Sunday, 29 December 2013

Inventory Management : Receiving Inventory

Receiving is one of the basics and first point of touch for the inventory you are procuring. You did all the planning and analysis placed purchase orders with your vendor to procure the inventory. It is the time now for your to receive that inventory, store them in your warehouse and make it available for your customers.

Vendors send you the items to your warehouse in multiple ways i.e., pallets or eaches. If you order
huge quantity they send it on wooden structure called as pallets. On the left side you can see inventory placed on pallets. Sometimes, a pallet generally means inventory on a pallet structure. These pallets are usually handled (or lifted) by deckboads (or fork lifts) in warehouses. These pallet structures have standardized sizes (come in 2-3 sizes depending on counties). You can read more about standardized pallet dimensions at Wiki

If you order small quantities, your vendors might not send them on pallets but as descrete items as well. Pallets and eaches need to be handled separately for obvious reasons.

You need to have the receive area nearer to the entrance of your warehouse, so that the trucks from vendors can easily come and drop your orders. If you generally get lot of incoming inventory it is a good idea to create inbound dock areas where trucks can be easily parked and processed.

Vendors can be asked to deliver in particular delivery times as opposed to randomly, so that you can plan your labor for processing in receive area. Most of the vendors will tell you when you can expect the delivery of your items. Depending on how much trusted your vendor is, you can promise your customers about the items (i.e., you will get order on Monday, or you can say this item is available even though it is not, because you are expecting a shipment with high probability soon).

Handling Inventory at the time Receive

Cross check inventory received
From the invoice of the inventory received, you should be able to cross check if you got the items you original ordered or not and if you have received the accurate quantity or now. Any discrepancy should be immediately acknowledged to the Vendor. Your software should be able to pull out the purchase order you made and should be able to assist the associate to match it.

At this same time, your associates should check the quality of the items received as well, any damaged products should be immediately discarded.

Affix labels
When you receive the inventory, you need to keep track of it in your warehouse. Once the receive process is complete, the inventory should be available for customer orders as soon as possible. To accurately track inventory all the locations in the warehouse needs to be appropriately tracked e.g., buffer zones, receive area lanes, carts, trays etc.

When you receive you should affix stickers to the inventory to keep track of it. You need to affix a bar code for the pallet identification and another bar code for the item identification (SKU). We will talk about these identifications in coming articles. This way, you know that particular item is on a particular pallet. Your Warehouse Management Software (or ERP solution) should have workflows to be able to achieve this.

Acknowledge to your Vendor
Once you receive the inventory, acknowledge your vendor about the delivery and let them know of any dependency or damages. Your software should be capable to automatically do this for you.

Do I need to Cross Dock ?
If you have any customer orders pending for the items received, there should be a way to immediately send some of the items to packaging station from here. This way it is cost effective, and you do not have to store the items in warehouse, pick them and process them.

Store in Warehouse
Once the recive process is done, you should store the inventory in trackable locations in your warehouse.

More articles to follow on how and where to store this inventory in your warehouse.

1 comment:

    I continuously continue coming to your website once more simply in case you have posted new contents.