Inspection Procedure

00-SAIP-12 1 October 2007

Equipment Deficiency Reports
Document Responsibility: Inspection Dept.

Saudi Aramco DeskTop Standards

Table of Contents

1 Scope............................................................ 2
2 Purpose......................................................... 2
3 Applicable Documents.................................. 2
4 Definitions..................................................... 3
5 Responsibilities............................................. 3

EDR Process Flowchart...................................... 7

Previous Issue: 29 February 2004 Next Planned Update: 30 September 2012

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Copyright©Saudi Aramco 2007. All rights reserved.

Document Responsibility: Inspection Dept. 00-SAIP-12
Issue Date: 1 October 2007
Next Planned Update: 30 September 2012 Equipment Deficiency Reports

1 Scope

1.1 This Saudi Aramco Inspection Procedure (SAIP) shall be used to identify,
investigate and, document substandard equipment/material procured directly by
Saudi Aramco Purchasing Department or by Contractors for Saudi Aramco
projects. Equipment Deficiency Reports (EDR) through SAP (quality
notification type Q4) will be used to report deficiencies.

1.2 EDR's are issued when a newly purchased inspectable material arrives at a Saudi
Aramco plant or project site with a major deficiency (manufacturing problem or
deviation from purchase order requirements), or when it fails prematurely after
being put in service due to manufacturing problems.

1.3 Excluded from this procedure are materials considered non-inspectable by the
Inspection Department.

Note: In formation concerning whether a specific material is inspectable or

non-inspectable can be obtained from the SAP system.

2 Purpose

The purpose of this SAIP is to ensure that the reporting, investigation, and
documentation of equipment deficiencies are handled consistently; this includes proper
feedback to the EDR Coordinator, EDR Originator, and other appropriate organizations
and that necessary corrective action is taken to prevent recurrence of deficiencies.

The purpose of the EDR process is to determine the root cause of the problem, record
the actions taken to correct the problem, and to avoid reoccurrence in the future. EDR
is to measure the effectiveness of the manufacturer's quality system and the
effectiveness of the inspection process.

Note: The EDR process is illustrated in the attached Flowchart.

3 Applicable Documents

The following standards were used in the preparation of this procedure:

SAEP-301 Instruction for Establishing and Maintaining
Saudi Aramco Engineering Requirements
SAEP-1 150 Inspection Coverage on Projects
CUO6 Supply chain Management Manual "reference for
substandard material"

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Document Responsibility: Inspection Dept. 00-SAIP-12
Issue Date: 1 October 2007
Next Planned Update: 30 September 2012 Equipment Deficiency Reports

4 Definitions

EDR Coordinator: An individual assigned by the Vendor Inspection Division (VID) to

coordinate the EDR investigation.

EDR Originator: An individual who creates and submits the EDR through SAP
notification (type Q4) to report the equipment deficiency.

Equipment Deficiency Report (EDR): A completed SAP notification (type Q4)

listing equipment deficiencies with sufficient detail to enable identification of the
procurement document, specifications, and the equipment manufacturer.

Equipment Deficiencies: Equipment/material's deviations from specific purchase order

requirements including applicable Mandatory Saudi Aramco Engineering Requirements
(MSAER).

Inspectable Material: Inspectable materials are classified by the Vendor Inspection

Division (VID) in coordination with the Responsible Standardization Agents (RSAs).
All inspectable materials (inspection category A, B, C and S) shall be procured from
approved manufacturing plants.

Mandatory Saudi Aramco Engineering Requirements (MSAER): Requirements

listed in SAEP-30 1 including SAMSS, SAES and Standard Drawings.

Substandard Material: Any material delivered to Saudi Aramco that does not meet
material specifications, either as stated in the purchase order or fails in use when
installed in Saudi Aramco facilities.

Substandard Materials Coordinator: An individual assigned by the Purchasing

Department to receive all necessary information relating to substandard material to
determine disposition of the material and coordinate replacement/repair/claim action.

5 Responsibilities

5.1 EDR Originator

5.1.1 The EDR originator shall gather all required information to report
equipment deficiency, and then create EDR quality notification (type
Q4) in SAP. Whenever possible, he should attach to the EDR
notification copy of related documents (e.g., purchase order, change
orders and project specifications, etc.).

5.1.2 Project Engineer, project quality manager, and assigned Saudi Aramco
Inspection Representative shall be included in the interested party
section for all project material EDRs.

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Document Responsibility: Inspection Dept. 00-SAIP-12
Issue Date: 1 October 2007
Next Planned Update: 30 September 2012 Equipment Deficiency Reports

5.1.3 Once the EDR originator changes the quality notification status to
"Submitted", the system will automatically forward the EDR via SAP
workflow to the VID EDR Coordinator for further processing.

5.2 EDR Coordinator

The EDR Coordinator shall perform the following functions when he receives
the EDR by workflow:

a) Review the EDR and ensure that it clearly specifies the purchase order,
vendor/manufacturer, manufacturing plant location, material/equipment,
and description of the deficiency with reference to the specific violated
requirement. EDRs that lack this information should not be approved.
EDR coordinator should contact EDR originator requesting the missing
information. When EDR originator fails to provide required information
within one week, EDR coordinator should refuse the notification with an
explanation for refusal.

b) Include QAU supervisor in the interested party within the EDR

notification. In case of materials procured directly by Saudi Aramco, he
shall include Substandard Material Coordinator in the notification
interested party section.

c) After an EDR notification is approved, the EDR Coordinator assigns a task

for investigation of the reported deficiency to the Responsible Inspection
Office (RIO) based on the manufacturing plant location (i.e., Quality
Control Unit of VID for Saudi/GCC/Indian manufacturers, AOC-Leiden
for European manufacturers, AOC-Tokyo for Asian manufacturers, and
ASC for North American manufacturers).

d) Follow up on the on-going EDR's and review the results of initial

investigation, vendor response and action taken upon receipt from the
investigating inspection office and determine appropriate corrective action.

Note: Corrective action should address quality system failures rather

than the correction of the equipment deficiency. Consideration
should also be given to previous EDRs from the same
manufacturer.

e) Once all tasks are completed, he reviews the EDR corrective actions and
decides if additional tasks are necessary to ensure that these defects will
not recur in the future.

f) After the new tasks have all been completed, he once again reviews the
notification and if satisfied that the EDR has solved the problems related to

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Document Responsibility: Inspection Dept. 00-SAIP-12
Issue Date: 1 October 2007
Next Planned Update: 30 September 2012 Equipment Deficiency Reports

the equipment deficiency, consolidates the notification and successfully

complete the task. Then, he shall complete the EDR notification in SAP.

g) Prepare a monthly EDR status report and submit it to the RIO supervisors
and to the Superintendent of the Vendor Inspection Division. Individual
EDR can be accessed in SAP at any time.

All interested parties including the originator of the EDR notification are
notified that the EDR is completed.

5.3 Responsible Inspection Office Supervisor

The RIO Supervisor shall do the following:

a) Review the task forwarded to him by the EDR Coordinator via SAP
workflow.

b) Assign the EDR task to the appropriate inspectors within the Inspection
Office.

c) Track all on-going EDR tasks assigned to his Inspection Office and ensure
that actions are taken and followed-up.

5.4 Responsible Inspection Office Inspector: The assigned inspector shall do the
following:

a) Review the task forwarded to him by the Responsible Inspection Office

Supervisor via SAP workflow. Then, he releases the task in the EDR
notification.

b) Obtain a copy of the purchase order, specification, etc., if it is not provided

with the EDR notification.

c) Review the reported deficiencies against the purchase order requirements

and contacts the EDR originator, proponent, supplier, etc., as necessary to
understand the nature of the deficiency. He makes a physical inspection of
the equipment, when deemed necessary, to confirm the reported
deficiency.

d) Contact the manufacturer and/or inspection agency (if applicable) to

determine the cause of the deficiency and proposed corrective action for
material procured, which did not meet purchase order requirements.

e) Update the information in SAP concerning what has been done to correct
the deficiency and prevent recurrence in the future. He shall attach related
documents to the task in SAP.

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Document Responsibility: Inspection Dept. 00-SAIP-12
Issue Date: 1 October 2007
Next Planned Update: 30 September 2012 Equipment Deficiency Reports

f) Once all actions are taken and data are entered in the SAP system, he will
then complete the task of the EDR notification and report investigation
results along with initiated corrective action. The SAP system will then
automatically inform the EDR Coordinator.

Revision Summary
1 October 2007 Revised the "Next Planned Update. Reaffirmed the contents of the document and reissued
with minor changes.

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Document Responsibility: Inspection Dept. 00-SAIP-12
Issue Date: 1 October 2007
Next Planned Update: 30 September 2012 Equipment Deficiency Reports

Edr Process Flowchart

~!
E D R C r e a te d / S u b m itte d b y
O r ig in a to r

E D R R e v ie w e d b y V ID E D R
C o o r d in a to r

No
O r ig in a to r & In te r e s te d
A c c e p te d
P a r tie s n o tifie d

Yes

A s s ig n T a s k to R IO

R IO C o n ta c t M a n u fa c tu r e r /
In s p e c tio n A g e n c y

R IO S e n d F e e d b a c k to E D R
C o o r d in a to r

E D R C o o r d in a to r C o m p le te
EDR

In te r e s te d P a r tie s N o tifie d

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