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Warehouse Management

Warehouse Receiving: Process, How To Optimize & Best Practices

A guide outlining the warehouse receiving process, highlighting flaws and mistakes within the process, and proposing ways to improve the receiving process for warehouses, ensuring seamless e-commerce fulfillment.

Team Hopstack
September 19, 2023

In this blog

In an e-commerce fulfillment process, warehouse receiving is the first step, which is why it needs to be seamless and accurate. It includes delivering, unloading, and storing inventory in the warehouse or fulfillment center. Being central to the retail supply chain, the receiving process needs to be as efficient and cost-effective as possible. 

Identifying errors and discrepancies early in the process helps prevent more significant problems during picking, packing, or shipping inventory. Hence, businesses need to realize the impact of a well-established receiving process on the entire fulfillment cycle.

Typical Warehouse Receiving Process Flow

Typical Warehouse Receiving Process Flow

1. Pre-Receiving

Before receiving a shipment, business owners must complete pre-receiving tasks to ensure smooth movement and timely delivery of stocks to the warehouse. In most cases, a Warehouse Receiving Order (WRO) label is created containing essential package details. 

These details are encoded in barcodes attached to every shipment, making it easier to scan and verify the received products through the receiving module of the Warehouse software. 

2. Receiving and Unloading Stocks

Once the inbound shipment reaches the warehouse, the receiving staff unloads the cargo. Having full details of the inventory beforehand helps optimize the warehouse receiving process. Depending on the size and volume of the incoming consignment, warehouse operators can allocate employees and heavy machinery like pallet jacks and forklifts efficiently.

Digital Warehouse software leverages data and advanced analytics to recommend the optimal allocation of workers and equipment needed for shortening the dock-to-stock cycle.

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3. Inspection of received inventory

Damaged products, broken seals, lost items, a mismatch in product SKU, or other details are verified at the time of unloading. The products received should match the contents listed on the WRO, and any discrepancy or damaged product should be kept aside to be discussed with the manufacturer. 

This is essential for preventing any faulty item from reaching the customer. It is also important to capture the details during the inspection process in the QA module of the warehouse software to identify patterns and prevent and minimize future errors. 

Read Also: Digital Transformation of the Warehouse

4. Putaway

Once all the cargo is inspected and unloaded, the person in charge of receiving acknowledges the same. Inventory numbers are assigned to the products, after which they are segregated per size, category, expiry date, and other parameters.

They are then sent for storage in the warehouse. Details of the inventory received, damaged products, and where it is stored are updated in the system.

In warehouses that still need to be digitized, the putaway warehouse process tends to be inefficient since the warehouse associates spend time locating the storage shelves through a suboptimal path. 

Such inefficiencies can be addressed through putaway optimization algorithms inbuilt into warehouse operating software. These algorithms can optimize the putaway route, sequence and handle FEFO compliance.

Warehouse Receiving Process

Image Source: Unsplash

Common Flaws & Mistakes in Warehouse Receiving Process

A typical warehouse deals with several problems daily. Some of these include:

- Long waiting times for the inbound trucks to unload as docks are backed up.

- Forklift operators loading pallets prematurely, creating gaps in the inventory.

- Disorganized storage leading to suboptimal space utilization.

- Inefficient staffing of associates due to lack of system-driven work.

- Lack of awareness of the work processes amongst the workforce.

- Inaccurate inventory tracking, resulting in misplaced and lost inventory.

These issues cause the warehouse to spend more time and resources and slow the order fulfillment cycle, leading to decreased customer satisfaction.

Enforcing changes in the warehouse receiving process to make it streamlined and efficient can resolve most of these issues. Let us see how the receiving processes can be further improved using smart warehouse systems.

How can the warehouse receiving process be improved?

How can the warehouse receiving process be improved

Improving the efficiency of the receiving warehouse process in a warehouse reduces the raw material to finished goods conversion cycles for manufacturing businesses. It can enhance the order lead times for retail and e-commerce businesses. 

Here are some of the ways in which the goods-receiving processes can be improved and made error-free:

1. Implement a modern warehouse system

Many warehouse processes are involved in the goods receipt process that can be time-consuming and tedious to perform. Manually tracking and documenting tasks such as inventory movement, labor & equipment availability, and product details make them error-prone.

Modern warehouse software solutions can help businesses automate and optimize these mundane tasks and reduce unnecessary errors. Implementing a robust warehouse system can help plan the inbound inventory movement more efficiently to avoid overflow and excess inventory. On the other hand, it can also predict potential stockout situations and trigger replenishment orders.

2. Tracking the right metrics

Gathering data at every step of the receiving warehouse process is not good enough. The data should be analyzed to identify trends and patterns for the root causes.

Warehouse systems with inbuilt analytics and reporting capability can help in tracking metrics such as:

- Dock to stock cycle time

- Inventory stored at every location

- Putaway items per hour

- Average storage cost per unit

- Truck turnaround times at the dock

The metrics are critical for designing and implementing effective systems that reduce cycle time and errors. 

3. Use a well-defined labeling structure.

A well-defined labeling structure incorporating modern technologies like barcoding, RFID tags, and automated pallet management systems makes it easier for warehouse operators to instantly update stock information in the system as soon as they unload.

Having detailed information about your inventory gives you more control and insights into the supplier's performance regarding lead times, reliability, and quality.

4. Manage labor & booking efficiently

Labor expenses amount to 50 to 70 percent of the warehousing operating budget, making it the most significant cost line item.

Efficient system-driven workforce management prevents under or over-allocation of resources and helps balance workload.

Warehouse software can automate effective workforce management, thereby keeping up warehouse productivity levels and avoiding injuries and safety incidents. 

5. Conduct Inspection

Regular inventory audits, including physical counts and cutoff analyses, can assist in spotting inventory imbalances before they become a problem. It will help to plan the future warehouse receiving.

Hopstack's integrated inventory management solution assists with inventory audits and provides real-time updates on stock levels, damaged goods, and specific SKUs that simplify tracking inventory more effectively.

6. Double Check Documents

Double-checking the inventory received and the document for purchasing orders will help to receive the correct products. It is also simpler for staff to thoroughly review paperwork and spot missing stock by implementing a system for all receiving and shipping documents that assign numbers to each document type and labels various forms in a sequential sequence.

Benefits of an Effective Warehouse Receiving Process

Benefits of an Effective Warehouse Receiving Process

An optimized receiving warehouse process aims to guarantee that the suppliers deliver the specified goods in the appropriate quantities, in good condition, and on time.

The inconsistency of the inventory data caused by inaccurate receiving processes makes it challenging to fulfill customer orders. Effective optimization of the warehouse receiving warehouse process provides businesses with multiple benefits discussed below.

1. Accurate Stock counts

Having accurate stock counts help in preventing issues like inventory stockouts and shrinkages. Inaccurate stock counts lead to customer disappointment as they cannot buy their preferred products. Hence, brands can provide superior customer experience by ensuring accurate stock counts as a byproduct of an effective receiving process.

It also helps companies to manage sales forecasts. For instance, a comprehensive receiving process allows companies to check whether they have received the items in the correct order and inventory level. Additionally, the brand can replenish an item on demand or notify the customers regarding product availability when it is out of stock.

2. Fewer Overstocking and Understocking Items

A brand experiences stockout when there is insufficient inventory to fulfill customer demand. On the other hand, the company sometimes needs a more accurate inventory count to stock products.

Sometimes retailers need the idea of the dead stock items that eat up the warehouse space. An effective warehouse receiving process helps brands determine which items to order more and ways to remove the dead stocks.

3. Efficient Inventory Storage System

An efficient receiving process can also affect managing and tracking inventory. It will help lower inventory management costs by reducing shipment costs and improving transit times.

Brands using a WMS can track their warehouse operations and inventory efficiently. WMS is used for scanning the list when received. It also marks and records the areas where the products are stored. WMS also provides warehouse order picking, packing, and shipping instructions to associates that induce error-free fulfillment.

To conclude

Receiving is one of the most critical processes in the warehouse goods movement process. Hence, efficient and error-free receiving is essential for smoothly functioning of an otherwise complicated order fulfillment process.

It is more critical than ever to automate and digitize the receiving process to sync with the changing business dynamics. This will translate into faster business growth and more revenue.

Interested in learning more about how to automate and digitize the receiving process?

Explore Hopstack's Digital Warehouse Software that leverages advanced machine learning algorithms to optimize the goods-receiving process.

Automation and Optimization in Warehousing Operations

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Automation and Optimization in Warehousing Operations

Schedule Demo Now
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