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How to Improve Receiving in a Warehouse in 5 Steps

in: Company News, Enterprise Resource Planning (ERP)

No matter what the size of the company, at some point, you’ll find yourself asking how to improve receiving in a warehouse. Although it might not be the first place to look to improve warehouse efficiency, it’s often at the center of other warehouse issues.

Upon first consideration, you may wonder, “Why receiving? Why not picking or shipping?” Receiving is the place where goods enter a warehouse. If the process for receiving goods isn’t standardized, the results can lead to misplaced items, slow replenishment of stock, over- or under-ordering items, stock spoilage, and many other problems. Standardizing the receiving process in your warehouse is the first step to improving warehouse efficiency.

Can All Receiving Processes Be Standardized?

Yes, but with one caveat: you may need to adapt the suggestions below to your industry. A warehouse receiving packaged foods for a supermarket versus a warehouse receiving auto parts may need to treat their shipments quite differently. Food distribution warehouses may need refrigerated or frozen units to handle incoming shipments and working with vendors to ensure proper labeling may be one of the most important things you can do to streamline the receiving area. Take these suggested steps and adapt them as necessary to the products your warehouse handles.

5 Steps to Improve Receiving in a Warehouse

A discussion of how to improve receiving in a warehouse begins even before goods reach the warehouse.

Step 1: Pre-Receiving Communication

Suppliers must ensure all stock bound for your warehouse is labeled correctly. Your warehouse manager should work with individual suppliers to standardize label position, information, and other facts.

  • Are inbound shipments on pallets or loose items? Knowing the answer to this question will help you have the right equipment and personnel ready to unload the cargo in receiving.
  • The number of items in each container: Ask for a count ahead of time regarding the number of items on the pallet or in each container or box. Have that number written on the exterior packaging to make it easy for your staff to tally and compare the results to the order.
  • Which carrier or transporters is bringing the shipment? Many companies use third-party transit companies to deliver loads, but this can get confusing. ABC Transport means nothing to you when you’re expecting a pallet of widgets from the Acme Widget Company. Knowing that Acme has subcontracted to ABC can help you quickly match inbound shipments to orders.
  • Label information: Does your supplier use RFID chips or barcodes? Work out the label instructions with the supplier. You may need a barcode scanner or chip reader on hand that can read the information into your ERP system.
  • Label position: If peel and stick labels are used, ask your supplier to apply them consistently to each pallet, carton, or container. This will help your team swipe and scan quickly and easily.

Step 2: Have the Right Number of Staff to Receive Shipments

The second step to improve the warehouse receiving process is to ensure you have the appropriate number of staff on hand to process shipments. Estimating the number of people and hours it will take to process receivables should be based on data.

Review reports from your ERP for manufacturing system, warehouse inventory software, and warehouse management system (WMS). Data reports from both ERP and warehouse software can help you estimate how long it took to unload similar shipments in the past, as well as the types of equipment and number of personnel needed. From this data, you can schedule resources with greater accuracy. Some reports estimate labor costs at 50 to 70 percent of a company’s average warehouse budget. Accurate estimation and scheduling can save a great deal of money.

Step 3: Focus on Safety

When the question is how to improve receiving in a warehouse, terms such as efficiency, productivity, and timeliness come to mind. Safely handling goods in receiving is also an essential part of improving receiving in a warehouse.

First, of course, is the safety of your workers. Speed is critical, but safety should never be sacrificed to speed. Although you want to get the work done quickly, make sure everyone follows proper safety procedures, especially when working around forklifts and other heavy machinery.

  • Make sure trucks are correctly docked in the cargo bay.
  • Check to make sure safety brakes are engaged.
  • Note the weight of the trailer and cargo. Check to make sure it can also take the weight of the forklift as pallets are moved off of the truck.

Next is the safety of the cargo. Perishable goods should be kept at the appropriate temperature, so double-check transit thermometers, and ensure that products are moved quickly from the truck to the proper temperature-regulated environment.

Seals can be compromised during transit. Receiving personnel should check all seals, locks, and other safety features on drums, barrels, and containers, especially when moving chemicals, liquids, and anything flammable or dangerous.

Step 4: Review the Cargo Verification Process

The cargo verification process is an important step when considering how to improve receiving in the warehouse. This step matches the bill of lading to the order and verifies the correct quantity and type of products were included in the shipment.

If you have a process in place to check shipments, review how well it is working. Does it need to be updated or improved? Items to check during receiving include:

  • The description of the goods: did the supplier ship the correct items?
  • Quantity received: does it match the order?
  • Damages: was anything damaged in shipping?

Record any discrepancies between the order, bill of lading, and receipt. Report them immediately to the supplier so replacement or credits can be issued, or damaged items returned promptly.

Counting and verifying damaged cargo can be time-consuming, but the use of barcode scanners and warehouse management software can make this process efficient. For large orders, a spot check of pallets and containers may be all that’s needed to verify items were received in good order.

Tracking suppliers using your ERP software or WMS can help you track those companies with a high proportion of damaged goods. Those suppliers can either be removed from your approved vendor list, or you can contact them to try to negotiate better terms or lower shipping rates. With the data from your system, you’ll be in a better position to spot any suppliers with chronic shipping issues such as damages, delays, or mistakes.

Step 5: Stock the Warehouse

The last step after verifying the contents of the shipment is to move it promptly to the right area of the warehouse. You may need to update or replace barcodes on pallets or containers, scan them into the WMS or ERP system, and update bin and shelf numbers to reflect the new counts.

It’s a good idea to check barcodes and labels throughout the warehouse, especially when moving cargo from receiving into long-term storage. Stickers can peel, fade, and fall apart over time. Warehouses can be dusty places with fluctuations in temperature and humidity, which wreak havoc on cardboard packaging, paper labels, and similar materials. Replace any tags that have faded over time or become illegible.

The Right Software Helps Improve Receiving in the Warehouse

The right software, along with proper management and a logical process, is the way to improve receiving in the warehouse. ERP software such as Acumatica, or Sage 300cloud, combined with inventory management software, provides managers and receiving clerks with the data needed to make sound decisions regarding scheduling personnel, managing space, and equipment. Data-driven decision making improves the bottom line by eliminating guesswork.

For more information on Acumatica, Sage ERP, and other products to improve warehouse efficiency, talk to the experts at Mindover Software. Mindover Software provides ERP software consulting, training, and implementation. For more information, please, contact us or call 512-990-3994.