Importance of Quality Material Receiving Process in Your Warehouse

Updated: Feb 10

Article by Don Lee and Shanta Sloan

Two people in hardhats standing next to 5 stacked boxes and 2 shipping containers

Receiving is likely one of the lowest ranking positions in your warehouse organization. However, the fact of the matter is it's likely one of the most valuable. A good Warehouse Receiver should be able to inspect deliveries with great attention to detail, and be in good physical condition to lift and move heavy items. They should also be able to ensure efficient receiving processes and promptly resolve any problems or discrepancies.

Why is it important to have quality materials receiving processes and people in your warehouse?

The receiver begins by unloading a truck or accepting a delivery, signing for it and preparing for the receiving process. At this point, the receiver will only be counting boxes or pallets and comparing to the Bill of Lading (BOL). This is just the first step in receiving and releases the truck driver to leave for their next delivery. Performing this step in a timely fashion helps keep the delivery drivers operating efficiently, and is helpful in accurate transportation company and supplier delivery metrics.

The materials received are then counted and verified against the packing slip. This step directly affects inventory and cost of goods sold. An accurate count will produce an accurate on hand value and an accurate unit cost of the materials before they ever go into production or are used in a project. Comparing it against the packing slip ensures that we do indeed have what the supplier says they sent in the quantities described.

Once we know that we have the accurate item, at least according to the packing slip, the next step is to compare what was received to the purchase order (PO), in order to verify that what we have received is in fact what the customer wants. The receiver will verify against the purchase order for the correct size, the correct material and the correct type or style of the item as well as any other unique qualities required by the PO. The receiver will also inspect each individual item for any flaws or damage. This may seem like a simple and an insignificant step, but, if not done correctly, it could bring the entire project or operation to a halt. This could result in having a whole crew of people unable to start the work leading to a great expense due to unproductive labor cost and the cost of rush deliveries. There is also a potential for penalties for late delivery of the project depending on your contract. Inefficient receiving processes can cause companies a lot of money!

The next step is to actually receive the items in the system, MS Excel, ERP, or any other digital program. Depending on the task, this might move materials into inventory or it might directly charge the materials to a project. This is referred to as the financial receipt as it tells accounting that the invoice can now be paid. This step is also part of the “three-way match” process that many companies use to avoid invoice issues as well as project delays.

Putting materials away is the final step in warehouse receiving. This may involve placing materials on the correct shelf or staging the materials for use in an upcoming project. Either way, performing this step accurately is extremely important because not knowing where the material is located is pretty much the same thing as not having it. This might result in lost time looking for the material or possibly even reordering material because it cannot be located. Inventory discrepancies is also often the end result inefficient warehouse put-away processes and procedures. Accurate put-away is a simple but a very important task for warehouse management.

If any discrepancies are identified during the receiving process, the receiver will contact the vendor to notify them of the problem. They will also collaborate with management to make them aware of the issue. This will likely be accomplished by using some sort of Over, Short or Damaged (OSD) process. Efficient OSD process is very important for controlling your company’s material write-off, which are considered a loss on the financial statements. It is also helpful with managing suppliers, especially who have a high rate of order accuracy errors. Packaging the materials for return to the supplier and maintaining records of these outgoing shipments is often one of the responsibilities of the receiver. This is where attention to detail comes in handy.

When we talk about running an efficient warehouse operation, the receiving process is imperative. The actual receiving process is a very crucial process in warehouse operations. It serves as a critical first step when materials are ordered for the client. The proper receiving of goods will have a direct impact on all subsequent warehouse processes, as well as accounting and project or inventory issuance activities. It is important to keep in mind that the purpose is to receive the right product, in the right quantities, in the right condition, weight, and dimensions all at the right time.

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