THE RECEIVING PROCESS

Pre-Receiving Purchasing

The receiving process really starts when the purchasing department creates a purchase order (PO) with a vendor. The vendor notifies both the distribution center receiving clerk and purchasing department when they are ready to deliver an order. The distribution center receiving clerk starts the appointment procedure.

Appointment Scheduling

The appointment scheduling procedure will follow some of these steps.

The clerk selects the appointment grid for the main receiving warehouse. At this point, the clerk determines whether the requested appointment is for a live unload or for a trailer drop. This issue is not to be overlooked, as an appointment for a trailer drop can be more flexible than one for live unloads, where personnel scheduling is part of the equation.

Once an appointment date and time has been agreed upon, the clerk requests a bill-of-lading (BOL) number. The clerk will also ask whether the BOL is associated with an Automatic Shipment Notice (ASN). If this is the case, most WMS systems will populate all the PO information associated with the BOL from the ASN. If the vendor is unable to supply and ASN then the clerk manually keys the PO numbers in.

If the system is properly linked with the purchasing department’s computers, it can verify that the purchase order is valid and give a confirmation back to the clerk who will give an appointment confirmation number to the carrier. The confirmation that comes back to the clerk should include the items included on the purchase order. This information is saved in the system for the receiving team to use to determine staffing for unloading the container on the day it arrives.

Provided that there are no further trailers to be scheduled by this vendor, this concludes the appointment scheduling process for this vendor.

Appointment Management

Appointments are listed on an appointment sheet that goes out to your security team on the day of arrival. The receiving management determines the receiving door to be assigned to each arriving trailer based on the items to be unloaded, and whether the vendor is a trusted vendor (that is to say that the vendor has a history of inventory count accuracy matching the BOL’s and PO’s).

The security team uses this information to regulate the flow of freight into your receiving area. Many companies are now requiring that a vendor be at the distribution center at the time of the appointment, and impose penalties for being late. There is often a staging area for the trucks just outside of the receiving gates so that drivers can safely park and await the call to approach the gates. When a vendor is called to the gate, they are given the door number that they are to place their trailer at. The security team then makes a notation that this vendor has checked in, often in a linked computer system. This tells receiving that they are arriving which puts the internal operation into motion.

Unloading and Verification Scenarios

There are several possible receiving scenarios for unloading and verifying the freight received, but before we go too far into this part of the discussion, you need to know what an @ and an & location symbol means. Both are generic location symbols given to basic or flow through item pallets that the system was unable to assign a physical location for. These usually are resolved by the Inventory Control/Quality Assurance (ICQA) team.

Scenario One: Receiving from a 'Trusted Vendor' using the ARDE method

The first scenario we will discuss is used when you are receiving merchandise from a ‘Trusted Vendor.’ In this case you can use the Automatic Receipt Data Entry method to print pallet license plate labels, prepare the paperwork, and resolve @ and & location issues. This can all be done in advance of the trailer arriving at your facility. The paperwork is kept in the receiving clerk’s office until the trailer is staged at a receiving door.

When the trailer checks in at the security gate, it is assigned a door location. Security then sends a notice to the receiving clerk either by computer or telephone giving the specifics of the trailer just checked in. The clerk then gives the paperwork that was generated in advance to the receiving supervisor who places it on a clipboard next to the receiving door.

As the trailer is unloaded, the product is counted and reconciled against the paperwork. It may need to be palletized (placed on pallets). If this is the case, it should be placed on pallets by PO number and product type. It is at this point that any major discrepancies are noted. Once completed, the freight bill is signed by the unloader and the supervisor.

Freight Verification Procedures for Scenario One: Automatic Receipt Verification

At this point the purchase order is reopened, and one of three methods of verification is used. The first method is used for ‘Trusted Vendors’ and is the Automatic Receipt Verification process. This is where the labels are applied to the pallets, the freight bill is signed by the receiving clerk, and the PO is closed.

Freight Verification Procedures for Scenario One: Visual Verification with Report

The second method is called a Visual Verification with Report. This requires a Full Screen Receipt Verification where the labels are matched with and then applied to the appropriate pallets, additional discrepancies are noted, the freight bill is signed, and the PO is closed.

Freight Verification Procedures for Scenario One: Visual Verification with RF

The third method is called a Visual Verification with RF. This is where a Radio Frequency scanner is used to ‘verify’ the shipment. Labels are matched with their pallets and applied. They are then scanned to confirm that they are on the correct pallets. Any quantity discrepancies are fixed by typing in the actual number received into the RF scanner. The freight bill is then signed and the PO is noted as closed in the RF scanner.

Scenario Two: Full Screen Receipt Data Entry method

The second receiving scenario is called the Full Screen Receipt Data Entry method. It is used when there is a driver and warehouse directed put away method being used. It gives the receiving team the ability to ensure valid locations exist for each item being assigned a ‘Slot’ by the WMS system. It is often used when either there was no ASN provided, or when the ASN is not accurate when compared to the purchase order.

In this scenario, license plate labels are printed in advance, @ and & locations are resolved, and the paperwork is printed in advance and placed in the clerks office awaiting notification from security that the trailer has checked in.

When the trailer checks in at the security gate, it is assigned a door location. Security then sends a notice to the receiving clerk either by computer or telephone giving the specifics of the trailer just checked in. The clerk then gives the paperwork that was generated in advance to the receiving supervisor who places it on a clipboard next to the receiving door.

As the trailer is unloaded, the product is counted and reconciled against the paperwork. It may need to be palletized (placed on pallets). If this is the case, it should be placed on pallets by PO number and product type. It is at this point that any major discrepancies are noted. Once completed, the freight bill is signed by the unloader and the supervisor.

Freight Verification Procedures for Scenario Two: Visual Verification with Report

At this point the purchase order is reopened, and one of two methods of verification is used. The first method is called a Visual Verification with Report. This requires a Full Screen Receipt Verification where the labels are matched with and then applied to the appropriate pallets, additional discrepancies are noted, the freight bill is signed, and the PO is closed.

Freight Verification Procedures for Scenario Two: Visual Verification with RF

The second method is called a Visual Verification with RF. This is where an RF scanner is used to ‘verify’ the shipment. Labels are matched with their pallets and applied. They are then scanned to confirm that they are on the correct pallets. Any quantity discrepancies are fixed by typing in the actual number received into the RF scanner. The freight bill is then signed and the PO is noted as closed in the RF scanner.

Scenario Three: RF Receiving method

The third receiving scenario is called the RF Receiving method. It is used for one step receiving with generic license plates. Product location set-up must have been done advance. It is most commonly used for deliveries from parcel companies such as United Parcel Service, Federal Express, Airborne Express, Roadway, or another parcel delivery service. Stores often use this process when receiving packages this way.

Unlike the prior two scenarios, there are no license plates to print, and the paperwork cannot be created in advance because there is no way to know what is actually being delivered until it is scanned in using the RF Scanner.

As in the previous scenarios, the security team checks in the trailer and notifies the driver of the receiving door assigned to the shipment. They then notify the receiving clerk who notifies the receiving supervisor of the arrival.

As the trailer is unloaded, each item is scanned using the RF scanner. The items are then palletized by PO number and product type where appropriate, and a final count of items is taken from the scanner. If this count matches the drivers BOL then it is signed. If not, any discrepancies are resolved and the BOL is then signed with the discrepancies noted on it. This is a very important step. Freight claims are easier to validate when the issues are noted on the BOL and both the driver and the receiving agent have signed it. 

Freight Verification Procedures for Scenario Three: RF Verification

Where you might have used RF Verification for the previous two scenarios, you must use the RF Verification method for this scenario. This process includes tagging the pallets, writing the put away location on the license plate, and resolving any discrepancies via the RF Scanner prior to releasing the load.

Scenario Four: RF Stocker Receiving method

The fourth receiving scenario is used for controlled substances, firearms, high value electronics, and other items where a high level of security is appropriate. It is called the RF Stocker receiving method.

As in the previous scenarios, the security team checks in the trailer and notifies the driver of the receiving door assigned to the shipment. They then notify the receiving clerk who notifies the receiving supervisor of the arrival. In this scenario, the person who will actually be stocking in the products will perform all of the tasks of receiving and putting items away. This ensures a verifiable chain of custody for the security of the items.

As the trailer is unloaded, each item is scanned using the RF scanner. The items are then palletized by PO number and product type where appropriate, and a final count of items is taken from the scanner. If this count matches the drivers BOL then it is signed. If not, any discrepancies are resolved and the BOL is then signed with the discrepancies noted on it. This is a very important step. Freight claims are easier to validate when the issues are noted on the BOL and both the driver and the receiving agent have signed it.

Freight Handling and Verification Procedures for Scenario Four: Stocker Physical Putaway

Once the trailer has been released, the receiving agent physically takes the items to the storage location and secures them. Once done, the agent inputs the location code for the products into the RF system and closes the PO. In some cases the agent will need to input seal numbers into the RF system. This is done prior to closing the PO.

These are just some of the many processes that have been devised to handle inbound freight at a warehouse of distribution center. Depending on the complexity of the facility, additional procedures may be implemented, or some of the procedures noted here may not be necessary. What is not discussed here is the actual WMS activities that take place. These are extensive, and because of the vast possibilities and customization of the software it is not practical for us to list these here.

The next step in the process is the putaway process. This is where the merchandise is physically placed into a storage location where it is kept until it is to be picked or moved to a picking location.

If you have a question that is not answered here, feel free to contact us.

We are also available to consult with your company in logistics areas and have extensive experience in distribution management and problem resolution