Shop Improvement Series: Receiving Department

When was the last time you overhauled your Receiving Department processes? I ask this to shop owners from time to time, and the answer is usually the same.

Never.

Most everyone is always focused on two things, the sales end of the stick, and production. Very little effort is put into the process of “how” purchased items are brought into your company and received into your system.

Why is this important you may ask? Because those aren’t boxes of shirts or buckets of ink that your Receiving team is checking in. They are boxes or buckets of money. Cash. Dinero. Moolah. Benjamins.

This article is written to give you a working guideline on how to make this a better process and improve the efficiency of this department.

Receiving Department Rules

If you want to run a tight ship and have excellent processes, the following rules need to be written in stone and are non-negotiable. If you don’t have these now, roll up your sleeves and start making these a reality. Today.

We will get into some of these later in the article.

Shop Mandatory Receiving Department Rules

1. Items received must be checked-in the day they arrive. There is no waiting. You can not do it tomorrow.
2. The area must be kept clean, clutter-free, and ready to receive or process items. Mise en place is the daily standard.
3. There should be adequate space reserved for organizing and processing items in the Receiving department. Anything not in use should be removed.
4. Items received will be checked in via the packing slip that accompanies the shipment. Check against this first, then process against the information in your system.
5. Recognize that the priority is to ascertain that the inbound items should match what was expected or ordered.
6. Staff must be able to accurately count and process incoming items according to established shop standards.
7. When in doubt, recount.
8. Damaged items or packages need to be documented immediately and acted upon. This needs to be communicated to purchasing or customer service quickly for instructions on what to do.
9. There are five statuses, “Not Received”, “Partially Received”, “Fully Received”, “Wrong Item”, or “Damaged.” Make sure your system allows these to be processed and updated accordingly. If you are doing this right, it is basically a real-time status update.
10. Create shop processes for your Receiving Department. Document and train staff members to follow these.

Why Today and Not Tomorrow?

The first rule of your Receiving Department needs to be that everything that comes in is checked, counted and verified today. This is non-negotiable, and regardless of the number of incoming packages to check-in, has to be strictly followed.

Why?

It’s simple, for two reasons. First, tomorrow there is going to be another influx of packages. The best way to get behind in anything is to put things off.

Secondly, your team needs to go through everything that has arrived today to verify what came in. This is not just on apparel inventory that will be produced, but on consumables or other items needed to run your shop.

If something is wrong, your purchasing team or customer service crew needs to be notified immediately so they can act upon the new information and get the solution to the problem on the way now.

This is a deadline-driven industry. Your Receiving Department has to act with immediate urgency to process everything on the loading dock as quickly and as accurately as possible.

Your crew needs to act urgently, but with care and quality.

Start Times May Need To Be Adjusted

One of the most common problems I encounter with advising shops on how to make their Receiving Department better is that the staff comes in at the start of the production shift with everyone else. Let’s say for discussion’s sake, that is 7:00 am. The first shipment from UPS, FedEx, or an LTL delivery might not be until 11:00 am or later.

Frequently, this puts the Receiving Department staff in an overtime situation if they have to process many packages during the day as they would have to stay later than everyone else to get it handled on the same day.

This means that there is a good chunk of the work that is put off until tomorrow morning, rather than stay later to finish on the same day.

Sound familiar?

Instead, adjust their start time until later in the day. Usually, about thirty minutes to an hour before the first delivery usually arrives will work.

This means for that example shop, the Receiving team won’t clock in until 10:30 am. By starting later, they can finish later with regular hours.

Adjust to solve the problem.

Organization

To run an effective Receiving Department the area needs to be kept clean, organized, and ready to work.

Receiving is not a place to store office junk. Old inventory not in use. “We don’t know where to put these” items. Or frankly, the shop owners boat or other weird things.

You need space to work. Efficiency in counting and checking things in starts with some elbow room. There are many types of configurations for shop space. Some have more square footage and amenities such as a loading dock. Other shops might just have a roll-up garage door or a drop off point in the front office.

Depending on your work-load size, you want to create seven distinct areas for Receiving that can house the inventory coming in so it can be processed.

Seven Areas for Receiving

1. Incoming area to be processed. This is just off the truck. You will be segregating the packages here for processing.
2. Counting area. Tables are set up. Supplies furnished. Here’s where you process each package.
3. Receiving Workstations. Your computers, printers, filing storage, etc.
4. Partially Received Area. This is the space where you keep the inventory while you are waiting for the rest of it to be delivered.
5. Fully Received & Staged for Production Area. This stuff is ready to be decorated by your production team.
6. Damaged or Error Area. This is your purgatory area while you process the return. Sometimes this can in the Shipping area so they can have faster access.
7. Problem Area. This area is where you stage items that are challenges that need a resolution, such as when a box shows up that doesn’t match anything in your system.

Team Members

If you are looking to staff up a Receiving Department with the best crew for the task, I would look for these traits:

• Can count accurately. You would be surprised at the number of people that work in this industry that can’t count to twelve, or know how many dozens of shirts should be in a case. Yes, Virginia, the Receiving team has to do the math.
• Works with focus. The shop is a noisy and bustling place. Can the person keep to their work and not get distracted or lose count amid the chaos of shop life?
• Likes a good “Where’s Waldo?” game. Often, part of a great Receiving crew is the ability to find the problem. It’s not just what’s right with the order, but what is wrong, that matters more. Can they find the problem?
• Has great communication skills. The Receiving Department has to be able to communicate effectively with multiple departments in your company and sometimes under highly stressful situations. Jerks need not apply.
• Enjoys completing tasks. Receiving has to work until the job is finished. Tomorrow there will be another wave of work coming in.
• Is a team player. For the obvious reasons.

Processes

Below are the basic processes and how you should organize them. These are general ideas, and your shop may have different needs or specific things that would work better for your circumstances.

That being said, I would start outlining your Receiving Department Processes based on these ideas.

Beginning of the Day – Ready to Work

Each work day begins with the Receiving Department completely ready for the daily intake of new items to process.

The area is clean, neat, and orderly. Mise en Place is a French term that is primarily associated with commercial restaurant kitchens. It means that you have everything ready to go, prepared, and at an easy to reach station.

If you are able, a list of what is to arrive today is processed and printed.

• How many packages should be arriving?
• Are there rush order items or critical packages that are coming in and need to be immediately rushed to someone or a department?
• Any shipments coming in LTL?
• Are customers dropping off items?
• Any scheduled shipments arriving?

Ideally, your Receiving team is in steady communication with your other departments. You want to prepare for tomorrow’s work sometime today if you can.

The best time to prepare for today’s work is before you leave yesterday. This is a good habit to have and should be encouraged.

Receiving Department Freight Delivery Process

UPS, FedEx, USPS, or even an LTL truck backs up and has some packages for you. Great! You should be ready to receive anything they have.

Here are some simple process steps for you to use to start building your own:

1. Ask the freight carrier driver how many packages they are dropping off. Do not let them leave or sign anything until you have verified that you have the same number in the building.
2. As the items are being unloaded, start segregating them by individual orders. On the shipping label, it will say 1 of 1, or 2 of 5, etc. Have a skid, table, or area where you are grouping these types of orders. One skid or area will have all of the boxes that are just single box orders. Another skid or area will have orders that have two boxes. And another skid or area will be for orders that have three boxes. Keep adding areas for the number of boxes in the order, so you can group them. You might also want to use a rolling bin or box for the small orders that come in Tyvek bags to keep them together.
3. As the packages are coming in, check each for any damage. This can be handled quickly with a visual inspection. Have a process in place for what to do if you discover a damaged carton and what is inside is affected.
4. Count each package, box, bag, or carton. Does your total match what the freight carrier said was to be delivered? If so, sign for the delivery. However, if the number is off make sure the driver finds what is missing before zooming off. They can be impatient, so this is up to you to enforce and stand firm.

Receiving Department Package Verification Process – Step 1

Now that you have signed for the goods, it is time to find out what is now in the building.

Here is a step by step method that can give you an efficient edge on this work:

1. Start with any Rush or critical items. Those have to be processed first, and your Receiving team should have been notified about those earlier. The scavenger hunt begins with these.
2. Work the smallest quantity to the largest quantity. As usually a single or small quantity of garments in a Tyvek bag is the remainder for an order that is partially received, start with those. Then do the single boxes. Then orders with two boxes. Followed by orders with three boxes, and so forth.
3. Your team member should use the packing slip that accompanies each package and compare what is on the slip to what is inside. Everything should match exactly.
4. Use the packing slip as the guide only at this point. Confirm that what is on the packing slip is actually the items before you.
5. If everything is correct, the person verifying the content should initial the packing slip and date it.
6. But if there is a problem, discrepancy, or question, flag it with a post-it-note on the packing slip, place the item(s) back in the package and move it out of the way for follow up later in the day’s process. Don’t try to solve it right then. Go onto the next package to check-in.
7. When everything is processed, go back and follow up on the problem items and work through toward resolution.

Receiving Department Package Verification Process – Step 2

By now, everything that has been delivered should have been checked-in by a Receiving team member and the items verified to the packing slip. If not, go back and finish.

The next step involves verifying the checked-in items on the packing slip to what is in your system on what should be needed for the order.

1. Again, start with the smallest quantity and work up to the largest. Those packages with one or two items are usually the partials that can make up the final pieces for an order. Get them received first.
2. On the packing slip should be the PO#, name of the client, or another way to look up the order in your system. Pull it up, and verify what is on the packing slip is what is needed for the order.
3. You are matching for SKU, color, quantity, size, and any other bit of information.
4. If everything matches, the order should be marked “Received Complete.”
5. But, if something is missing then the order should be marked “Received Partial”.
6. Either way, print a box label that has the order number, name of the job, customer name, and quantity information. Place this on the upper left-hand corner of the short side of the box.
7. If the order is completely received and ready for production bring this to the Production Staging area. Segregate by the last digit of the Work Order number.
8. If the order is partially received, write a large “P” on that box label so everyone knows that the order is not fully received. While you are waiting for the remaining items, the box is staged in the Partially Received area, and segregated by the last digit of the Work Order number.
9. When the missing goods arrive for a partially received order, check them in and then add them to the previously checked in inventory. Print out a new box label and cover up the one with the large “P” on it. Move the inventory from your partial area to production staging.

Receiving Department Inventory Staging Process

The next step in the Receiving Department process is all about how you organize your fully or partially received boxes.

The idea is to have anyone in the building be able to quickly locate the inventory for an order. Whether fully or partially received, it should be easy and simple to find.

To do this, organize by these simple rules:

1. All boxes have to have an identifying box label.
2. Every box label is positioned in the upper left-hand side of the short side of the box neatly.
3. This allows you to stack multiple boxes and you can visually scan them quickly.
4. Organize by the last digit of the Work Order number on the sticker. Work order number 123456 would be segregated into the “6” row.
5. The area can be in rows on the floor, shelves on the wall, or other ways to organize the inventory.
6. You will need to create space for your daily amount. On some occasions, you may have an empty space on one number or a large pile in another. It’s ok. In a short amount of time that will resolve itself, believe me.
7. Stack up to four boxes high for the same order. Four boxes can be moved by one person with a hand-cart or dolly.
8. Five boxes or more go on a skid. At five boxes, this can be moved with one person with a pallet jack.

Receiving Department Large Order Processing

Some shops are blessed with handling large orders. While smaller orders can be counted in per piece, what happens when you have a significant amount of shirts to run in production? Here are some rules of the road to help:

1. Determine your threshold for counting-in every piece for an order. This means an actual count per shirt.
2. I would suggest having your threshold start at 144. This means that for orders under 144 pieces you would count every shirt to verify that the quantities match for the order.
3. When the order is over the quantity threshold that you set, you verify the quantity based on the case quantity plus the miscellaneous piece box count.
4. For example, for an order that is 758 pieces, the inventory would come in as ten boxes of seventy-two pieces, plus one box of thirty-eight shirts. Each box would be opened and verified for size and color, but only the box with the thirty-eight pieces would be counted individually.
5. Checking in this order would follow the same order processing procedure as outlined above. An order this size would be on a skid. Stage accordingly.

Receiving Department Packing Slips

As you process the work, you need to have a way to keep control of the packing slips for the inventory as shipments arrive.

Here’s a method that works:

1. As you process the items in Receiving, each packing slip is reviewed with the information on it and compared to the information in your system.
2. Use a simple bin on the desk to collect them for the day. These will stack up. Keep them as neat as you can.
3. At the end of the day, collect them and place them in a normal manilla folder with the day’s date listed on the top tab.
4. Each day of the month is then placed in either an accordion file or banker’s box for the month, in daily order.
5. Keep these handy for a few weeks as production is working jobs.
6. After two months, file these for easy retrieval in a safe location.
7. If you need to review a packing slip, now you can access it easily by going to the accordion file or banker’s box for the month, scrolling through to the day, pulling out the folder, and leafing through until you can find the right packing slip.

Why would you need to keep the slips? For starters, on more than one occasion a customer may suggest that they didn’t receive all of their shirts.

If the job was received complete, by comparing the total weight of the freight in, with the total weight of the freight out when you shipped the shirt to the customer, you can easily show that the same number of garments were delivered.

Receiving Department Errors

Everyone makes mistakes. Me. You. Everyone.

The important thing is that we learn from them and make things better.

One thing that I highly suggest is to keep a list of errors or challenges for each department in your business. A simple spreadsheet will do.

Make a master key, and as problems surface give them an error code. REC1 will be your first one, whatever that turns out to be. Here are some items for you to list as column headers:

• The error date the problem occurred.
• What Work Order number was the problem associated with if any.
• The customer name.
• The job name.
• What happened. In a few words describe the situation.
• Who was responsible?
• Record the final total cost to resolve the challenge. Include labor and freight in, if possible.
• List ideas on resolving the problem so it doesn’t happen again.

Keep this up to date. Have your accounting team help set this up.

The Receiving Department management team is responsible for helping create an environment where errors are minimal. This happens with accountability, training, and leadership.

Challenge: The Customer Drop Off

For contract decorators, it is sometimes common for your customers to purchase their own garments. A big challenge sometimes is when a customer zips by, sneaks in the back door, and leaves a box on a table or the floor without telling anyone.

I’ve even witnessed customers drop goods off in a garbage bag in some shops.

“What is this stuff?”, everyone asks. The problem is that if you don’t immediately count this stuff in, the customer can claim that they are missing something when it is delivered.

A solution to this problem is to not allow customers free reign in the production area, especially Receiving. If they are dropping off inventory to be produced, it must be accompanied by an already filled out packing slip that you can use to check the inventory in.

A good practice is to create a branded version of a blank template for them to use. Provide the blank packing slip for them, and insist that it is filled out.

A Final Word on Receiving Processes

While this is a general guideline for you, it isn’t everything.

For your shop, you should create processes that work, that are easy to learn and implement, and that your crew is comfortable in carrying out.

When available, use technology such as barcode scanners.

Your main priority in Receiving is to quickly ascertain that the incoming items match what is supposed to be arriving. Whether it is garments for an order, consumables such as ink or thread, equipment parts, or office supplies…your Receiving team must make sure it is the right item.

They need leadership support with the right tools, ergonomic workstations, and time to complete the work. Occasionally, they may need help. Make sure you are cross-training other staff members to fill in when needed.

Focus on the end result.

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin

“Trust, but verify.” – Ronald Reagan