How well does your company handle goods receipts? Many warehouses don’t do as well as they could, leading to product losses, delayed stock availability , lost revenue and disappointed customers. Here Esther Dutton from MACS Software, a leading independent developer of warehouse management software, looks at the challenges and the solutions.
The principle is straightforward: to run an efficient warehouse, either managing your own stock or as a 3PL operator, you need to know what stock you have. That’s obvious. But so many warehouses do not manage the goods inwards process as effectively as they could, causing themselves problems later, reducing their profitability and leaving them vulnerable to possible fines from retailers.
Goods inwards can prove to be more complex than other warehouse functions. It is part of the backbone of product data, get it wrong and the wrong information can remain with the product throughout its journey in the warehouse.
Identify and record
Goods need to be identified, this could be checked against a purchase order (PO), Advanced Shipping Notification (ASN) or with the driver’s paperwork. The information required will depend on what is being received, for example: weights and measurements, batch details, product codes, health and safety information and ‘use by’ or ‘sell by’ dates.
To streamline the process, data can be imported electronically through the PO or ASN; alternatively, if the items carry a bar code from the supplier, the information can easily be scanned and recorded. If goods arrive un-booked, however, this detailed product information may be lacking and it is very tempting to simply enter the limited information that’s available and put the goods on the shelf.
Information on delivery notes can be very sketchy: often the only information shown is the product and the quantity, and even this can be wrong. If your delivery note shows 2000 items and there are only 1800 you, as the warehouse operator, will be liable for the difference, if you don’t spot the discrepancy. With tight margins a simple error of this sort can have a disproportionate effect on profitability.
Many retailers (especially the supermarkets) have a policy of not accepting goods that have too short a shelf life even if they are within their sell by dates. Some will reject items simply because the (still valid) sell by date is earlier than a previous batch received. When this happens the warehouse operator could expect a fine from the retailer, which will seriously eat into margins and, if it happens too often, will affect the trading relationship. The key to preventing these problems, is to collect product data and manage it properly throughout the warehousing and distribution process.
As well as identifying the product and recording the information there are also physical requirements. A certain amount of space is required to sort the products and possible unpack, make solid to SKU (all the same products on one pallet). This in turn can create rubbish or recycling, which needs to be stored and disposed.
The key is accuracy and fulfilling the data collection as dictated by the customer. Through the MACSwms setup each product can have compulsory data fields to be completed so ensuring that the correct data is collected at the correct time. MACSwms also includes a Receipt Verification System that highlights any discrepancies between goods received and those detailed on the ASN or PO. These anomalies can then be checked physically to avoid any possibility of goods being short delivered.
The secret is to know what stock is in the warehouse at all times. This helps to reduce product losses, enables efficient stock rotation, speeds the picking and distribution process, maintains profitability and ensures that customers receive the efficient service they expect.
Collecting all the required data at the goods inwards stage helps to avoid errors and delays further down the line.
MACS SOFTWARE LTD
Esther Dutton
Tel: 01455 558228
Email: estherd@macs-software.co.uk
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