“Dock-to-stock” is the battle cry of every receiving department. Every fulfillment business regardless of size faces the same pressure to meet daily service levels.
The most critical element of efficient and accurate receiving is validating that the vendor has shipped the correct item and quantity based on purchase order requirements. Deviations from the purchase order create inaccurate inventory counts and delayed customer service.
Dock-to-stock turnaround time in best-of-class companies is two hours to receive, check in and put away product. Most ecommerce merchants should set a goal to clear the dock and staging areas in the same shift. This assumes limited quality assurance tasks which may require things like fabric inspection and measurements. However, the QA should be completed with 24 hours.
Here are 11 ways you can improve your dock-to-stock performance:
Adopt Vendor Compliance Policies
These policies typically address:
- Agreed technology formats: Advanced Shipping Notifications (ASN), barcode and EDI.
- Designated freight carriers: Do not leave carrier selection up to the vendor. They have little concern about cost or service and might be making a profit on shipping.
- Packaging specifications includes outer box specs to protect from damage or act as a ship-alone container.
- External carton labeling including purchase order number, SKU number and description, your company name and address, number of cartons identified as 1 of X, 2 of X, etc.
- A product specification sheet for quality assurance.
- Procedures and practices for quantity variances, damages and any other specifications when not met; may include chargeback policies.
- Return to vendor procedures.
Even the smallest merchant should consider vendor compliance policies such as inbound freight routing. Inbound freight is a considerable expense – every dollar saved using your carrier is profit.
Adopt ASNs: They are used to notify a retailer of incoming shipment of product. ASNs typically include PO numbers, item numbers and quantity and can be paper-based or electronic. This is one of the most beneficial process changes you can make.
Schedule trucking appointments: Every fulfillment center needs to know scheduled arrival dates for inbound freight to enable planning of labor and material handling equipment resources. In the absence of sophisticated planning and scheduling systems, use the open purchase order file printed in due date sequence. Larger facilities require carriers to either call for an appointment or have regularly scheduled daily deliveries such as small parcel carriers.
Identify returns from other receipts: Use barcodes or pre-printed return labels to quickly sort packages that should be sent to returns processing and clear the receiving area and inbound process.
Receiving system data: The receiving process either uses a receiving document or online display of critical information, such as SKU number, item, description, quantity ordered, quantity received and product/vendor comments. Consider expanding receiving data to include primary pick location, quantity in primary, reserve locations and back order quantity. This facilitates direct put away from the dock to the pick slot and also consolidation of product in storage locations.
QA and inspection: Processes vary widely between retailers with proprietary or exclusive product and case received product with little inspection. For exclusive and proprietary product, specification sheets need to be attached to the PO and used by QA to inspect incoming product.
Cut inspection time: One way to cut effort from the inspection process is to vary the testing based on the vendor’s quality and accuracy history. Vendors that are consistently reliable will have less product inspected.
Cross docking: For backordered product, cross docking eliminates product handling by moving checked in product directly to pack stations, without passing through the put away and replenishment steps, speeding fulfillment and improving customer satisfaction. The receiving system must prompt the receiving staff of back ordered items.
Implement barcode receiving: Barcode-based receiving processes can be much faster and more accurate.
Product dimensioning: Implement process of calculating weights and cubic dimensions for each new assortment to better manage warehouse inventories and slotting.
Vendor scorecards: Develop receiving statistics by vendor and product to feed your vendor scorecard system. These should include late receipts and any product or paperwork problems. This data is invaluable during vendor negotiations.
Inventory accuracy starts with efficient and accurate receiving. Receiving docks are often undersized. If you’re planning a new or expanded facility, be sure to project the number of shipments on an average day as well as during peak as well as the number of units so you don’t create bottlenecks that slow down the dock-to-stock process.
Brian Barry is President of F. Curtis Barry & Company