Effective Warehouse Operations – Best Practices in Receiving
This month, we continue of discussion of warehousing operations by looking at best practices in receiving material. Here are some policies and procedures we suggest you implement to ensure that your receiving department is an active participant in your goal of achieving effective inventory management:
Assign your most technically competent people to receiving and stocking. These people know your products. They can easily differentiate between similar looking items and tell if each product received meets your quality standards. They also know where material is stored in the warehouse and can stock it in such a way as to minimize the cost of filling orders.
New employees should be assigned the task of filling orders under careful supervision. It is easy to find and correct their mistakes as they learn your products.
Check material in against your purchase order not the packing list supplied by the vendor. The material in the shipment may agree with the vendor’s paperwork but it may not be what you ordered.
Cross dock backordered and special order items. When entering a stock receipt into the system, the receiving clerk should be notified by the system of the quantities of each item that are needed to fill outstanding customer orders. Racking and/or shelves in the receiving area should be reserved to temporarily store this “cross docked” material. After posting the stock receipt, the receiving clerk should be able to print pick tickets or be notified of shipping instructions for these products.
There are situations where the quantity received is not adequate to completely fill all outstanding customer orders. In these situations, the appropriate buyer should be notified (by email or daily report/inquiry) and he or she should specify which customers should receive material by releasing those outstanding orders to the receiving department.
Have standard policies and procedures for all situations. There should be two ways to handle any situation: your company’s approved way and the wrong way. Every person in the receiving department should understand how to handle all situations including:
- Who needs to approve accepting shipments from vendors that arrive without a valid purchase order number?
- How large of an over shipment can they accept without management approval?
- What is the maximum allowable amount of time after stock receipt to have a shipment of products available for sale or use? This is typically referred to as “dock to stock” time.
- How should damaged or mis-shipped material be quarantined until the appropriate buyer decides how to deal with it?
- What is necessary to issue a customer a credit for returned material?
You can have the best forecasting and replenishment system available, but if your receiving department loses material, double handles receipts, or is inconsistent in their material handling procedures, your company will not be able to achieve the goal of effective inventory management.