BUS104
Supply Chain Management
Warehousing Operations
Certification Track
Learning Block 2 – Receiving Goods at the Distribution
Center
James Jennings
Common Learning Block
Description
• In this learning block, we will investigate the activities that take
place in the Receiving Area of DCs by taking an integrated view
toward learning. The integrated view will include discussion of the
processes, equipment, and technology used to speed the flow of
goods through warehouses as they are handled during receiving,
sorting, value-adding services, storage, order selection, and
shipping. It is important for warehouse associates to be familiar with
warehouse activities and related terminology to contribute
effectively as employees and to be able to communicate effectively
with customers and with other team members.
• The receiving function is essential to warehousing operations
because unless product is properly received, it is difficult to handle
all other subsequent functions. The receiving function allows
warehouse operators to receive product against purchase orders
and against ASNs that have been received via EDI. The receiving
process can include goods physically received at the warehouse and
stored or goods directly delivered at customer sites or cross-docked.
The Receiving of Goods
• The objective of the receiving function is to assure that vendors:
• deliver the correct product to DCs in the correct quantities,
• in good condition,
• and on schedule.
• In the receiving area:
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incoming goods are normally checked and unpacked,
and loads are repackaged/organized into a storable format (where required),
entered into inventory,
have markings/labels applied to SKUs,
and are staged for movement to the storage area.
Cross-docking and certain value-added activities could also take place here.
• In many DCs, the receiving area is often the least understood and most
poorly planned part of the facility.
• This poor planning often leads to:
• congestion and chaos, which creates a serious “bottleneck” and adversely affects
the overall efficiency, cost, and performance of the distribution network.
The Receiving of Goods
• Activities Carried Out In Receiving
• Typical activities carried out in the receiving of goods include the
following:
• Scheduling delivery vehicles at the receiving dock and yard control
• Unloading product from the delivery vehicles
• Checking product quality and quantity
• Identifying the product and entering it into inventory
• Ticketing and packaging the product
• Completing JIT and cross-dock activity
• As is the case with all warehouse operations, the receiving
function will vary greatly from industry to industry.
• For example, companies in the chemical and petroleum industry
receive inbound supplies in bulk quantities (e.g., rail tanker cars and
tanker trucks) rather than in boxes flowing over a conveyor on a
receiving dock.
The Receiving of Goods
• Scheduling of the Delivery Vehicle at the Receiving Dock and Yard Control
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Yard control activities include scheduling inbound vehicles for offloading, restraining vehicles,
checking seals, and opening of the truck door, and inspecting the trailer or load condition. Yard
control and scheduling inbound delivery vehicles determines when delivery trucks are due to be
positioned at the DC’s unloading dock. Whenever possible, this dock location minimizes the internal
transportation distance between the dock door and the storage location.
Other yard control activities include the following:
• Using chock behind the trailer driver side rear wheel or other means of vehicle restraint
• Checking the seal and opening the truck door
• Inspecting the trailer or load condition for damage or infestation
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When trucks arrive at the dock, they generally find one of three types of DC dock configurations:
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combined,
scattered,
or separated.
The following sections describe each of these configurations.
In the combination docks arrangement, receiving and shipping activities are performed in one
building area, so fewer dock positions are used.
These activities use the same docks, building area, equipment, and employees and, therefore, lead
to a more productive use of resources.
For best results, this combination concept requires a truck dock schedule in which inbound product
is delivered in the morning and outbound product is loaded in the afternoon. Receiving and shipping
docks are on the same wall, so product tends to flow through the facility in a horseshoe pattern.
The Receiving of Goods
• The disadvantage of using combination docks:
• is that it tends to increase in house transportation and requires exact
scheduling of inbound and outbound trucks,
• and it may also lead to vehicle congestion in the receiving and
shipping areas.
• With this method, it becomes more difficult to compensate for
product delivery problems and business fluctuations.
• In the scattered dock arrangement, incoming goods are delivered to
a number of points on the perimeter close to the point of use.
• This dock arrangement allows the product to flow directly in a
straight line from the delivery dock area to the assigned storage
area.
• Shipping docks are located along the opposite building wall from
receiving, allowing product to flow from storage areas into the
shipping dock area.
• This arrangement is particularly suitable for DCs that operate a
cross-docking operation.
The Receiving of Goods
• Disadvantages of this arrangement include duplication of services
and back-up facilities, requirement of increased labor, need for
increased management control, difficulty in rearranging the layout
during an expansion program, and under-utilization of mechanical
handling equipment (i.e., excessive capital investment).
• In the separated dock arrangement, receiving and shipping docks are
located at opposite ends of the building and utilize separate
equipment, employees, and supervision.
• This concept reduces in-house transportation requirements and
activities. Other advantages include flexibility in scheduling trucks,
increased capacity to handle business fluctuations and problems,
large volume of goods, and inventory with a large product mix. The
disadvantages of separated docks are similar to those discussed for
the scattered dock arrangement..
The Receiving of Goods
• Dock Design Features
• Receiving docks normally have the following features to ensure
effective and efficient handling of arriving goods:
• Seals and shelters to keep the area clean and dry. Seals and shelters
are exterior doorframe and jam features that extend outward from the
building and permit trucks’ rear, sides, and top to fit flush against this
extension and building doorframe and jam. Seals and shelters help to
protect goods from bad weather and help to improve dock security.
• Dock levelers and vehicle restraints safely connect the trailer to the
dock. Dock levelers bridge the gap between the dock edge and
vehicles to allow handling equipment access to the goods within that
vehicle, while also accommodating differences in height between the
dock and the vehicle.
• Good lighting throughout the area for trailers being unloaded
• Adequate maneuvering space to allow easy access to docks and to
manual and automatic handling systems
The Receiving of Goods
• Unload the Product From the Delivery Vehicle
• Unloading is the second of the main receiving activities.
• The unloading activity includes the physical movement of the product
between the delivery vehicle and the receiving and shipping docks.
• Three methods are used to move product:
• manual method,
• mechanized method,
• and automated method.
• For an effective operation and good employee productivity, each
method should be matched with its product, type, volume, and
appropriate equipment for handling material.
• Following are descriptions of the unloading methods.
The Receiving of Goods
• Following are descriptions of the unloading methods.
• Manual Unloading Methods
• The first unloading concept group consists of manual methods. Employees are
required to carry the product, or pull or push a carrier with product, between
delivery vehicles and the dock. These various concepts are applied in any type of
distribution facility that handles single items, carton, or pallet loads.
• Mechanical Unloading Methods
• In these methods, gravity, electricity, and fuel-powered vehicles, or conveying
surfaces, move cartons or unitized product between the warehouse dock and the
delivery truck. These methods may be used in any type of distribution facility.
• Automatic Loading Concepts
• The final concept group for receiving and shipping consists of automatic
unloading and loading methods. Various designs in this group utilize electricpowered conveyor systems, hydraulic platforms, or specially designed trailers to
move product between the dock and the trailer. All these automatic devices
move product between the truck and the dock area with very little labor and are
particularly suited to high volume throughput operations.
The Receiving of Goods
• Following are descriptions of the unloading methods.
• Check Product Quality and Quantity
• The third main receiving activity is to verify that vendors’ product quality and
quantity are correct and match the purchasing documentation ASN. This activity
ensures that product delivered to warehouses is what was ordered, that the
quality is acceptable, and that the quantity is correct.
• Once a shipment has been accepted, the next step of processing freight is
checking in the materials. Receiving checking is carried out by comparing the
receiving companies’ purchase order or ASN to the materials that have been
unloaded onto the receiving dock to ensure the following:
• Quantities received match purchase order or ASN
• Products are identical to purchase order
• Quality is acceptable according to predetermined standards
• Problems and discrepancies are documented and reported to the proper party
responsible.
• Any missing or damaged cartons in transit become the responsibility of the
freight carrier or transport company.
• Vendors and manufacturers would be notified if the order is of poor quality, has
incorrect quantities, or has missing or wrong products.
The Receiving of Goods
• Following are descriptions of the unloading methods.
• Some firms use a form of quality assurance in which they institute a Total
Quality Control program with vendors. This program aims for quality at the
source, or “doing it right the first time” at the vendor’s site. This type of
program reduces or eliminates the need for receiving quality control
practices.
• In cases that the product is incorrect or damaged, it will normally be held
in a separated, clearly demarcated, holding area to await disposition. This
disposition normally takes the form of
• Returning the entire shipment to the vendor
• Inspecting 100% of the incoming products and separating acceptable
quality product from poor quality product. Good quality product is sent to
the storage area, and poor quality product is returned to the vendor.
The Receiving of Goods
• Enter the Product Into Inventory and Product Identification
• The next receiving activity is to update the product inventory files.
Receiving department employees enter the SKU quantities into inventory
and transfer the goods from the receiving department staging area to the
storage staging area.5
• In DCs that use barcode scanners, ASNs, inbound unit load license plates,
or other means of capturing receipt information, employees may have
little interaction with the computer to formalize product entry into
inventory.
• The action may consist of viewing collected information on the screen and
hitting the Enter key to verify it. In DCs that use paper-based transactions
(e.g., receiving documents), employees may need a more extensive key
entry to input product and quantity data.
The Receiving of Goods
• Ticket and Package the Product
• In certain retail DC operations, a sub-activity of product receiving is
the SKU ticketing activity in which a retail price tag is placed onto
each SKU.
• In this activity, the procedure includes a mechanical printer that prints
tickets, which are then glued, clipped to, stitched into, or hooked onto
the SKU.
• In some industries, a repackaging operation may take place prior to
the product being stored.
• The purpose of this activity is to convert the product from a bulk form
(e.g., products tossed into a large bin without individual packaging or
wrapping) to a form that is ready to be placed into storage.
• The activities can involve unit load transformation.
• For example, parcels might be unpacked into individual cartons, pallet loads
containing unstable loads might be stabilized, or it might be necessary to
change the height (quantities per pallet) of a pallet to conform to storage or
building constraints.
The Receiving of Goods
• Value-Added Activities6
• Receiving functions also include activities, such as packing
products, into customer-specific/marked cartons, possibly in
customer-specific quantities. Depending on the type of company,
industry, and the nature of the operation, kitting might also take
place at this stage.
• Kitting is a process in which a group of specific individual items are
packed together—in the container the consumer will handle—to
create one unique item.
The Receiving of Goods
• Value-Added Activities6
• Receiving functions also include activities, such as packing
products, into customer-specific/marked cartons, possibly in
customer-specific quantities. Depending on the type of company,
industry, and the nature of the operation, kitting might also take
place at this stage.
• Kitting is a process in which a group of specific individual items are
packed together—in the container the consumer will handle—to
create one unique item.
• For example, a mail-order company that has fishing flies, reels,
and rods delivers to its DC and packs these products into a
fisherman’s kit for storage and subsequent picking against orders
for these kits. The process of kitting is more fully described in
Learning Block 5.
The Receiving of Goods
• Cross-Dock Activity
• Another major activity that is carried out in the receiving area is
the cross-dock activity.
• This type of operation changes the traditional sequence of activities
and product flow in DCs.
• In cross-docking, the product is received and then distributed to
the customers’ staging shipping area directly, without being
placed into storage (see Appendix B).
• This flow concept reduces the distribution facility number of product
handlings and number of days to flow from vendors to final
customers but emphasizes inbound-outbound dock and sorting
activities.
The Receiving of Goods
• Place Product Into Staging Area
• This activity involves depositing the product that has been unloaded from the incoming
vehicles (e.g., parcel, LTL, truckload, or railcar) into a specific area of the warehouse for pickup
by the putaway team.7
• Goods arrive and are stored in DCs in varying types of storage locations and containers,
depending on the product characteristics and the amount of product to be transported or
stored. These locations and containers have specific industry-related and accepted names,
and specialized pieces of equipment (i.e., material handling equipment) are used to handle
the various types of containers. The following is a list of some names and characteristics of
common storage containers:
• Intermodal containers (shipping containers) are used for the efficient transportation of goods.
Standards specify the volume and dimensions of containers to facilitate efficient handling.
• Pallets are one of the most commonly used means to store and move product in DCs (see
Figure 13). Many specialized devices (i.e., material handling equipment) are used to handle
pallets (e.g., forklift truck, pallet jack, pallet inverter, and unit load). Pallets may be stored in a
number of ways, including single tiers on the floor, stacked on the floor, or stored in pallet
racking.
• Gaylords are large single boxes usually connected or attached to a pallet.
• Cases and cartons are boxes usually containing many items. In DCs, there is generally an
accepted distinction made between cartons and cases, but both are boxes. Cartons are typically
defined as the inner pack, or subset of product, that is pre-packed and ready to sell within cases.
Cases may contain several cartons within it.
• Totes are reusable containers used to hold and transport goods.
The Receiving of Goods
• A Receiving Scenario
• Many companies use ASNs to ensure efficient receiving operations.
• To begin, the ASN for a particular order arrives at the DC before the order
so staging instructions and staffing level plans can be generated before
the goods arrive.
• DC staff are allocated to handle the incoming shipment, and the optimal
routing flow for the incoming goods is determined; if storage is required,
the storage location is designated.
• Computer-generated information will then alert DC personnel about
the quantity of goods that will be arriving,
• whether they are to be cross-docked or stored,
• and if they will require staging at some intermediate area prior to crossdocking or storage.
• The computer also uses information provided by ASNs to schedule and
coordinate the use of receiving docks.
• Before the incoming carrier arrives at the DC, it may receive information
via its on-board computer about which receiving dock to back into.
The Receiving of Goods
• The Computerized Receiving Function
• A worker meets the truck at the receiving dock with an RFT,
which is used to check in the goods received.
• It has a full keyboard, special function keys, a digital read-out, a small
printer, and an attached bar code scanner; it also receives
information from, and sends information to, a central computer,
which is sometimes called a host computer. RFTs can be hand held or
mounted, sometimes on forklifts, and are used to check in the goods
received.
• If there are computer or communications issues, a computerized
warehouse may resort to paper-based tracking of receipts until
the computer is online.
• In fact, many smaller warehouse operations still work on a paperbased system in which warehouse activities are noted on paper
(rather than captured on an RFT) and are manually typed into a
computer by a receiving, shipping, or inventory clerk.
The Receiving of Goods
• RFTs may scan case SCS codes or other identifiers and transmit
the data to the computer system to reconcile received goods with
purchase orders;
• specific products and quantities are identified, and any damage or
suspected damage is recorded.
• Trailers are then unloaded according to RFT instructions.
• RFTs can also generate carrier receipts, and in some companies,
RFTs provide detailed instructions to operators.
• These on-screen instructions specify the sequence of activities
that should take place.
• Shipments are received in various types of containers, but the
shipment container markings of one kind or another are generally
attached to goods that have been unitized.
The Receiving of Goods
• A unitized load is a consolidation of a number of items into one
shipping unit to make handling easier. Loads can be unitized by
banding, binding, or wrapping.
• The shipment container marking may even be attached to a trailer
that has been sealed and secured prior to shipment.
• Goods are commonly unitized on pallets, which are typically wooden
platforms used for stacking and transporting products as a unit load.
• They are commonly four foot squares and constructed to place
forklifts’ forks between the platform levels.
• RFTs can also print license plates, which are used to direct and track
the movement of goods.
• License plates are computer-generated and are used to direct and
track the movement of packaged goods through DCs.
• Information required for license plates is sent to the RFT, which prints
a bar code label (i.e., license plate). This label is attached to the
goods in the receiving area. .
The Receiving of Goods
• Key Metrics Used in Receiving
• Receiving activity is essential to warehousing operations. Unless
product is properly received, it will be difficult to handle all other
subsequent functions. The receiving function allows warehouse
operators to receive product against a purchase order and against an
ASN that has been received via EDI. The receiving process could
include goods received at the warehouse and stored, delivered at
customer sites, or cross-docked.
• The relevant key performance indicators (KPIs) for receiving function
should include the following:
1. Cost: Cost of receiving per receiving line
2. Productivity: Volume received per man hour measured in terms of
pallets, cases, etc.
3. Utilization: Receiving dock door utilization percentage
4. Quality: Accurate receipts percentage
5. Cycle Time: Time taken to process a receipt