Managing Receiving More Efficiently
Furniture World Magazine
By Dan Bolger
Improving Profits by Managing Receiving
Receiving merchandise into your warehouse or store requires more care than many retailers give to this vital process. Effective receiving is necessary for good customer service and financial management. Receiving is the process of accepting merchandise from carriers, vendors shipping on their own trucks and customer returns. It requires standard procedures and an audit trail.
If receiving is inadequately controlled you may have to accept damages you didn't cause. Through error or deliberate dishonesty, you could sign for merchandise that was never actually received. As you evaluate the efficiency of your receiving department, note how you might gain efficiency by eliminating steps and reducing chances for mistakes or fraud.
ADVANCE INFORMATION: More and more large businesses are getting Advance Shipping Notifications (ASN) by computer-to-computer messages that spell out everything that is on the shipment. These include who the carrier is, pro number and other essential information. Smaller retailers get the same benefit when they receive faxes from their vendors which include all the purchase orders of goods included in a shipment, and possibly more important, information on what isn't shipped. Some trucking companies are also providing similar information. If you use this information smartly, you can speed customer service by planning what should happen when the truck arrives. You will know in advance if you can simply stage the products and deliver them to customers or move display merchandise immediately to the showroom, or store merchandise that isn't going to be sold for three months to a back corner.
IN-TRANSIT SECURITY: If you are getting a full truckload, the trailer doors should be sealed with numbered security seals. Compare the actual number on the seal to the bill of lading and have your employee break the seal. If the trailer has side doors, they must be checked too. Don't let the truck driver break the seal and bring it into the office! One of the oldest theft tricks is to break into a trailer, steal merchandise, and then reseal the trailer with another seal stolen from the shipper. If seal numbers don't match, beware and call the vendor.
Secure the vehicle before unloading with chocks or other devices. Confirm that safety measures are taken before entering the truck. Provide adequate lighting so employees can see what they are doing.
COUNT & INSPECT: Count and inspect merchandise carefully, paying special attention to products susceptible to damage. Certain vendors are notorious for poor packaging and they must get extra care. Look for cartons that are damaged, crushed or punctured. Be sure to carefully inspect the bottom several inches of case good cartons for holes caused by lift truck forks.
Shake cartons containing glass and listen for broken glass noise. In my own warehouse, one vendor's product line had so much damage that I insisted that every carton be opened before the truck left. Fortunately, most manufacturers are trying to do a good job, but there still can be many other problems, including broken legs on wrapped chairs and sofas.
A future article will review handling claims. For now, if you spot damage, it must be noted on the driver's copy of the paperwork. I always keep a Polaroid camera on the dock to document badly loaded trailers (Did they load it with a cannon?) and damaged product. Save the cartoning materials with the product for possible inspection or return to the vendor.
Counting requires absolute accuracy. Assuming you aren't into barcoding, most retailers receive from a copy of the purchase order and mark off the count received and also count off from the carrier's packing list. The receiving tally is the start of the audit trail. This document must contain the required information plus any exceptions such as overages, shortages and damage recorded in detail. Always count twice before signing once!
Checking is the most critical step in the receiving process and receiving is not complete until:
*Receiving documents match the packing list or manifest.
*Discrepancies are noted and fully documented.
ASSIGNING LOCATION: The final step is to assign a storage location or move it to the next area for handling. A staging area for merchandise that can go directly to customers without storing, can be a real money saver. It can also dramatically increase customer satisfaction. Move damaged material to a repair area or if the product is absolutely unusable, refuse it and immediately return it to the trucker (some truckers cannot pick up without a return authorization from their office).
CUSTOMER RETURNS: Customer returns can be a real challenge. Extra care must be taken to assure that the return is in accord with your return policy and that the product hasn't been abused or have missing parts. This can be an opportunity to build on a good relationship, but there are also situations when refusal is appropriate. Do you have simple and clear instructions outlining how your people should handle returns? If not, then you should!
PAPERWORK: When everything is processed, all the receiving paperwork should be clipped together and sent to accounting to be matched with the invoice, freight bill and original purchase order terms. Receiving is both a material handling and auditing process. Bottom line, you must know you have the material ordered, the quantity ordered, received within the acceptable dates, acceptable quality and an accurate record of the transaction.
Daniel Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. Questions on this article or others by Mr. Bolger can be sent to email@example.com.
Contributing editor Dan Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. See many other articles by Dan in the Operations Management article archives on the furninfo.com website. You can send inquiries on any aspect of transportation, warehousing or logistics issues to Dan Bolger care of Furniture World Magazine at firstname.lastname@example.org or call him direct at 740-503-8875.
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