Warehouses are at the heart of many businesses. But whilst storing inventory may seem as simple as goods in/goods out, operating a warehouse is much more complex.
Did you know most warehouse issues start in receiving? A small error in the receiving process can lead to much larger problems further down the line. For example, a miscount of items received could leave many customers empty-handed and unhappy later on.
For this reason and many more, the warehouse receiving process is critical for maintaining the integrity of inventory systems, as well as making sure there’s enough stock for customers. Failing to implement the correct warehouse receiving process can cause issues with inventory management, picking, packing, and even shipping.
As your business grows, it can get very messy, very fast. But fear not! Before you give up and decide to use some sort of business process services to do the work for you, we’ve put together this handy guide.
Read on to find out how to optimize your warehouse receiving process.
What Exactly Is ‘Warehouse Receiving?’
Warehouse receiving is the process of receiving a delivery, processing those items, and storing them in your warehouse.
An optimized warehouse receiving process should make inventory management easier, reduce costs, and improve customer satisfaction, retention, and your eCommerce conversion rate. Great, right?
A standard warehouse receiving process follows these four steps:
- Create documentation before receiving inventory
- Receive and unload inventory
- Count and confirm the inventory
- Store products in the warehouse, log your files.
Unfortunately, businesses get this wrong far too often.
How Most Businesses Get Receiving Wrong
The objective of warehouse receiving is to ensure the unloading, checking, and storing of your inventory is done efficiently and correctly.
A common problem businesses face is not having the correct procedure in place for completing the receiving process. Without a checklist and fully trained staff, items can slip through the net and inventory counts become incorrect.
For example, a pallet of dog toys has been counted twice, meaning you have 500 fewer toys than your inventory lists show. You’re now stuck with having to refund any customers who ordered a toy that was never in stock. This is time-consuming and takes resources away from other areas.
To avoid this, the whole warehouse receiving process needs to be optimized. Warehouse staff should be provided with resources that clearly display a streamlined, step-by-step list of tasks to follow.
The aim is to make your warehouse receiving process as efficient and accurate as possible. And with all sorts of tech and automation now available, from sales marketing automation to chatbots, this can help in your warehouse optimization.
Benefits of Optimizing Your Warehouse Receiving Process
Before we look at how to optimize your warehouse receiving process, let’s examine some of the benefits.
As it’s the first step in fulfillment, optimizing your warehouse receiving procedure will set you up for success with your fulfillment strategy. Some of the major benefits of optimization are:
- Accurate stock counts
- Avoiding overstocking or understocking items
- Higher efficiency levels
- Better customer satisfaction rates
How to Optimize Your Warehouse Receiving Process
The following are some of the best ways to optimize your warehouse receiving process. These work whether you own your own warehouse or partner with a third-party logistics team.
Use Inventory Management Software
Plenty of process management software exists these days to help you run your business, often utilizing AI to automate tasks and make them easier.
By automating your inventory management system, you can gain deeper insights into real-time inventory data, allowing you to monitor stock and isolate issues. Once new stock comes in, your inventory management system numbers go up. When it leaves, the numbers go down.
This ability to virtually oversee your warehouse inventory is a great way to improve your business procurement process. For example, your inventory management system shows you 90 percent of a product is still in the warehouse. What does this mean? It’s time to find new products or change suppliers. You need products to fly off the shelves rather than stay there forever.
Utilizing software as part of your warehouse receiving process is the way forward.
Analyze Your Inventory Metrics
A good warehouse receiving process will decrease the time and money spent on tracking and logistics. This becomes more important if you’re operating multiple warehouses at different locations.
By utilizing the available technology, you can monitor distribution metrics from all your warehouse sites from one computer via analytics. For example, you can monitor:
- The average cost to store items
- Total number of shelves/pallets/containers in use
- Stock levels at each warehouse
Having these sorts of insights right from the start of your warehouse receiving process brings higher efficiency and drives down the cost of requiring staff for extra duties. This will gain you an advantage over competitors.
Carry Out Inspections
Fail to prepare, prepare to fail. By carrying out the correct inspections, you can prevent the hassle and cost of returning stock that’s damaged, missing, or incorrect.
Routine inspections should be part of any successful warehouse receiving process. Periodic inventory checks such as unit counts and cutoff points will highlight imbalances and allow you to take action before your next lot is received.
Again, using the right software can help with inspections. Programs with built-in inventory management can help you with warehouse audits, as well as give real-time updates on the findings.
We’re all guilty from time to time of skipping over paperwork too quickly and making small mistakes, but those extra seconds of attention can save you hours of problems in the long run.
Double-checking documents is vital in the warehouse receiving process. When new stock comes in, make sure to double-check that it matches the corresponding purchase order. If there’s someone else nearby, you could even ask them to check for you too.
The best solution for avoiding documentation mistakes is to implement a system for all your receiving and sending documents. Group them and label them sequentially so staff can check stock with ease and confirm everything is correct.
Always having up-to-date and accurate documents allows you to give better answers to customer queries and solve complaints quicker.
Collect and Analyze Logistics Data
Operating an efficient warehouse means collecting and analyzing the right data. Only then can you be confident your operations are fully optimized and you’re avoiding common mistakes. Some of the key data points to look at are:
- Docking to stocking time. The time taken for new stock to be received, processed, and stored.
- Dock utilization. Check everything from docking doors to space to ensure you have the required working space.
- Error reports. Errors occur most often at the warehouse receiving stage. Scanning labels can throw up errors that need to be reported.
- Supplier issues. Errors sometimes occur with the shipper before you even receive your inventory. Check paperwork for incorrect quantities, products, or paperwork mistakes.
By keeping tabs on the above data points, your warehouse receiving process will run more efficiently with less potential for mistakes. And, with plenty of ways for AI to supercharge your business and automate tasks for you, it’s easier than ever. Result!
With all the correct procedures in place and technology on your side, your warehouse is ready to run at its optimum level, but are your staff up to the job?
Ultimately, a warehouse is run by the people who work on the frontline. Whether it’s day shifts or night shifts, your staff need to be aware of your processes to ensure smooth operations.
Train your staff to the adequate level and make sure they know your processes inside out, as well as any software or scanning machines they’re required to use. If a staff member is new, include a training plan as part of their induction.
Too many warehouse operatives end up on the shop floor with minimal guidance. The result? The likelihood of human error increases tenfold, and there’s the risk your automated systems could get messed up if the wrong data is inputted.
No matter how complex or enormous your business and warehouse are, it all starts with the receiving process.
If your receiving process is well optimized and error-free, the rest of your supply chain should run smoothly. But if miscounted or damaged items or other errors slip through the net, your manufacturing process will be impacted further down the line. You also risk harming customer relationships and brand image.
Worryingly, far too many warehouses still operate without technology and on a more pen-and-paper basis. This invites errors and takes far too long. Implementing process changes takes time, but with patience and effort, a better future awaits.
So, follow this guide and learn how to optimize your warehouse receiving process today.