Warehouse Receiving: Processes & Best Practice

Warehouse receiving is the process of replenishing stocked inventory in the warehouse. It is the first step in the process of delivering an order to a customer. 

The process includes delivering, unloading and storing ecommerce inventory in a warehouse or fulfilment centre.

A well-established warehouse receiving process can help make inventory management and fulfillment run smoother, cheaper and more efficiently.

The warehouse receiving process isn’t as simple as purchasing goods from suppliers and having them arrive at your warehouse a short while later. In order for this part of the supply chain to fit into the wider process, you need a strategic approach.

We’ve outlined the steps to follow in any good receiving process below:

Proper documentation

Before you even think about order and receiving goods, you should ensure you complete any pre-receiving tasks to make sure your cargo is delivered correctly, and on time. The main element of pre-receiving is to have proper documentation to send to suppliers and shipping partners, stating your packaging requirements. These often include:

• Label information
• Number of items per container
• Number of packages per pallet
• Number of items per carton
• Required weight and size.

In most cases, this involves answering a Warehouse Receiving Order label (WRO), which will be attached to the stock. The label contains a barcode that can be scanned and integrated with warehouse management software to view data on your purchase and check you are receiving the right order.

Receiving and unloading

The next step in the warehouse receiving procedure is to receive and unload your shipment. When the delivery vehicle arrives at the unloading area, your warehouse staff should be prepared to meet the provider and receive the cargo.

Ideally, unloading bays should be packed back-to-front in the reverse order of the delivery schedule, so that warehouse operatives can unload inventory immediately without having to move other cargo first.

Depending on the size and volume of your order, heavy lifting equipment such as forklifts and pallet jacks may be required.

Staff should be well trained in the handling and receiving process to avoid accepting any incorrect shipments. Where there are issues, concerns or discrepancies, the receiving team should  discuss with the shipment provider before signing off the delivery notice.

Inventory count

Once your stock has been receiving, the cargo should be unloaded and counted to ensure the correct quantity was shipped. Any errors or inaccuracies should be communicated to your supplier as soon as they are spotted.

Inventory inspection

As well as counting inventory, you should also inspect for possible damage caused during shipping. Damaged products should be set aside and returned for replacements. Other elements to inspect include product codes, the integrity of product seals, and the list of products on the WRO compared to what has been delivered.

Inventory storage

The final phase of warehouse receiving is the inventory storage process, which involves arranging and storing your new products in your warehouse. They can be stored on shelves, on pallets, or in bins.

Put Away Strategy

Choose a put away logic that matches your particular mix of SKUs, and the layout of your warehouse to cut travel time, reduce misplacement inventory and rehandling, and make replenishment more efficient.

• Fixed vs random – fixed slots speed up picking for fast movers, and makes picking more predictable. Random improves space utilisation, particularly for seasonal SKUs. Hybrid models are also common where some SKUs locations are fixed, and the rest are random.
• Slotting & proximity – place your high-velocity SKUs near common pick lines, being mindful of weight and stacking constraints. Group items with affinities to reduce multi-line travel and speed up picking.
• System-driven rules – use rules within your WMS such as “addition to existing stock”, or “near fixed pick bin”, to automatically generate optimal routes and reduced put away errors.

Ensuring discipline when it comes to put away has a significant impact on speed and accuracy downstream. If your put away accuracy is 100% and with a shorter dock-to-stock time, your picking processes will benefit from greater accuracy and faster picking speeds, with reduced wastage from re-handling.

ASN (Advanced Shipping Notice) Validation

Treat ASN validation as a distinct step in your warehouse receiving process by pre-loading the shipment hierarchy (pallets > cartons > items) and then scan-to-validate against the ASN rather than the purchase order. 

This results in faster receipts, fewer keying errors and a cleaner three-way match between your ASN/PO, goods received note (GRN) and supplier invoice.

Pre-validation allows teams to schedule docks and labour in advance, to auto-create put away tasks and catch any discrepancies at the door. It’s a proven way to shrink receiving time and the associated costs. 

What does an ASN include?

An ASN often includes shipment IDs/BOL (bill of lading), PO references, packaging hierarchy, item/lot data and ETA, and is most commonly communicated via EDI 856 or DESADV (Despatch Advice).

To ensure your warehouse receiving process is functioning effectively, you should track relevant KPIs and metrics including:

• Dock-to-stock cycle time (in hours) – this is the time from when the delivery arrives to when it’s available for picking. 
• Receiving efficiency – this is volume received / labour hours. You can use this to plan staffing and work effectively through peaks.
• Receiving accuracy (as %) – receipts matching your PO/ASN by SKU, including quantity and lot. 
• Put away accuracy (as %) – look at first time right. Aim as high as possible to avoid invisible inventory and re-handling.
• Lines (or units) received per hour – a simple productivity metric for your inbound teams; you should baseline by product.
• Damage-free/Doc-correct (as %) – scorecard your suppliers based on the percentage of orders received damage-free with correct documentation.

Industry studies often list dock-to-stock, inventory count accuracy and order picking accuracy among the top warehouse KPIs and metrics, and getting your warehouse receiving process right helps everything else click into place. 

The main goal of any business that receives stock should be to unload, check and store inventory as efficiently and accurately as possible, as well as make sure all inventory is accounted for. 

When warehouses or businesses don’t have a set of procedures or a robust checklist in place for unloading and receiving goods, there is a risk of ending up with inaccurate or lost inventory, leading to incorrect inventory counts that could end up impacting consumers ordering stock that in reality does not exist. 

To avoid this, businesses should provide warehouse staff with resources that outline a clear and streamlined process, including a step-by-step task list to follow when receiving, as well as a list of questions to ask and details to check. 

There are several ways businesses can enhance their warehouse receiving process. We have collected some of the best practices you can implement, whether you manage your own warehouse operations or work with a fulfilment partner such as Mintsoft.

Introduce a warehouse management system

Warehouse management systems (WMS) are the go-to solution for ecommerce businesses, 3PLs or fulfilment partners that manage the warehouse process, from receiving, to packing and shipping out to consumers. 

With a WMS, warehouse operators have access to real-time data and can scan items in quickly, seeing inventory numbers change immediately after the warehouse receiving process. This system can be integrated with other fulfilment solutions such as inventory management software that can track and manage inventory, even configured to automatically reorder stock, making sure that you never run low. 

Track inventory metrics

A robust warehouse receiving process will make tracking inventory and attributing logistics costs much easier. This is especially helpful if you store inventory across multiple warehouses or fulfilment centres. With the right warehouse technology, you can monitor and manage all inventory from one central dashboard. 

Run inspections

If stock comes in damaged, missing, or incorrect, you want to make sure it is returned before it is too late. Checking stock as it is received is recommended, but may not always be possible to do in its entirety or issues may be initially missed. We recommend undertaking periodic inventory audits such as physical counts and cutoff analyses also catch inventory imbalances before they become a problem and may influence your next round of warehouse receiving.

Double check documentation

Paper work is the least glamorous part of warehouse receiving, but double checking your documents and making sure that receiving inventory matches your purchase order will save you time and money.

Implementing a system for all receiving and shipping documents where each type of document has a numbering system and different forms are labelled in sequential order makes it easier for staff to check paperwork thoroughly and identify missing inventory.

• Implement dock scheduling to prevent congestion and missed SLAs.
• Require ASNs from key suppliers to validate at receipt and escalate any discrepancies.
• Barcode scan every pallet/carton to avoid manual keying wherever possible.
• Utilise a quarantine lane for OS&D. Don’t let exceptions contaminate available stock. 
• Capture lots/dates/serials at the door for traceability and compliance. 
• Use rules based put away/slotting. 
• Track core receiving KPIs weekly (dock to stock, accuracy, lines/hour). 
• Conduct periodic cycle counts to surface receiving/put away misses early.
• Double check paperwork using sequential numbering.
• Integrate your WMS and ASN flows to auto create put away tasks/labels. 
• Scorecard your suppliers on damage-free and docs-correct receipts. 

Having a steadfast warehouse receiving process that adheres to best practices is an investment that will set your fulfilment operation up for success. As it is the start of the process, a structured warehouse receiving procedure will help make sure that the right items and the right quantity of items are available and ready to be fulfilled. 

Here are just a few of the benefits you can expect from optimising the warehouse receiving process:

Increased stock count accuracy

Accurate stock counts are vital to businesses managing their inventory. Avoid stock shortages, forecast demand, reduce inventory shrinkage rates and maintain healthy net profit margins. 

A comprehensive receiving process checklist for staff or automation through inventory scanning for real time updates help to ensure the contents of a delivery match the original order.

Fewer stock shortages and dead stock

Stock shortages can cause customers to seek products elsewhere and lead to negative reviews that harm your brand’s reputation. Alternatively, overstocking (known as dead stock) leaves businesses with a surplus of inventory that cannot be used to deliver a return on investment, let alone a profit.

An optimised warehouse receiving process will work towards preventing both of these issues such as a supplier delivering the incorrect quantity ordered.

Efficient inventory storage

Another benefit of improving your warehouse receiving process is that it can help with inventory storage strategy, making sure inventory is stored in the most efficient, cost-effective way possible.

Upgrading your operations using a WMS (warehouse management software) to scan inventory when it is received will allow staff to retrieve instructions on how to unpack and store inventory, as well as how to pick, pack and ship items once sold.

Investing in warehouse management software will make sure you can count, check and organise stock faster and more accurately, providing you with real-time data and insights directly from the warehouse floor the moment you replenish your stock.

Mintsoft’s warehouse management software allows you to track inventory levels, increase picking and packing speed and accuracy, as well as monitor shipments. It also lets you create reports that inform you of further ways to improve, saving you time and money. 

Book a demo to find out more about how Mintsoft can support your business today.