Inventory storage may appear to be a simple process: you order products from a supplier, have them delivered to a warehouse, and place the items on a warehouse rack.
In reality, it is a comprehensive process that must be carried out correctly to ensure the success of fulfillment operations.
How a company receives inventory at a warehouse has an impact on other aspects of the retail supply chain, such as inventory management, picking, packing, and shipping. That’s not to say it can’t be simple when you first start, but as your company grows, the warehouse receiving process can quickly become a mess.
A faulty warehouse receiving process can result in stock control issues and increased operational costs.
The way a company receives inventory in a warehouse affects other areas of the retail supply chain, such as warehousing, picking, packing, and shipping. It’s not easy at first, but as your business grows, the receiving process can quickly become cluttered.
Warehouse Receiving Definition
The first step in the e-commerce fulfillment process is warehouse receiving, which refers to the process of delivering, unloading, and storing eCommerce inventory in a warehouse or fulfillment center. Inventory management and fulfillment can be made easier, more cost-effective, and more efficient with a well-established warehouse receiving process.
The Typical Warehouse Receiving Procedure
Warehouse receiving is more than just buying inventory and having it delivered to your warehouse; it entails several key steps that must be followed correctly to ensure the correct items and quantity are delivered and stored. Here’s an overview of a typical warehouse receiving procedure:
1. Make appropriate documentation and then send your inventory.
Before ordering and delivering inventory, a business owner must complete pre-receiving tasks.
At this stage, the employer determines the number of containers to ship for each item and the packaging requirements for each item (labeling criteria, number of packages loaded per pallet, acceptable package size and weight, etc.).
If you work with a third-party logistics (3PL), you should check their pre-receiving requirements because most of them have their process for sending inventory to their warehouse(s), and there are often steps you must complete before sending them your inventory.
In most cases, you’ll need to create a Warehouse Receiving Order (WRO) label and attach it to each shipment with the barcode visible. This makes it simple to scan the shipment with a warehouse management system (WMS) to retrieve data on the order and ensure that the receiving inventory is accurate and stored correctly.
2. Receive and unload inventory
If you are managing a warehouse, the next step is to meet the shipper at the loading dock and accept workers to unload the required cargo. The receptionist should be able to discuss cargo questions and concerns with the delivery driver.
Ideally, the truck bed should be packed from back to front in the reverse order of the delivery schedule so that warehouse workers can quickly unload other packages without disturbing them.
Depending on the size and quantity of cargo, heavy lifting equipment such as forklifts and pallet jacks may be required for unloading.
3. Count and verify inventory
The warehouse staff inspects the contents of each delivery, including the quantity, the integrity of seals, the product codes/SKUs, and the overall condition of the cargo, to ensure that what’s in the boxes matches what’s listed on the WRO and is expected to arrive.
Inventory counting and inspection can take some time. To save time on the loading dock, some retailers require warehouse workers to count cases or pallets instead of individual items, or to perform regular spot checks. .. Alternatively, you can use the inventory scanner system to automate this process or let 3PL handle it.
4. The product should be stored and filed
After all, inventory has been unloaded and inspected, the final step in the receiving process is to organize and store new inventory in the warehouse.
This step depends on the type of warehouse, the quantity and size of items, and whether the company relies on 3PL partners for inventory storage.
Inventory can be stored on a palette, a shelf, or a bin, depending on the size and quantity of the products. If you work with a third-party logistics provider, it is up to their fulfillment staff to store your inventory most efficiently and cost-effectively possible to save you money on carrying costs.
If you own or lease a warehouse, the company is responsible for storing it based on its fulfillment process. Logistic workers must complete all documentation and validation and enter inventory information into WMS or manually track it.
Where do most businesses go wrong with receiving?
Make sure it is accurate and that all inventory is recorded.
If a warehouse or company lacks a set of steps or checklists for unloading and receiving, they are at risk of inaccurate or lost inventory and can affect the exact inventory quantity.
To avoid inaccurate inventory tracking, the employer provides warehouse workers with a concise, step-by-step list of tasks to follow upon receipt, as well as an ordered list of questions and resources that convey confirmation details are needed.
What happens when your warehouse receiving is optimized?
Optimizing the goods receipt process is an investment that sets a fulfillment logistics strategy on the road to success. Because this is the first step in the fulfillment process, a structured receiving process helps to manage inventory properly and make the right items and the right quantity of those items available for fulfillment.
Here are just a few of the benefits you can expect from streamlining your inbound process.
- More Precise Stock Counts
Accurate stock counts are critical for a company’s ability to manage inventory, avoid stockouts, forecast demand, reduce inventory shrinkage, and maintain a healthy profit margin.
Taking the time to create a comprehensive checklist that staff should follow will help you manage your inventory. It is especially useful when you want to use automated technology to simplify the process and ensure that what is shipped matches what was ordered.
- Lesser stockouts and dead stocks
Out of stock (not enough to fill an order) can cause customers to look elsewhere, lead to negative reviews, and affect the reputation of online brands. There is a possibility.
On the other hand, excess inventory (called deadstock) leaves the business owner with excess inventory that does not bring about a return on investment, let alone profit.
The optimized warehouse receipt process helps you avoid both issues because you can identify receipt issues early. For example, if the supplier does not deliver the order quantity.
- Effective Inventory Storage
Optimizing the receiving process can also impact your inventory storage system, as it ensures that your inventory is stored in the most efficient and cost-effective way possible.
With WMS, after scanning the inventory you receive, employees can get instructions on how to unpack and store the inventory, and how to select, pack, and ship items after the sale.
How to Improve Warehouse Receiving
There are several ways to streamline the warehouse pick-up process. First, here are some best practices you can implement, whether you manage your warehouse or work with a 3PL partner.
- Install inventory management systems.
Warehouse management systems help e-commerce companies streamline their entire supply chain by automating processes.
Implementing an inventory management system gives you real-time inventory counts and more accurate figures for inventory accounting purposes.
When the existing stock is loaded into the warehouse management system, you can view the real-time stock level and see the stock quantity change immediately after the goods receipt process.
With this type of software, you can also easily set automatic reorder points to let you know when to order more products based on each SKU’s forecast.
- Keep track of your inventory metrics.
Proper warehousing processes make it much easier to track inventory and logistics costs. This is especially true if you have inventory in multiple warehouses or fulfillment centers. By using technology to manage all your inventory, you can monitor key sales metrics from a centralized dashboard.
- Conduct inspections.
With a few minutes of caution in advance, you can avoid the hassle and expense of returning damaged, lost, or incorrect inventory when it’s too late. Regular inventory checks, such as physical counts and cutoff analysis, also detect inventory imbalances before they go out of control and notify you of the next inventory receipt.
- Check all documents twice.
Although no one enjoys paperwork, double-checking that receiving inventory matches your purchasing order will save you the trouble of correcting errors.
Once you have implemented the system for all inbound and outbound documents, each document type has a numbering system, and the various forms are labeled in turn. This makes it easier for staff to thoroughly review the documentation and identify missing inventory.