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Why Receiving is Not Returns

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If you are evaluating warehouse software solutions and returns functionality is a key value driver for savings through the use of a new application, be prepared to be disappointed. Most warehouse software providers do not provide a dedicated returns module capable of supporting serious returns functionality capable of efficiently processing between 15-30% volume compared to outbound sales. Distributors to large retailers who contractually can return any product they purchase free of penalty OR retailers who face season product rotation know this all too well.

Attempting to sell a generic receiving module as a viable option to adapt to these high volume returns needs is not practical for many reasons as a detailed review of the differences between receiving and returns will show:

Terminology

  • Receiving is processed against a purchase order while returns are processed against return authorizations.
  • Receipt processing generally involves unitizing items to a standard pallet ti and hi while returns are checked in and examined at the piece level.
  • Receipts are generally brought in under an inventory status, while returns are processed by cost accounting disposition code.

Supporting Operational Process

  • Receipts generally require the following process from the time the supplier trailer arrives:
    1. Validate PO/SKU/Quantity
    2. Unitize cases into standard pallet ti/hi
    3. Sample cases are inspected for quality control/vendor scorecarding
    4. Pallets are located into inventory using configured business rules
    5. HOST application is updated with inventory/PO changes.
  • Returns generally require the following process from the time the inbound carrier arrives:
    1. Cartons are counted and validated against RMA/RA
    2. Cartons are opened and each item identified
    3. Items can be validated against a corresponding sales order or customer
    4. Items are visually inspected for cost accounting disposition
    5. Re-salable items are initially sorted into totes awaiting full case consolidation
    6. Consolidated full cases are located into inventory
    7. HOST system integration determines customer credit amount.

Supporting Warehouse Staff

  • Receiving will require resources dedicated to unloading/unitizing, counting/verification, and locating per inbound trailer, with an option for a single resource to completely process an advanced shipping notice receipt.
  • Returns will require a single resource dedicated to case-level check-in, and multiple resources, dedicated to a terminal processing station for piece level disposition processing.

The clear diversity of required data elements, supporting operational processes, and required resource staff between standard receiving and returns processing highlighted above cannot be realistically supported by the same series of software processing screens. If returns is a process that can be improved through value-driven processes, take the time required to ensure that you are not solving a returns issue with a receiving solution.

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