In our previous blog, Step 3: Partnering with Suppliers, we discussed how effective inventory management starts by partnering with suppliers before you even receive your stock. When you consider that effective inventory management is having the right quantity of the right item in the right location at the right time, you can see how important receiving inventory and recording the putting away of goods properly.
Two blogs ago, Step 2: Optimizing the Warehouse Floor, the discussion involved optimizing the warehouse floor, so before you receive goods, you should already have a designated location for them or a general area in which they’re dynamically assigned based on user-defined criteria.
You may have arranged your warehouse around your shipping and receiving docks so that when you pick, pack, or put away goods, those stocked most frequently are closest to the doors. In the discussion about optimizing your warehouse floor, we also indicated that it’s a good idea to store goods that are frequently picked together in close proximity to eliminate travel time.
In 21st-century inventory optimization, nothing is determined by a single variable. In the diagram to the right, you can see an area for bulk or surplus goods; this indicates the reality that goods are often stored in multiple places in the warehouse. For example: if you kit or assemble goods, you may want to have a stocking location near the assembly line. If you have goods that are ready to ship as soon as they are received, it doesn’t make sense to put them away – it’s more optimal to keep them in the staging area.
The following questions, which they should answer before the receipt of any goods, can guide receiving managers and employees through the receiving process:
- What goods are we scheduled to receive today?
- Do the goods need to be inspected and counted?
- If so, at what level of detail?
- Can I accept the goods?
To make these questions easier to answer, you can request advanced shipping notifications from your partners and update purchase orders automatically in your ERP system – including information about return merchandise authorizations from your customers. Another method is to schedule receiving for specific times during the day and assign times to vendors when possible.
One key point to effective receiving is receiving the goods in your systems as soon as possible. The receipt of goods in your system can answer the questions:
- Can I fill orders with this receipt?
- Where should I put the goods?
We ask these questions because our goal is to eliminate waste, and the best way to do so is with accurate and reliable data. To this end, back order fill reports, available to promise, production requirements reports, and other similar reports are invaluable to waste reduction and elimination. One benefit of the reports is that they allow your business to keep goods in the staging area that do not need to be put away. And, as your warehouse becomes more sophisticated, an advanced warehouse management system with bar code scanning can also be helpful when putting away your goods.
For more information on how SAPDistribution.com can help you achieve improved receiving efficiency, please contact us today.
You can also read the first installment of this blog series, Step 1: Accuracy in Your Warehouse and Information Systems.