counter, and Remittances.

1. In the Items tab, enter the first item in the Item ID field. The Description and Qty Available will display.

1. Enter the quantity the customer wants to return in the Qty Ordered field and select the appropriate UOM. For example, if a customer wants to return 100 boxes of pens, you would enter 100 in the Qty Ordered field and Box in the UOM field. The Unit Price and Extended Price display for the line item.

1. To view more information about the item you selected, see the following tabs: Ext'd Info, Taxes, Stock Avail, Prices, Item Notes, Serial Tab, Lots, Orders, POs, Transfers, Sales History, Order Line Notes, Costs, and POs/Xfers.

Note: You cannot receive a serialized, customer owned item as part of an RMA receipt if the item is part of an open transaction. You must first complete and close the transaction.

1. Press [Enter] to enter another item on the return. Repeat Steps 5 through 7 until all the items are entered.

1. To enter a refund, click the Remittances tab.

1. Click Save.

Order Entry

The Order Entry window is used to enter customer orders. You can create new customer orders for stock, non-stock, and catalog items within the Order Entry window. You can also change sales prices and assign dispositions on an item-by-item basis. In addition, you can review, cancel, or add to orders at any time. All changes post to the system when you save the record and, from that point forward, are reflected in associated reports or transaction documents.

How it works:

Information that applies to the entire order, such as: Ship To’s, release schedules, and payments are viewed or entered on the top half of the window.

Information that applies to specific items on the order can be viewed or entered on the bottom half of the window.

Note: Orders entered for a customer set up to use a foreign currency display completely in the customer's selected currency. However, you can view the transaction in terms of your home currency by selecting Toggle Home Currency from the RMB menu.

The Order Entry window also:

• Enables you to enter orders for new items – these items are created on-the-fly (See Entering an On-the-Fly Item, Entering an On-the-Fly Assembly Item)

• Enables you to enter an order as a quote

• Enables you to enter release schedules for items purchased on a contract

• Enables you to create new contacts, customers, and ship to addresses at order entry time

• Enables you to change the Ship To prior to generating an invoice or printing a pick ticket

• Enables you to print generate invoices and print forms

• Enables you to accept remittances

• Enables you to submit pricing and availability requests to your trading partners if you have Trading Partner Connect

General Ledger Impact

When the order is shipped, the sales activity is posted to the following:

Account: / Action: / Record:
Accounts Receivable / Debit / Customer– AR Account
Cost of Sales / Debit / Inventory
Tax Payable / Credit / Jurisdiction Account
Sales Revenue / Credit / Customer or Item – Revenue Account
Inventory / Credit / Inventory

Order Entry is an option on the Order Processing Transaction menu. There are these tabs on the top: Order, Customer, Contacts, Ship To, Remittances, Totals, Front Counter, Order Notes, Ship Info, Tax, Customer Notes, Job/Contract Notes, Card Holder Address, Salesreps, Credit, Pricing, Terms, Shipments, Classes, Aging, Customer Sales History, Release Schedule, Audit Trail, Foreign Currency, Job Control, Reason Codes, Contact, and Document Links. If you use the Wireless Warehouse Management System, the Warehouse Activity tab is also available. There are these tabs on the bottom: Items, Ext’d Info, Substitute, Order Line Notes, Prices, Taxes, Costs, Schedules, Serial, Lot, Bin, Item Notes, Lot/Bin, Customer Part Number Notes, Commitment Schedule, Buy/Sell, POs,Transfers, Item Shipments, Will Call, Stock Avail, POs/Xfers, Production Order, Lot Billing, Orders, Sales History, PO Links, Document Links, Reason Codes,Tags, Tag and Hold, Timestamp, and Vessel Details, Process. If you use Room Location Maintenance, the Room Location tab is also available

Purchase Order Receipts

The Purchase Order Receipts window is used to receive material that is delivered to your warehouse.

There are three ways to receive material in this window:

• Receive items and automatically allocate them to existing orders

• Receive items and manually allocate them to existing orders

• Only receive items into inventory. No material is allocated to any open orders

If Use multiple currencies is enabled, amounts are saved in the foreign currency and the home currency.

Filling Customer Backorders Automatically

When you receive material on a purchase order into inventory, the system automatically allocates that material to orders that already exist, if enough material is received to fill all customer backorders and if you select the Allocate Automatically option.

For each line item, enter the quantity actually received. If you receive the full quantity of a line item on the PO, the line item is marked "complete."

Allocating Material to Specific Backorders

If you do not have enough material to fill all the open backorders, or if you receive material that you want to allocate to existing orders to meet a specific customer need, you can perform these transactions in the Allocation window, such as in this example:

You receive 100 copper elbow joints. The Allocation window displays 3 customer backorders for this item: one for 35, one for 75, and the last for 50. The customer who needs 35 elbow joints is an important customer. You choose the Allocate Manually option and allocate 35 elbow joints to that order.

You have 65 elbow joints left. You look up the information on the next customer and find their Ship To Packing Basis is Complete; they do not want any partial shipments. You allocate the remaining 50 elbow joints to the third order.

The remaining material is allocated to free stock, since the second customer’s order cannot ship until at least 60 more elbow joints are received.

The Allocation tab on the search window shows every customer order that exists for each backordered item you receive on the PO. The orders are listed by required date. If you receive material that needs to be transferred to another location to fill an order-based transfer, the OBT Items tab is available to view related information.

Tip! Order-based transfer items cannot be allocated using this window. You should run a Generate Transfer Requirements Report.

The Purchase Order Receipts window can also be used to:

• Add freight charges

• Enter serial, lot, and bin numbers for items that track these things.

• Read Item Notes and Supplier Notes that exist for the shipment.

General Ledger Impact

When you receive PO items into stock, the activity is posted to the following:

Account: / Action: / Record:
Inventory / Debit / Inventory Item Record
Clearing Account / Credit / Company Record in System Setup

 Purchase Order Receipts is an option on the Inventory Transaction menu. The window contains the following tabs across the top: PO, Receipt Notes, Freight, Supplier Notes, PO Notes, Landed Cost, Document Links, and Timestamp. The window contains the following tabs across the bottom: Items, Serial, Lot, Bin, Lot/Bin, Item Notes, Allocation, Line Freight, PO Line Notes, OBT Items, Release Schedule, Disassembly,Receive Substitute Items, Lot Bill Components, Landed Cost, Document Links, and Timestamp.