Streamlining Warehouse Functions: Controlling Variable Receipt Rates

(i) For many categories of goods, quantity and product mix will vary over a week or any other period. Goods that are the same or similar could be received in different or similar quantities each day, with frequencies of delivery varying as much as the content of the deliveries. With real time upstream visibility, the warehouse may have accurate information regarding quantities, the mixture of goods due to arrive, and estimated arrival times. Without real time upstream visibility, the warehouse can only make predictions based on historical patterns, if such historical data exists and remains valid. For example, on Monday, 10 different products may arrive for reception; on Tuesday, 50 different products could arrive, with each product in different quantities. Such a receipting pattern can best be described as lumpy. With averaging however, resources can be allocated and loading estimates made for smoothing or levelling the work required in preparing and processing received goods.

(ii) Using averages based on receipting or supplier-issued data on recent orders, an inventory manager could smooth the quantity of a particular good by controlling the ordering pattern, or request that orders are grouped at supplier despatch according to their product mix. In this way, the variety received can be limited and receipting processes thereby made more efficient. For example, if product A arrives every day and is dispatched according to typical, predictable patterns, a sufficient quantity of product A could be ordered once a week to cover the week, which would limit the receipting of this product to a single day’s activity. Single activities, although or because they are repetitious, tend to be performed more efficiently than complex, mixed activities. Alternatively, if variety is proving to be an obstacle to efficiency, that too can be controlled so that, for example, every Monday only product A is received; on Tuesdays, only product B is received, etc. Both of these approaches assume that demand for these goods is unlikely to fluctuate in an extreme way. In other words, both of these approaches to smoothing or controlling receipting processes are contingent on predictability in the demand patterns of the goods being received.