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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

May 7, 2014



Speed & Accuracy Begins At The Receiving Dock

Automating Receiving Operations Improves Customer Service


Holste Says:

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Receiving is one of the most labor intensive, non-value added processes in a warehouse or DC. Therefore, it makes sense to make the process as efficient as possible.
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Previous Columns by Cliff Holste

Sorting It Out : Increase Sorting System Capacity By 20%

Sorting It Out : Operating a High Performance DC Depends On Smooth, Flat Floors

Sorting It Out : Training & Maintenance are Key Factors to Reliable Conveyor System Performance

Sorting It Out : Shippers Operating in a Quick Response Environment Need Real-Time Information

Sorting It Out : Product Sequencing - The "Smart" Way to Build Mixed SKU Pallet Loads

More

Receiving and putaway operations are the beginning of the order fulfillment process. Errors and/or delays in either of these critical operations will cause confusion and disruption in downstream order fulfillment operations and greatly increase the chances for shipping errors.

Receiving and putaway operations should not be confused with unloading, which is for some DCs a totally separate operation often provided by an independent contractor commonly known as a Lumper. A lumper service is a professional freight handler hired to unload and load freight for carriers at warehouses and distribution centers  www.lumpersservice.com.

Regardless of who is doing the physical unloading, in today’s interconnected world DCs that are still using clipboard receiving and verification methods have seriously fallen behind times and are at considerable risk of non-compliance with industry product tracking standards. Paper shuffling on the receiving dock is archaic and out of sync with automatic data capture and electronic information processing technologies. In addition, manually verifying SKU and quantity received then assigning a stocking location is error prone and way too slow.

A proper receiving and putaway operation begins with employees on the dock equipped with hand-held or wearable bar code scanners and radio frequency data communication (RFDC) terminals. RFDC units mounted on lift trucks used in receiving and putaway will further expedite paperless processing.

All the data collected electronically must be managed electronically as well for greater efficiency. Even the most basic warehouse management system (WMS) can do so readily. The WMS receives data from bar code scanning and RFDC units; performs basic functions such as identifying and recording receipts by SKU, updating inventory, directing putaway, and assigning storage locations.

Even with WMS capability internally, your facility's receiving operations need to be linked externally to your supply chain vendors. With electronic data interchange (EDI) links to inbound shippers and transportation companies, receiving dock personnel will know ahead of time the status of inbound shipments. With this type of EDI transaction, known as an advanced shipping notice (ASN), receiving managers can preplan how they'll handle expected inbound receipts.

When receiving pallet loads, request vendors to add bar coded pallet tags (if they haven’t already done so) that can be scanned to identify a pallet SKU and quantity. This information can then be linked to either an EDI or an identifying number in your purchasing/receiving system to expedite putaway.

 

Automate and Streamline Your Receiving Process



Most product manufactures utilize UPC bar codes on cases to identify SKUs. By deploying an automated loose case receiving conveyor system (as shown), cases can be automatically scanned, received, and labeled for shipping or putaway.

 

This practice is commonly referred to as flow-through or cross-dock and works well for many brick & mortar retailers, especially door-per-store operations. The carton is handled once at the receiving dock and once at the shipping dock. In addition to minimizing handling, the inventory is never waiting for processing in the distribution center. Instead it is on its way to the retail outlets where it will be available for sale.




Automating your receiving process may seem like a daunting task. But with careful analysis of your current process and options for improvement, the benefits of implementing automated receiving outweigh the risks. At the end of the day, you will gain a variety of efficiencies:

 
  • Reducing unloading times
 
  • Checking in of the orders you’ve received from your suppliers
 
  • Automatically allocating of product to outbound orders or to other areas in the facility
 
  • Labeling as preparation for shipping and to support cross docking

As an example of a distribution center that has implemented automated receiving, let’s look at a national retailer with distribution centers serving more than 1,000 stores. It has multiple suppliers. It is shipping product on an allocation level to its stores. This particular one was implemented with allocation driven through the WMS.


According to ACCU-SORT SYSTEMS, INC. www.accusort.com , the retailer was originally dealing with a manual process that took up to 24 manhours to unload a trailer. For a floor-loaded trailer, lots of manual labeling, manual counting, and quality assurance steps had to be taken. And, the retailer had to get a store-friendly label onto the carton. As a result of implementing automated receiving, it reduced it’s unload time by up to 66%. The unloading and receiving process was reduced from 24 hours to 4 hours.

ACCU-SORT reports that as the retailer implemented this equipment and improved its procedures and policies in support of automatic receiving, it was able to put more and more of its product through the automated receiving process. It started with 10% to 20% and now it has more than 50% of its product going through the automated receiving process and feeding directly to its cross docking operation.

The result was increased productivity and throughput on an associate level and improved fulfillment response time.

 

The use of printer/applicators expands on the benefits that an automated receiving system provides. While automated label printer/applicators are by no means new technology, advances in equipment design and performance have been made to print and apply labels with more data at higher throughput rates over a wider range of package sizes.

 


Final Thoughts

Receiving is one of the most labor intensive, non-value added processes in a warehouse or DC. Therefore, it makes sense to make the process as efficient as possible. Automated receiving offers the potential to significantly cut operating costs, and it provides a way to streamline the entire order fulfillment process, further reducing costs. For more information see: http://www.werc.org/assets/1/workflow_staging/Publications/798.PDF


Recent Feedback

I am curious how automated receiving is handled with products that are lot controlled. We have numerous products where the manufacturer assigns a lot#. Our receiving personnel have to identify the lot#, quantity per lot# and receive the product with a "Date of Mfg" and "Date of Expiration". We have not been successful in getting our suppliers to bar code this information and in many cases we have not been able to get them to supply this information on their packing slips. We get the lot# information from a "certificate of compliance" provided with the shipment and we have to sort product by lot# to determine the quantity per lot. Once this information is obtained it is manually input into our ERP. We have purchased Infor's WML warehouse management software that we plan to put into one of our distribution facilities. This warehouse will fulfill our local branches as well as ship direct to customers. I am concerned about the receiving process when it comes to lot control requirements. What have you seen other companies do to address this issue?

 

Note From Editor:

 

I am not sure I have a good answer for you.

The easy answer is that many companies receive product from vendors that have bar code information or the type you describe (lot number, expiration date, etc.) or a serial number tied to an advanced ship notice that contains that more detailed information.

You would think your vendors would want to bar code lot number and other information for their own use. It appears there is a lot number on each case, but not in bar code form? Meaning, what are you using to sort by lot number?

If you cannot receive product bar codes from suppliers, your options are limited.

One interesting question is whether suppliers actually know how many of each lot they shipped you or not.  

Obviously, the packing slip or some kind of manifest could provide some of this info to you, if the vendor has it.

Assuming that is a dead end, the only thing I can really think of is to use a wireless data collection device (could even be a smart phone app) in which you enter this information as each case is received/processed. That device could be attached to a portable label printer that produces a bar code label with the appropriate information on it. The data collected could be automatically uploaded to your ERP. The Infor WMS should have a capability along these lines, but may need to be tweaked a bit for your specifics.

You might use a simple system to first print out bar codes on a regular sheet of paper from the COA so that workers don’t have to keep typing in lot numbers for each case – they are scanned in from this bar code sheet, if that makes sense.

But regardless of that, scanning or key entry could lead to errors, such as simply scanning the wrong bar code on the sheet for a given carton. Obviously, someone could mistype a lot number. You would need to have an audit program in place to test/monitor this process.

If you are dealing at the pallet not case level this all still basically applies.

Another thought, if the vendors have information  but just do not want to label the product in this way, is to create a simple web portal where key vendors are asked to enter this information for each shipment. But I am not sure if this would help much, as while you would have the aggregate information for a receipt, but still not know what is what without the manual effort.

Still, you could use that to create bar code sheets, and it would be information you could use to validate your manual counts.

I might have other ideas if I understood the full process better. Would be happy to talk over.

My experience is that today, companies understand that they can help their customers improve their supply chains. In this case, you might get a meeting together with an appropriate manager or executive at these suppliers, and explain how the lack of labeling/ASNs is costing you money. That means their product is more expensive for you than just the price you are paying for it. This is the whole concept around “true cost” versus just the price paid. Something else for your purchasing managers to think about, and again I think most of your suppliers would at least be open to a dialog about how to help you. This is like a 1980s type situation, not 2014.

Happy again to discuss in more detail.

Dan Gilmore






Merle Tanner
VP Operations, Quality & Compliance
Hisco
Jun, 05 2014
 
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