29 October 2022 Posted by: admin 7 Activities of Warehousing
Scan receiving of stock in the Logistics Cloud Co. WMS

Scan and you shall Receive

The 7 Key Activities of Warehousing

What you need to know to get control of your warehouse

When does stock tracking start in your warehouse?

Is it when it the stock arrives? Or is it when it’s recorded by your system? In traditional inventory systems this happens some time after the stock is received. Typically what happens is this:

1. Unload the delivery and stage it in the receiving dock.
2. Often you have to break down a pallet and spread out all the items to make sure you have everything.
3. Then you can check it off against the delivery docket or invoice from the supplier.
4. Then you restack the stock on to a single pallet ready for put-away to the racks.
5. Then the stock is put-away “somewhere” in the racks and shelves.
6. The delivery docket/invoice is put in a tray for later data entry of the receipt in the business system. This can be minutes, hours or even days later depending on the particular circumstances in the business.
7. The paperwork is filed and/or sent to accounts for payment.

This is far from real time stock control and that item cannot be used to fill orders until it is received in the inventory system. Also, the longer the delay between the physical receipt and the data entry into the business system, the higher the risk of the newly received stock being lost or damaged.

The stock id is by human vision and the data entry is manual and there is often some degree of error in identifying items, quantities or in the data entry. Usually these errors are not picked up until there is a stock discrepancy found during the picking process and so much time has passed that it can be difficult to determine if there was an error during the original stock receipt or something else happened in the meantime. It’s usually too late to make a claim on the supplier and you will also be disappointing a customer when you discover the stock is missing or is the wrong item entirely. That’s assuming you found it at all in a warehouse without any location tracking, which unfortunately is still the norm in many warehouses (more on that next week as well).

There are also quite a few different transactions that lead to a stock receipt, most businesses will have at least 3 of the ways listed below

Purchase orders

A purchase order (PO) is a transaction in your business system to record the financial purchase and receipt of inventory and initiate a payment to a supplier. It can also be used to create inventory if you track inventory in your business system (not everyone does). Receiving stock against a purchase order is the most common method for creating inventory in your system. The value of any transaction is that it links a defined business intent with the administrative processes that make it happen. So, to break it down into steps

• You agree to buy 3 units of item X, and tell the supplier via a purchase order,
• The supplier creates a sales order from your purchase order,
• When the stock arrives, the PO tells the warehouse staff that the transaction is legitimate, and they should receive it and sign the invoice or docket.
• The signed docket or invoice is used to confirm the stock receipt against that PO in the business system.
• Accounts payable have the PO, stock receipt and invoice and can pay the supplier to fulfill the original agreement.

The delivery may contain a complete or partial supply of one or more purchase orders. The paperwork must be managed and entered into the system correctly for everything to work as it should. Anyone who has had to juggle large and complicated deliveries across multiple purchase orders and with many pages on the delivery docket knows how difficult it can be to reconcile what is physically in front of you with the paperwork. When the data entry happens the delivery docket is usually not in the same sequence as the purchase order which also results in much shuffling of paper work and potential entry errors.

But what if there was a better way?

Scan and you shall receive!

The Logistics Cloud Co. WMS gets rid of all the paperwork and gives you a much simpler way to receive stock. Using a mobile scanner and a smart workflow simplifies the physical task considerably. It works like this.

  1. Unload the delivery and stage it in the receiving dock. You enter the PO number, scan an item and key in the quantity received.
  2. The stock is now received in the WMS, and you are tracking it straight away.
  3. You move the received stock onto a pallet for put-away and repeat steps 2 and 3 until you have received everything. Confirmation of the PO in the business system happens automatically in the background.
  4. When the pallet is full you put it away directly to a scanned storage location or stage it for put-away later or by another operator who can put-away stock as you are receiving it. The stock is tracked by location and operator all the way and you never lose track of it.
  5. The paperwork (which you only needed for the PO number) is filed and/or sent to accounts for payment.

Scanning the items during receipt ensures you correctly identify each item and that it is on the related PO. The mobile workflow eliminates the paper shuffling and ticks and scribbled counts and lets you receive in the way the stock presents physically.

The stock is available in your business system to fulfill orders and can be picked as soon as you put it away. If you are in a hurry you can receive and put-away directly to a storage location or cross dock area, so items are immediately ready for picking.

Let me count the ways (to receive)

Receiving stock into the warehouse comes through a variety of channels and transactions and you need to be able to handle them all.

Delivery or ASN

Container loads and large deliveries are often a mix of items from multiple purchase orders, wouldn’t it be great if you could receive them on one transaction? You can, and it’s called an Inbound Delivery or Advanced Shipping Notice (ASN) in GS1 speak. The receiving process in the LCC-WMS is the same but you don’t have to bounce between purchase orders.

Blind Receipt

Did you just buy some stock on your credit card from an auction or paid cash for a load of overstock from a liquidation sale? No purchase order? No problem! Receive the stock with a Blind Receipt workflow, the workflow is similar but without a PO and you can receive any item.

Warehouse Transfers

Got more than one warehouse? Then you’re probably also transferring stock between them. One warehouse’s shipment is the other warehouses receipt. Create outbound and inbound orders and receive the transfer just like it was on a PO.

Sales Returns

Customers return things, it’s a sad reality of selling things. When it happens it’s always messy and complicated but at least you can make it easy for the warehouse to receive the returned stock and put it away or discard it if it’s not saleable. Depending on how the integration with the business system is done this will either be special inbound order type to receive like a PO or a simple Blind Receipt with a return reference so you can track it.

Warranty and repairs

You may want to handle returned stock for Warranty and Repair with a simple paper trail rather than on your system. But if you want to track it in and out of your repair process in the WMS then a simple Blind Receipt with a warranty reference number will do the job.

Found Stock

Sometimes you find stock that has simply “fallen off the system” in some untraceable way, usually due to a mis-pick or receiving error that was never noticed. You’ll often find this during a stock take when you have more of an item than you should have. This is normally handled by adjusting the stock in with an associated reason code so that you have a record of why.

WMS vs Accounting, Inventory or ERP business systems

A Warehouse Management System manages the physical movements of stock in your warehouse. Your inventory system does not. Most business systems are accounting systems and only track financial movements of stock. If you only have an inventory system, then you have to manage your warehouse with your memory and pieces of paper or maybe a spreadsheet.

A WMS will usually be of value to you if you have one or more of these issues

  • High order volume, especially if they are small orders for online retail a lot of SKUs to manage or they are high value SKUs
  • enough stock holding that keeping track of it is becoming a problem and time and money is being lost.
  • Lost stock, misplaced stock,
  • Mis-picks and returns,
  • Slow order fulfillment,
  • Excess labour costs,
  • Inability to hire casual staff due to process complexity and
    the need for business experts to identify your products

If these are the issues you are facing in your warehouse then it might be worth booking in a discovery call to find out how you can get control over your warehouse.

Download the Infographic

7 Key Warehouse Activities