Improving 3PL Receiving Inspection

Warehouse workers unload imported shipments. (Photo by Kyle Bruggeman/News21)

Warehouse workers unload imported shipments. (Photo by Kyle Bruggeman/News21)

Staying competitive in the 3PL warehousing and logistics industry is a full-time occupation.

Standard Operating Practices (SOP) and Work Instructions (WI) are designed to eliminate waste, optimize efficiency and maintain the highest level of customer satisfaction. You would think that LEAN methodologies have removed all the inefficiencies, but is that really the case?

One thing that has always been a persistent issue is getting quick responses to receiving inspection problems. Inefficiencies add to overhead costs and lower customer satisfaction.

Scenario 1

We see this happening all too frequently….

Customer’s product arrives at the loading dock and some of the shipment is damaged. Most of it is fine, but several boxes, pallets, or containers are damaged. Now your SOP/WI kicks in.

The lift truck driver inspects the damage with his/her supervisor. A Receiving Damage Report is completed along with some pictures while the product is unloaded and moved to a warehouse location.

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Next, the supervisor walks the inspection report and a file (or camera device) with the pictures, across the warehouse to the Customer Service Rep (CSR) for this customer.

The CSR loads the pictures onto their computer and creates an email to the customer asking them for instructions. In some instances, the CSR may include a suggested resolution. Depending on the level of detail in the CSR’s email, the customer may come back and ask for further information. The CSR provides the missing info, quotes a price and again waits for a reply.

The customer gives their approval. The CSR issues a Pick Ticket or Work Order with instructions to the Warehouse. The costs of this back and forward process (Warehouse/CSR/Customer) are not captured as it is simply a cost-of-doing-business (CODB). It is precisely these types of hidden costs that add no value and keep overhead costs high.

Staying competitive in the 3PL warehousing and logistics industry is a full-time occupation….

Now suppose a Warehouse Manager reviewing operations for the past six months, has the impression that one or two transport companies are responsible for the majority of damaged product being received, and wants to confirm this in order to take corrective action.
To further investigate, hard data, pictures, damage reports and resolution from each of the CSRs are needed. Often pictures are over-written and/or filed in a manner that makes it time consuming to correlate the transport damage pictures with the damage reports and subsequent invoice costs for the resolution.

This scenario leads to increased Risk and Inefficiencies for your business:

  1. Even though the customer usually selects the transport company, if the customer’s Key Performance Indicators (KPIs) are simply attributing the damage to your 3PL Warehouse, then you may be at risk of losing the contract to a competitor in a different area where they use a different transport company.

  2. Wasted movement of personnel between the warehouse and customer service add to your costs. The time it takes to complete the forms and emails, along with the potential for missing information and/or poorly worded emails to the customer, can all increase your costs and lower efficiency.

  3. The time to compile data, create reports and statistics can be huge (finding missing pictures, data and other important information). It often requires dealing with multiple CSRs and warehouse personnel to get the full picture.

There is a better way….


Scenario 2: Using CIS to manage Receiving Inspection

The same shipment arrives at the dock with some damage as before. This time the lift truck driver takes a picture and loads it into his/her receiving inspection report on a tablet or warehouse computer. The inspection report contains all the specific information needed (quantity received, quantity rejected, transport company, suggested disposition, etc).

As soon as the lift truck driver completes the report, an email is automatically sent to the customer with a copy to the responsible CSR describing the damage (including pictures, video), the suggested disposition and the name and email address of the CSR to reply to. The email is worded professionally, consistently portrays your company (including your company logo) and includes ALL the necessary information for decision-making.

Multiple emails are eliminated. A quick click by the customer sends the reply to the CSR who will then issue a work order in CIS (or in your warehouse inventory management system) to proceed. All relevant information is automatically transposed to the work order eliminating the risk that some data may be missed. Often, this happens in less time that it originally took to walk across the warehouse floor to Customer Service - a huge overhead waste has just been eliminated.

In addition, the customer file and the transport company’s file are linked to the Non-Conformity (NCR) including any and all pictures and correspondence. Of course the NCR is also linked to the corrective action and work order(s) and is available for future reference.

Built-in dashboards with CIS alert you to problems in your operations. By tracking damage by customer and transport company, you can identify trends and problem areas allowing you to take preventive action. With fact-based evidence you can work with your customers to get to the root cause of the problem.

  1. Non valued-added steps are eliminated with CIS Software (Click here to book a demo and learn more).

  2. In CIS, anyone with authorized access, can pull up this information, sort it in any manner and graph it immediately. It’s always accurate, complete and readily available.

  3. Your dashboard Key Performance Indicators (KPI) and automatic reports show performance across the operation, allowing you to act before a situation gets out of hand and customers complain.

Better still, your customers will love your efficiency, professional response and high level of service you are providing. Customers can also be given limited access to your CIS system to see all the incoming inspections including the pictures and results for their products (and not any other customers). If you so choose, they can even provide the instructions directly into CIS and eliminate email instructions.

And this is only the tip of the efficiency iceberg.

The ability to revolutionize your warehouse operations with CIS automation extends to document management, employee training, audits, management meetings, safety, corrective actions, risk, continual improvement and just about anything you can think of. (Click here to book a demo and learn more).

Once you start using CIS, you will discover even more ways to improve operations. You can quickly and easily build and integrate new applications. CIS gives you the tools to program any workflows, portals and reports you can come up with – without the need to hire programmers. Finally get valuable company information (rogue spreadsheets, reports, data) out of individual workstations and share that knowledge with everyone in your organization.

If you still rely on manual processes for receiving inspection, you are falling behind the competition. In today’s market with slim profit margins, you simply can’t afford the status quo.