WHY THE RECEPTION PROCESS IS IMPORTANT
In our efforts to increase customer service, the reception process is not always the first priority. Logically, because our customers have ordered and we want to deliver. Therefore, we need to pick and ship! The fact that probably less than 10% of the cost is involved in this part of the operation, also doesn’t help. It’s understandable, but.. smooth reception will support a successful operation and will become more and more critical when the site comes under pressure.
In this blog we deep-dive into the reception process. Learn more about our view on Lean Warehousing and Waste Reduction in general in one of our previous blogs on Lean Warehousing.
We see several reasons why it is so important:
- Your suppliers come at the door, and if not helped (unloaded) directly, they might start to complain to you and to others
- If not planned properly, the reception process might take too much resources at peak moments, claiming too much capacity from the other processes
- If the reception area becomes too full, they take away capacity for outbound which might even negatively impact both inbound and outbound flexibility
- The amount of goods that are received, determines the saturation level of the site. If the maximum capacity of the site is exceeded, all processes will suffer
1) Your suppliers at the door
Imagine that warehouse that has shipped a more than average amount of goods during a certain period. The re-ordering department places a massive amount of orders to replenish the stock. At a given day, much more shipments and goods come to the site, than it can possibly handle. The first time that you do this, it will probably ok. After a while, suppliers start to complain and charge “waiting hours”. A source of non-added-value discussions. We are all better off with a well-managed, smooth process, etc. Where the entire warehouse operation is aimed at servicing the customers, the reception process must deal with suppliers. These are important stakeholders as well and their interest should be taken care off. Otherwise, it will lead to additional (hidden) cost. “Keep them waiting”, will cost you one way or the other
2) Lack of planning takes resources away
An unfavorable planning of the inbound volumes and peaks will lead to an additional resource requirement. It will mean that additional administrative and reach-truck capacity needs to be allocated to the reception, which can subsequently not do the “regular” or planned tasks. On the other hand, also the inbound goods cannot be kept waiting on the inbound docks. The operations manager has to choose between bottlenecks, which will inevitably lead to issues somewhere.
3) Reception area too full: loss of flexibility
If the inbound volume is extremely high suddenly, and it is not put-away in storage quickly (because the operators cannot keep-up), the goods will stay longer at the inbound docks (waiting goods, lower dock rotation). This means that these docks cannot be used for outbound shipments and the area will get congested. Consequently, picked goods need to be positioned at sub-optimal docks or elsewhere in the warehouse. The result is that the order-pickers need to travel a longer distance and an additional movement is necessary before the loading can take place.
4) Warehouse full: loss of productivity everywhere
We all know that warehouses should be filled up-to 85% maximum (or was it 90%?). The remaining space is used for daily fluctuation, phase-in – phase-out of assortments, to move goods around, drop-off goods for a moment, etc. If the warehouse becomes too full, goods will be stored in sub optimal and/ or inappropriate locations, operators are blocked or need to move around the goods. and all of this means we are wasting time. Being very strict on reception can avoid this. Each warehouse has a maximum capacity on storage, daily in- and outbound, etc. etc.
How to make it into a success? Take the following 4 measures:
- Strict on total volumes and spreading them out
- Strict process
- Digital tools
- Use a dock-planning-tool
1) Being strict on volumes and spreading them out
Allowing more inbound bookings and/ or goods that can be handled in the site is a risk. Once the warehouse is full, overview will be lost, and productivity will be destroyed. Even customers will not be happy, because service will suffer sooner or later. Making a careful calculation on the warehouse capacity (inbound per hour/ per day, storage, outbound, etc.) and being transparent to customers is very important. Sticking to that maximum even more so.
Peaks is reception are not easy to handle and will lead to stress (as in any process). Drivers are shouting, the parking lot is full, and the operators are under pressure. But even if the pressure is not so high, spreading the volumes has a lot of benefits and it will increase the capacity. We see a lot of operations that tend to receive the majority of their goods during only a part of their operational hours (e.g. in the morning, or late afternoon). Spreading the volumes makes the work easier and increases the capacity.
2) Strict process
Each reception should follow a strict process that is optimized after several rounds of analysis. Where does the driver enter the facility, where does he park, report, etc. all the way to the end of the process. Once shipments are assigned to a dock, resources should be ready to unload, check and register the goods and put them into storage. Once the administrative part is done, goods should be put away in storage immediately. This total turn-around time, or dock rotation should be constantly measured and monitored. If there are no resources available to cover a certain step in the process, consider not even to start it.
3) Digital tools
The reception process can benefit enormous from various digital tools. The dock-planning-tool (next item) is one of them. Besides that, you can think about:
- Electronic Data Exchange (EDI), which can deliver the DESADV (no longer typing in the shipment document), but also master data of the products that are coming in
- The Serial Shipping Container Code (SSCC) barcode on the pallet, allowing you to scan it
- Optical Character Recognition (OCR) technology, allowing you to scan shipment document, translate them into data and put into your WMS (with RPA, next item)
- Robotics Process Automation (RPA) allowing you to automate standard repetitive system processes, increasing speed and accuracy and reducing cost
Dock-planning-tools are digital tools as well, but so important that we address these specifically. They are mostly online platforms (SaaS), easy to implement, and a big help to your process. Each supplier should record an (inbound) shipment in the available schedule. In the schedule, the maximum amount of shipments per day and the spread across the day are predefined. If you stick to the schedule, and do not receive non-booked loads, staying below the maximum is safeguarded. The platform allows you to have data available upfront (content of the load, documents, etc.). Examples of vendors that offer interesting tools are Transwide (www.transwide.com), Incore (incore.nl) and Transporeon (www.transporeon.com), but there are more of course.
An additional benefit of these tools is the possibility to register timestamps of each reception. Truck arrival, starting the unloading, finishing the unloading and truck departure are possible event to mark in the system. This allows you to measure all sorts of performance indicators of the site such as on-time unloading and on-time arrival. Any type of discussion around the topic can be supported by facts. Should your warehouse be negatively approached and does anyone say that unloading “always takes too long”, you have facts to counter this (assuming these facts will indeed support that). Secondly, poor performing suppliers with a high percentage of late arrival, can be provided fact-based feedback. It is always better to do this with the last 3-6 months’ data at hand, than an emotional comment that “they are always late”.
The reception process might not be your priority during a supply crisis, but it should not be underestimated either in any warehouse operations. It can endanger productivity across the warehouse and therefore it will hurt the service level eventually. When it runs according to plan, usually you won’t hear anyone about it. The challenge to the manager responsible for this part of the operation is not to be the master in solving the crisis, but rather being able to prevent them.
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