Improving Your Receiving Line

A truckload of merchandise arrives at your warehouse from the vendor; your workers check it in, unload and unpack it, and put it into stock. Sounds simple, right? But while the receiving process seems straightforward, you can take steps as merchandise comes in that will improve inventory counts, and identify quantity and quality problems.

At woodworking products cataloger McFeely’s Square Drive Screws, for instance, receiving clerks verify incoming merchandise from a “blind” receiving ticket – or one without a shipment’s total quantity. Operations manager Ron Pegram says this procedure forces the receiving clerk to count or weigh in each carton in the shipment. Before, he says, some receiving clerks would simply “eyeball” the shipment, which resulted in inaccuracies. In the 18 months since Lynchburg, VA-based McFeely’s began hand-counting, inventory accuracy has increased significantly, Pegram says, although he won’t divulge specific figures.

As important as ensuring that you receive the correct quantity is making sure that the quality of the goods meet your standards. For that reason, workers at Lenexa, KS-based food cataloger Wolferman’s also inspect the merchandise before storing it in the warehouse.

“If it’s a specialty holiday basket in which we may have only 2,500 or 3,000 units, we will look at every basket,” says Mike Ruchensky, vice president of operations. “If it’s something that we are receiving 25,000 of, we will look at 25% of the baskets.”

Wolferman’s warehouse workers visually inspect the goods “to make sure the merchandise is the right shape, size, and density,” Ruchensky notes. But they don’t stop there. Staff taste-test a sample from every lot as well.

Before Wolferman’s instituted its quality assurance program two years ago, “if a gift basket was damaged, for instance, it wouldn’t be noted into our system until after the order was placed,” Ruchensky says. The program has since boosted the company’s inventory accuracy levels 20%, he adds.

What’s more, “if there’s more than a 10% discrepancy between our purchase order and what’s actually delivered, we’ll put the entire order off to the side until we can solve the problem with the vendor,” Ruchensky says.

North Branford, CT-based kitchen tools cataloger Professional Cutlery Direct (PCD) has also found that catching problems during receiving improves the entire fulfillment process, says founder/CEO Terri Alpert: “If you have a chance to stop damaged merchandise from going to your customers, that’s worth the time your clerks might spend on the front end inspecting merchandise.” In general, PCD performs spot checks when working with new vendors. However, the company inspects each chef’s knife made by European manufacturers since these are made by hand and therefore are more likely to have irregularities that do not meet customer specifications.

Setting the stage With merchandise shipments arriving to the warehouse and customer order packages being shipped out, where do catalogers make the space to conduct quality control inspections and SKU counts? Most catalogers create a staging area in the warehouse for receiving merchandise.

McFeely’s, for one, uses the staging area to repackage some items as well. For example, the cataloger’s fastener manufacturer bundles its fasteners in quantities of 10,000, Pegram says, but most of McFeely’s customers prefer to order in smaller volumes. So McFeely’s repackages the fasteners into 500- and 1,000-piece packages.

Unfortunately, many catalogers don’t have the luxury of enough warehouse space to set up a staging area, says Bob Betke, vice president at Richmond, VA-based operations consultancy F. Curtis Barry & Co. During busy seasons, shipments may be received wherever a forklift operator can find space.

Still, time and space are no excuse for not counting and inspecting merchandise. As Betke notes, “Your standards for receiving should get more stringent, not looser, during the holidays.”

The Blair Warehouse Project This month, Catalog Age spotlights the distribution center of $522.2 million Warren, PA-based apparel cataloger Blair Corp. From this 536,000-sq.-ft. facility, Blair fulfills orders for its apparel titles (Blair, Crossing Pointe, Customwear, and Scandia Woods) and home products catalogs (Blair Shoppe, Gift Gallery, Improved Living, and Today’s Kitchen). Randy Scalise, Blair’s vice president of merchandise, notes that the facility is divided into three sections: Warehouses 1 and 2 are used for pallet storage and Warehouse 3 is for carton storage. Below, the particulars for the entire facility.

Building size: 536,000 sq. ft, with 65-ft.-high ceilings

Number of distribution center employees: 771

Number of SKUs: more than 106,000

SKU capacity: 190,000

Carton capacity: 429,000

Packages shipped in 1999: 13.5 million

Units shipped in 1999: 28.5 million

Percentage of orders with multiple SKUs: 30%

Fill rates: 86% initial, 95% final

Cartons received/put away a day: 11,000 (peak)

Units received/put away a day: 120,000 (peak)

Average cartons picked a day: 7,500

Record orders filled in a day: 19,074, May 22, 1990

Record orders filled in a week: 434,411, May 13-17, 1991

Sorting capability: Blair’s shipping sorter (installed in 1987) has 260 trays and sorts 180 packages a minute.

Quality control standard: On average, the company spot-checks about 21% of the units received from vendors.

Biggest boast: At 400 ft. long by 160 ft. wide, Blair’s Warehouse 3 is more than four times larger than the football field at Penn State University in nearby State College, PA.

Favorite technology: state-of-the-art forklifts that cost more than $100,000 each. Pickers use the forklifts to retrieve 22% of merchandise (primarily apparel items) using radio-controlled frequency and bar-code scanners.

Most reassuring moment: While many catalogers spent most of 1999 worried about the Y2K computer scare, the programmers at Blair took it in stride. After all, they were the same programmers who wrote the original Blair computer code 30 years ago – the legacy system Blair uses to this day – so they knew how to fix it.

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