Warehouse managers are always working to improve the efficiency and accuracy of their operations. One important way to meet customer service expectations and budget goals is to get the fulfillment process off to a good start by implementing best practices in the receiving department.
The initial steps to improve your receiving process require having in place the technology and tools to get the job done. Electronic, paperless communication should be the goal for the most accurate, seamless, and hassle-free receiving of goods into your warehouse. Anything that you can scan or communicate electronically from one point to another in the receiving operation (with as little human data entry as possible) will benefit your company’s bottom line. The processes described here should be set up before the products even arrive at your warehouse doors.
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The supply chain needs to make use of electronic communications. Send advanced shipping notices (ASNs) electronically or by fax once the product has left the vendor. This will allow you to plan labor for receiving and the best use of space at the dock doors.
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Send cross-docking receipts for backordered products directly to the packing area. This will save put-away time and pick time later on, as well as labor man-hours.
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Effective supply chain management requires proper scheduling of transportation deliveries. If you want to optimize labor, dock doors, and space — and reduce receiving yard confusion — schedule as many receipt deliveries as you can.
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Get vendors to pre-pack and pre-distribute receipts to cross-dock to stores without opening or inspection. It will take time and discipline to develop a system with your key vendors. You have to set the standards and compliance procedures and have systems in place to implement this requirement, but it saves considerable time and costs.
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Enforce receiving procedures: Adopt vendor compliance standards, and publish vendor compliance procedures for the organization and vendors. Get the vendor to label the outer carton with the PO number, product or style number, carton count, and bar code.
Require vendors to sign off and return an acknowledgement that they have read and will adhere to your compliance procedures. Failure to follow procedures should be tracked and reported as part of your vendor scorecard and periodic analysis of vendors.
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Request single-SKU cartons where possible. This makes it easier and quicker for warehouse staff to check in and put away product.
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Make sure the inner packs match shipping units to the end users (retail stores or individual customers).
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Ensure that your facility has the ability to scan bar-coded receipts whether they arrive on pallets or in cartons. Also, you should be able to scan multiple common bar code conventions such as ISBN, EAN, and UPC. More automated environments can use sortation based on bar-coded cartons.
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Set standards for “dock to stock” receiving. Once a shipment of merchandise is received, how long does it take for you to get it put away on your warehouse shelves? The best practice is four to eight hours, but certainly try to keep it within 24 hours. This should be achievable for most product receiving, except in facilities where container shipments bottleneck the receiving process, which may require more than a day.
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Lay out the space in your receiving and inspection area to eliminate bottlenecks in the distribution facility. The overall flow in receiving will be optimized by:
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locations designated on the receiving floor to track product;
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organized use of dock, receiving space, and staging for putaway;
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having sufficient space where bottlenecks often occur;
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a sufficient number of doors;
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dock door levelers; and
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availability of pallets for receipts.
Also, remember to ensure that department space and bays do not come into conflict with shipping space and bays. And allow sufficient space in the layout to quarantine product and resolve troublesome shipments.
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Put telescoping conveyors directly into the truck or container to reduce labor and unloading time.
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Use JPEG images to identify product. For receiving new items as well as for identifying returns, it’s more helpful for staff to see actual images of products instead of the line drawings or copies of catalog that may have previously been used.
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Work with your operations staff to implement system-directed movement in your receiving operation. This will enable you to expedite and control the movement of product from the receiving dock to its next location in the fulfillment process. The cost justification for setting up a system-directed receiving operation with manual override is evident.
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Set up warehouse flow to allow for continuous workflow without crossing over other processes during product moves.
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Make sure that the purchase order has been maintained by the merchant and is in the receiving system before the truck arrives.
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Institute variable levels of quality assurance. Rank your product vendors as “A,” “B,” and “C” levels based on the amount of attention and scrutiny their merchandise will require at time of delivery. For example, an “A” level vendor will not require the same level of scrutiny as a “C” vendor. Knowing this information up front will save your warehouse staff time by knowing where to focus their efforts on the receiving docks.
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Pick a warehouse management structure based on the skills you see in people in the marketplace and the skills and time available on staff. Here are two options:
- split management of the front end (receiving, checking, marketing, putaway) from the back end (pick, pack, ship, and manifesting); or
- individual line managers reporting to a fulfillment director or COO.
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Set up a formal training program. Warehouse training should include written procedures, practices, and standards for all areas related to receiving. Improved up-front training in areas such as receiving, product putaways, and handling product returns will only improve accuracy and speed.
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A good relationship with the merchandising department is the key to getting problems resolved quickly. This is particularly true in the area of trouble shipments.
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As a standard of compliance, specify to the vendor how you want to receive the product (pallets, cartons, interpacks, eaches). Make sure your warehouse management system can accommodate various units of measure for each product.
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Productivity measurement and service level programs should be used to measure performance in the following areas:
- on-time receiving and quality control on the part of vendors;
- worker productivity;
- receipt to putaway time; and
- units received per hour.
Only by measuring your company’s own performance — against both internal measures of past performance and external benchmarks — can you work toward making incremental changes. This will help everyone within your organization, from the management level to the warehouse floor, strive to make improvements, with the ultimate goal being better customer service.
Curt Barry is president of F. Curtis Barry & Co., a Richmond, VA-based firm that specializes in operations and fulfillment consulting for catalog, retail, and e-commerce companies. Contact Barry at (804) 740-8743 or by e-mail at [email protected], or visit the company’s Web site at www.fcbco.com.