Every fulfillment business, regardless of size, faces the same daily pressure to meet service levels making ‘Dock to Stock’ the battle cry of every receiving department. Dock to Stock involves efficient internal processes as well as setting vendor compliance policies between a vendor and the merchant operation. These combined practices allow warehouse receiving to move incoming receipts and new product into inventory quickly.
The most important element of Dock to Stock is validation that the vendor has shipped the correct items and the correct quantities from the purchase order. If the vendor’s shipment deviates from the purchase order, inventory counts can be inaccurate and customer service could get delayed. If you can avoid those costly issues, Dock to Stock can help streamline receiving and get items where they need to be faster.
For best of class companies, the Dock to Stock turnaround time to receive, check in and put away stock is two hours. Most e-commerce merchants should set a goal to clear the dock and staging areas in the same shift. This assumes limited quality assurance (QA) tasks which may require fabric inspection and measurements. However, if QA is needed, the dock and staging areas should be cleared within 24 hours.
Are you meeting Dock to Stock best of class turnaround times? If not, here are 11 ways to improve Dock to Stock processes:
1. Set Vendor Compliance Policies (VCP)
These policies will help speed up processing of inbound receipts. A VCP typically includes several criteria:
- Agreed to technology formats: Have vendors commit to a standard set of technology including Advanced Shipping Notifications, Barcodes and Electronic Data Interchange.
- Designated freight carriers: Do not leave carrier selection up to the vendor. Vendors typically have little concern about cost or service and might be making a profit on shipping.
- Packaging specifications: Be sure to include outer box specifications that protect from damage or act as a ship alone container.
- External carton labeling: Require purchase order number, SKU number, description, your company information (name and address), number of cartons (identified as 1 of X, 2 of X, etc.).
- Product specification sheet: Streamline quality assurance by requiring product specifications in a standard format.
- Procedures and practices: Set standard practices in order to quickly address quantity variances, damages and any other specifications when not met. These may include chargeback policies as well.
- Return to vendor procedures: Hold merchandise for buyer and vendor approval and process vendor credit and inventory transactions.
2. Adopt Advanced Shipping Notifications (ASN)
ASNs are used to notify a retailer of incoming shipment of product to their facility. They can be paper or electronic notifications and typically include PO numbers, item numbers, quantity, etc. This is one of the most beneficial process changes you can make.
3. Schedule Trucking Appointments
Every fulfillment center needs to know the scheduled arrival dates for inbound freight so they can plan labor and material handling equipment (MHE) resources. If you don’t have sophisticated planning and scheduling systems, use the open purchase order file printed in due date sequence. Larger facilities require carriers to either call for an appointment or have regularly scheduled daily deliveries such as small parcel carriers.
4. Identify Returns From Other Receipts
Use barcodes or pre-print “return” on return labels to quickly sort packages that should be sent to returns processing. This helps clear the receiving area and inbound process.
5. Expand Receiving System Data
The receiving process either uses a receiving document or an online display of critical information, such as SKU number, item, description, quantity ordered, quantity received and product/vendor comments. Consider expanding your receiving data to include primary pick location, quantity in primary, reserve locations and backorder quantity. This facilitates direct put away from the dock to the pick slot and the consolidation of product in storage locations.
6. Improve Quality Assurance (QA) and Inspection
QA processes vary widely between retailers from proprietary or exclusive product and case received products with little inspection. For exclusive and proprietary product, specification sheets should be attached to the purchase order and used by QA to inspect incoming products.
7. Cut Inspection Time
Consider varying your inspection process based on each vendor’s quality and accuracy history. Vendors that are consistently reliable would have less product inspected which w reduce your effort and time.
8. Set Up Cross Docking
For backordered product, cross docking eliminates product handling labor by moving checked in product directly to pack stations. This system bypasses the put away and replenishment steps, speeding up customer service. In order for this to be successful, the receiving system must prompt the receiving staff of backordered items.
9. Implement Barcode Receiving
A barcode based receiving process can be much faster and accurate. It also allows you to gain total inventory control with real time product tracking, to reduce lost inventory and to reduce warehouse costs.
10. Utilize Product Dimensioning
Product Dimensioning is the process of calculating weights and cubic dimensions for each SKU in your warehouse. Rather than manual measurements, or estimates, we recommend utilizing cubing or weighing systems. There are many benefits to implementing this process, including better managed warehouse inventories and slotting.
11. Develop A Vendor Scorecard
A vendor scorecard is a great way to get a holistic view of vendor performance. Your scorecard should be updated through a periodic formal evaluation and assessment of the financial and service impacts vendors have on your business. A great time to review performance is alongside an order placement. Leverage the purchase order to gain new commitments from a vendor.
Inventory accuracy starts with efficient and accurate receiving. Because the number of receiving docks are often undersized, efficient Dock to Stock receiving procedures are critical in reducing bottlenecks.