In our article on the goods receipt process we discussed the typical process steps together with its usual inputs and outputs.
The goods in receipt process can, for many organizations, prove itself to be a key bottleneck causing various issues and wastes (check out the article on the seven wastes here). The importance of ensuring speedy delivery of materials to the manufacturing line, or in the case of a distributor, the customer cannot be under-estimated – so much hinges of this process that it’s vital that it functions efficiently and effectively.
So what type of issues can affect the goods receipt process?
1/ Goods receipt process is slow to transact new items
This is an issue that is typically born out of inadequate capacity or prioritization. Where the goods in team fail to process new materials in an efficient manner then this can affect flow to the point of use resulting in line stop and wasted resources. One simple method that can be used is some forward planning by reviewing the forward order book and forecasting what receipts are required to be processed and establishing suitable manning levels to manage. A suitable goods receipt priority system will ensure that urgent items are given appropriate attention.
2/ Accepting poor quality materials
One of the primary functions for the Goods receipt process is to act as a gatekeeper – typically inspecting delivered materials on arrival to ensure that
a) They are against a valid purchase order
b) They confirm to specification (usually by ensuring appropriate accompanying release documentation)
c) They are in appropriate condition (i.e. not damaged)
Once again a failure to carry out this process effectively means that poor material can either reach the assembly/production line, resulting in line stoppage where the material is inadequate, or worse still it gets to the customer!!
3/ Accepting materials before they are required.
One common business issue is supplier schedule adherence – this means how well orders are delivered against the requirement dates stipulated on the purchase order. Many businesses have problems with late deliveries – however early deliveries are as much as an issue – consuming resources (in processing) and cost (in handling and early payments). The goods in team are the first line of defense against early deliveries.
Many organizations operate a tolerance where early deliveries by a set number of days can be allowed but beyond that they are required to be sent back to the supplier (at their cost). Inventory costs can run out of control if suppliers are allowed to deliver when they like as the chances are that if they are delivered early, material will sit on the shelf unused as it waits for either other components or a slot on the production line.
The above is not an exhaustive list – the goods receipt process is a vital part of the material flow in any organization – one that operates efficiently and effectively can help drive the rest of the plant adding value to the customer and assisting in the control of cost.