Automated Material Receiving - Saving Time and Money at Receiving Docks

Material Receipts - Last Mile Stone

Material receipts are part of the last milestones in the Supply Chain Journey. The material has traveled a long way from say China and it has reached your docks. The truck is waiting outside the gates and the material has to reach the assembly line or shipping line to be consumed at the earliest.

How fast and accurate material is received makes difference in the supply chain efficiency. We have seen cases where the material was air lifted from China to reach US shores in one day and then it reaches the docks the same day. But for the material to reach the assembly line, it takes another 72 hours due to the process constraints like counting, Inspection etc. This is not efficient use of the resources. Every Supply chain manager should consider how the time can be reduced in the receiving process. 

Post Processing Lead Time

Time taken for the material to be available to the final consumption point from the time it reaches the receiving docks is known as Post processing lead time.

I have seen planners including 20 days of post processing lead time anticipating the lengthy and time consuming material receiving process. Automating this material receiving process improves the supply chain efficiency greatly.

Advance Shipment Notification (ASN)

Advance Shipment Notification is the electronic notification sent by Suppliers to Customers informing them what is on their way. ASN typically will have

• Customer Purchase Order Reference Number
• Items Shipped in that shipment
• Quantities
• Carrier tracking number
• Expected Delivery Date

these information are vital for automating the receiving process. With ASN, receiving organization is able to know well in advance even before the truck arrives at their facility. If they notice any discrepancies, they can alert the supplier and ask for corrective action immediately. For example if they are expecting a shipment of 100 numbers of an item and the ASN has only 50 in it, it draws a red flag and corrective actions are to be triggered immediately.

ASN Data and ERP 

Most of the popular ERP Systems like SAP and Oracle are designed to manage ASN data.The ASN data is marked as pre-receipt data so that when the actual material arrives, it can be reconciled and received with few clicks and keystrokes instead of entering each and every line quantities.

ASN data from suppliers can automatically be imported into the ERP system so that it will be ready for the actual receipt. Each ASN from the supplier will have a shipment reference number also known as ASN number. If the data is already electronically loaded into the ERP system, it can be matched by entering the ASN number. 

So the receiving dock need to just enter the Shipment number found in the shipping document and it will pull the complete data of what is contained in the shipment. So the receiver need to just click yes if the quantities matches. This will reduce the time taken to receive the full container load of items in few minutes.

RFID and Automated Receiving

RFID technology is the latest trend in Supply chain management. RFID saves considerable time in handling , tracking and receiving material. RFID label printers like Zebra RFID can print unique tags in a special label paper that contains RFID tags embedded.  Suppliers are asked to use the RFID labels in all the packages. So all the packages both inner and outer will have the RFID tags included. RFID tags can be placed on metal components also. 

The advantage of RFID is that RFID data for all the tags can be collected without even scanning the items. So assuming a truckload of delivery contains 500 boxes each containing about 500 individual items. Physically counting them will take hours and days to complete. With RFID scanners and RFID tags, the entire truck load data can be collected within few seconds. So the full truck load of items can be counted and received within few minutes.

This will be a huge savings in the time taken for material receipts.

Conclusions

Receiving material is the last milestone in supply chain process and this can be a major time consuming event in the entire supply chain process. Automating this process reduces the overall cycle time and improves efficiency. The reduction in receiving time will start from the suppliers. Suppliers are expected to provide advance shipment notification electronically in advance before the shipment arrives at the docks. Using RFID technology reduces the receiving time drastically. Using a automated Receiving portal tool like TPSynergy  improves the overall receiving process.