Receiving is the first process in the warehouse’s four walls. It is the sequence of steps to unload inventory, inspect it, transfer it systematically to the warehouse, and stage it for putaway.
Process Steps
Receiving starts when a truck is docked at a door. Employees then open the truck and unload the freight. The receivers inspect the product and complete the system transaction to transfer the inventory to the warehouse’s systems. After the receiving transaction, the receiving team readies the product for putaway.
Ordering
Let’s back up a moment. How do goods get to the warehouse? Usually the warehouse’s organization triggers demand with a Purchase Order (PO) the goods shipper. In the case of a stock transfer between warehouses, the Stock-Transfer-Order (STO) serves the same purpose. This is the record of the request and order for goods to ship.
Once the supplier ships the goods, the shipment information is often sent ahead of the shipment arriving in an Advanced Shipment Notice or ASN. The ASN informs the receiving warehouse of what is shipped. This allows the receiving site to compare shipped and received quantities and resolve any differences.
Receiving
Let’s return to receiving. Once the receivers unload the shipments (usually a truck), then they can inspect the product and receive it into the warehouse inventory. This decrements inventory from the shipping site and adds it to the receiving site’s inventory. At this point the product is available to the receiving warehouse for handling.
Receiving can be done against the PO or ASN, or can be done “blind.” Blind receiving is where the receiver processes the shipment without knowing what was shipped. Receiving against the PO lets the receiver know what was on the shipment. Different processes are appropriate for different operations and levels of automation. For example, blind receiving may make sense on truckload shipments from suppliers in a sophisticated operation, but it may not be the best process for a paper-driven receiving process, one that allows POs to be closed within certain tolerances, or one where the receiver must know what was shipped.
Inspection
If the product fails the inspection, it can be rejected or processed in the receiving warehouse’s quality processing.
Other exceptions that occur include Overs, Shorts, and Damages, or “OS&D”, which can result from errors from the shipper or in-transit problems. Receivers should record these during receiving so that inventory records are accurate and financial accountability for the shipment is correct.
If the receivers process the inventory incorrectly then inventory problems will go downstream to putaway and maybe even to picking. This will cost many times the effort of getting the receiving accurate. So it’s important to have correct receiving transactions, even if problems need to be set aside before going further in the warehouse.
Stage for Movement
After the warehouse receives the shipment, the receivers will stage the product for movement.
In conventional warehouse processes, the next step is movement to putaway.
In some process flows, the product may go to a reserve location, a forward pick location, or even straight to shipping, a process known as cross-docking.
For small items this may mean placing them in totes or on carts for the putaway team. If the product is palletized, then the pallets may be staged and placed in aisles for the forklift drivers to place in racks. For automated sites the product may be moved to the robotics induct locations where it can be fed into the automation system. But the bottom line is that the product must move to the putaway process.
Reverse Logistics
Receiving in reverse logistics is a bit different. For example, there are often no POs. The returns center might get a Return Merchandise Authorization, or RMA. The inspection steps are more thorough because the site must assign a disposition to the return items. The disposition designates how to process the product downstream.
While the basic steps are the same, reverse logistics is much more complex than conventional receiving. Read more in-depth on reverse logistics processes in a future post.
Conclusion
Receiving is the first process where product comes into the building, is inspected, and the inventory transfers to the site. After the receiving process completes then the product is moved to its next step. Receiving paths through the building can direct product to storage locations, pick locations, or outbound.