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A definitive guide to receiving and storing inventory

14 May, 2022 | Inventory Management

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For any warehouse, receiving and storing shipments are primary activities and full-time jobs for inventory managers. When you have multiple SKUs, fast-paced supply chains, and evolving market conditions — it’s imperative to be as efficient as possible at each stage.

In this article, we’ll discuss the fundamental aspects of receiving and storing inventory from suppliers. We’ll also go over best practices for your future reference. The best part? You’ll be able to quickly implement these recommendations quickly through your warehouse management software.

Let’s jump right into a step-by-step guide to pre-receipt, receipt, offloading, storage, and cross-docking procedures.

Step #1: Get to know your vendor compliance programs

Vendor Compliance Programs are key. You should treat vendor compliance programs as bilateral convenience tools, as they’ll help you outline the processes involved in your transactions. A good vendor compliance program optimizes transport, material handling, delivery, and storage.

From shipping origin, to delivery time and packaging — these programs make sure everything is organized and labeled. These programs help remove guesswork and clearly define procedures. Vendor Compliance Programs allow both you and your vendors to optimize your respective operations.

“In evaluating potential vendors, accurately estimating the total cost of ownership is critical. Yet, this is often an area where companies don’t put in enough effort. This tool can help those looking for a Warehouse Management System and take care of this key issue.” – Dan Gillmor

Most of the agreements made under vendor compliance programs help you with quality assurance and supply chain management. They also include Standard Operating Procedures (SOPs) for executing each part of the process in a standardized manner.

Ultimately, these programs reduce manual decision-making and make your operation run predictably. A good vendor compliance program is a benefit to both you and your vendors, and allows you to be more profitable. By making these types of continuous improvements in even the smallest parts of the supply chain, you’ll see a big difference on your balance sheets.

Step #2: Include metrics in your receiving documentation

There are a lot of businesses that don’t have documented frameworks to carry out receiving — and you don’t want to be one of them. For example, you should be able to estimate the required time for unloading a consignment by examining its content details. You should also be able to estimate the safety measures needed for each shipment.

Including metrics in your receiving documentation helps determine your security personnel’s verification process, the human resources required, and the time gap between two consecutive deliveries. These metrics lay the foundation for pre-receipt activity documents. Measuring these activities is the best way to keep operations safe and agile, and it saves your workforce from having to make decisions over and over again.

Step #3: Document your vendors and shippers for quicker data transfer

Documenting your vendors and shippers is a simple and brilliant way to keep things in order. It also makes your processes predictable, and it cuts down the time required for verifying shipments. All goods carried by the shipping firm should come with information in a format that makes it easy to enter quick data quickly.

You should also have a guideline for labeling in terms of both information and position. The packaging used, units per pack, packs per pallet, weight, dimensions, and handling instructions should all have standardized labeling guidelines.

Having all this information at your disposal is hugely beneficial to warehouse operations. Instead of making your workers gather this data manually, they can focus on special cases and work faster. This type of documentation lays the foundation for faster supply chains — which is why transferring data accurately is just as important as transferring the goods.

When documentation is precise, transparency becomes a pillar of efficiency in supply chains. The carrier’s route and progress data can help provide solutions to emergencies like breakdowns, accidents, or natural calamities in real time. In these ways and more, clear documentation processes help to manage problems and allows your company to stay flexible.

Step #4: Receive your shipment (Labor planning, booking, and equipment distribution)

Upon receiving the shipment, it’s crucial to unload the consignment as soon as possible. With correct planning, your warehouse management should be able to allocate the right number of workers and staff-hours needed for any consignment. This is important because labor is, by far, the most significant cost in any warehouse.

You should assign the shipments to your workers based on cargo size. Make sure all workers are present and ready to go at the time of unloading. The material handling equipment should also be ready and understand procedures — depending on the dimensions and weight of the cargo.

Small, basic operating principles — like unloading entire pallets instead of unloading individual cartoons — make the process a lot more efficient. They boost the speed of operations and make it easier for your other workers to access cargo.

Both booking and material-handling equipment distribution play a massive role in streamlining the unloading and verification processes.

Product pick rate efficiency can be improved by up to 50% by using pick-to-light systems.

Step # 5: Identify shipments and verify documents

As a rule of thumb, the process of shipment identification starts at the security gates. You should assign a warehouse clerk to verify both the transport documents and the shipment details. Before accepting entry, make sure to check the sender’s company letter.

If required, additional communication should be done before signing the arrival documents. The clerk should compare the details on the shipping document against the order and invoice. Doing this will make sure that any discrepancy is identified right away.

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Step #6: Count incoming products

Once the initial arrival documents are signed, the workers will start unloading the shipment. Each pallet, crate, and carton are unloaded, and corresponding invoices are used to verify the product quantity.

If there are discrepancies, they should be first communicated with the purchase officer, and subsequently with the company that sent the products. Each and every item should be counted quickly with the help of support mechanisms.

To be more efficient, items with standard weight per unit should be weighed instead of counted. When counting, procrastination is the biggest enemy of effectiveness. Believe it or not, stacking goods directly onto shelves is the most common reason behind counting problems. This is exactly why developing protocols is a must.

Market Stat: 9% of distribution centers only deal in full pallet orders.

Step #7: Document product inspection and acceptance

Next, the quality assurance team checks each item for quality and usability. The team takes into account any allowable damages as agreed upon with the carrier and sending organization. Usually, these terms are included when the goods are sensitive to time, temperature, lighting, and travel conditions.

The counting process is completed under video surveillance, and barcodes are used to speed up the process. In some cases, especially when counting items like turbine blades or large mechanical parts, coordinate measuring systems can be used. Unlabeled stock is separated as soon as it’s detected, which reduces confusion and makes the process as smooth as possible.

After the inspection for agreed quantity, quality, and usability standards, the final acceptance documents are signed by the clerk who oversees the delivery. Comments regarding acceptance and carrier ratings are made after the completion of these processes.

Step #8: Enter your list of received items in your warehouse management system

The next step is to enter the list of received items into your Warehouse Management System. This will allow you to know precisely how many units are available for each item. It can be a tricky process — especially when using SKUs and combinations of items that vary from their labels. Make sure to enter in that information into your software to avoid any mishaps. Once again, keeping your processes as clear and defined as possible is extremely important.

Your warehouse management system will also generate a list of empty bins for allocating your newly arrived stock. You should always replace the labels if necessary to avoid any identification errors that may arise later.

The discrepancies raised by inventory clerks are also processed at this stage, and a report is sent to the supplier with that information. The missing items are queued in the next delivery schedule to make sure there are no gaps in order fulfillment.

Step #9: Re-label and stack received goods

All the inventory inside your warehouse should be accurately and systematically labeled, including incoming inventory. You can decide whether or not you want to remove the old labels, but re-labeling is highly recommended. It ensures seamless productivity and reduces confusion among your workers. The goods are then either stacked at temporary bins or directly transferred to the source location.

Step #10: Take advantage of cross-docking

Cross-docking is a practice in logistics where materials are unloaded directly to the customer or another mode of transportation, and it can greatly reduce your need for storage.

E-commerce and omnichannel sales are redefining the way warehouses are managed, and cross-docking is fast becoming a norm in the industry. It saves you both labor and real estate costs, and it bypasses the activities of sorting, storing, and packing.

However, cross-docking does demand more attention during the product counting and the verification process. Still, we believe that it’s worth it. Cross-docking is one of the pillars of agile supply chain strategies.

Step #11: Consider best practices for receiving & storage

Speaking of storage, these are some best practices that apply to all warehouse types and product volumes.

  • Always operate through vendor compliance programs
  • Prioritize simultaneous scheduling and planning
  • Leverage modern technologies like contactless verification tools
  • Integrate your warehouse management system with your carrier’s systems
  • Minimize physical contact and analyze each contact as a transaction
  • Ensure multi-channel communication with your shipping partners and suppliers
  • Align your inventory cycle count with your receiving and storage processes
  • Take advantage of dynamic slotting and cross-docking

Step #12: Streamline receiving and storage using DEAR Systems

In this article, we’ve discussed the ideal approaches at each stage of moving inventory from unloading to stacking. We’ve also outlined best practices to ensure that you have smooth, streamlined processes.

The most critical aspect of stock movement in your warehouse, without a doubt, is receiving and storage. If you’re serious about improving your warehouse’s processes, we highly recommend that you try DEAR System’s warehouse management system. Not only does it offer guidance to help your workers navigate your warehouse, but it also helps you stay organized, informed, and efficient.

Take advantage of our 14-day free trial today and see how we can provide a perfect solution for your warehousing needs.

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