Inbound logistics refers to the management and processes involved in the transportation, sourcing, procurement, and storage of raw materials, components, and other goods necessary for a company’s production or operational activities. It is a critical part of the overall supply chain management process, focused on efficiently bringing materials into an organization’s facilities.
Some of the key aspects of inbound logistics include sourcing & procurement, supplier chain management, procurement, transportation, warehousing & storage, inventory management, and quality control & inspection. In this article, we will discuss some of the best practices for putaway and receiving using Oracle EBS and Oracle Cloud that include using the latest mobile supply chain/inventory platforms for Oracle Inventory and WMS, solving connectivity issues, drop-shipping, data validation, UOM optimization, streamlining inbound processes, and more.
Role of the Receiving Function in Inbound Logistics
In a warehouse, the receiving function determines the quality (shipping damages), compliance requirements, and accuracy of goods received from suppliers, customers, and other organizations within the same company. If garbage comes into the warehouse, you will ship it out. As a result, customer satisfaction levels will be at stake.
During receiving, material handlers verify the incoming goods, typically against a purchase order or an ASN, unpack the contents, inspect the product condition, verify the quantity shipped, repackage, put into LPNs/pallets, update the Oracle Mobile Inventory or WMS systems, print labels to direct the movement of the goods, and putaway the goods into inventory.
Receiving is a critical function, as it helps a production planner understand what raw materials are available for manufacturing and when they will arrive if they are not in stock. For companies receiving finished goods, real-time and accurate recording of receipt transactions using mobile barcode scanners helps receive sales orders without any backlogs or stockouts. When products arrive damaged, without labels, with inaccurate parts, or late, the downstream supply chain suffers from production delays, poor customer service levels, and overall higher manufacturing and warehousing costs.
So, the overarching goal of a receiving department is to record the goods receipt information accurately in real-time at the receiving dock by using a barcode scanner or mobile to update ERP systems like Oracle EBS or Oracle Inventory Cloud in real-time.
Best Practices for Oracle EBS Goods Receiving and Putaway Inbound Process
1. Leverage the latest Mobile Supply Chain/Inventory Platforms for Oracle Inventory and WMS
Record the goods receipt information accurately in real-time at the receiving dock by using the barcode scanner or mobile to update ERP systems such as Oracle EBS or Oracle Inventory Cloud in real-time.
2. Solve Connectivity Issues
If you have connectivity issues at the receiving dock, your material handlers’ productivity will suffer. Solutions such as Oracle MSCA are not helpful in offline mode. You need an offline-first architecture that guarantees 100% data capture. Propel Apps’s Mobile Supply Chain platform works offline (from several hours to several days), enabling you to process all the goods receipts.
3. Validate Data
Whether you are connected or in offline mode, all data must be captured and validated before updating the Oracle Inventory/WMS system. One of our customers, who uses Oracle MSCA, had so many issues with poor-quality data. To address these issues, dedicated support was provided.
4. Train Material Handlers
Help material handlers in understanding what they must do when material arrives damaged, in inaccurate quantities, or late. You need to have pre-specified operating procedures to handle such exceptional scenarios. Customers can use Propel Apps’ Mobile Supply Chain platform to guide material handlers on how to handle exceptions in real-time that are based on EBS configuration rules.
5. Design Receiving Process with Clear Goals
For any organization that has implemented Oracle EBS inventory management or Oracle EBS WMS, the goal is to shorten the putaway time from receiving to staging and from staging to putaway. Another goal for our Oracle EBS customers is that the goods received must be easy to inspect and repackage. For some of our customers who receive a lot of smaller quantity items, LPN is one of the best ways to reduce the mobile scanning required during the receiving process.
6. Drop Ship
The best practice for receiving goods is not receiving them at all. Look for opportunities to directly ship to your customers, DCs, and other plants. Drop shipping eliminates the need for any unnecessary, non-value-adding steps such as receiving, inspection, moving, putaway, storing, and picking.
7. Direct Delivery
Direct delivery allows you to view material that shows up in the on-hand balance right away. This routing method provided by Oracle Inventory Management is preferred over others since it allows you to receive inventory directly from an on-hand storage location.
8. UOM Optimization
Some of our customers optimize their orders by matching the quantity purchased with the quantity of raw materials consumed in manufacturing, and the quantity shipped out of the door. For example, if you are a distributor using Oracle WMS and your customer is receiving goods from you in LPNs, it is better to receive goods in an LPN. This method of receiving and shipping LPNs reduces packing, unpacking, and packing again. Let’s say that your production process requires one gallon of chemical. Thus, it is better to order that chemical in gallons.
9. Prioritize Direct Putaway
Skip receiving inspection, putaway, storage, and replenishment vs. direct secondary putaway (skips receiving staging + inspection) vs. traditional receiving (requires staging at receiving, inspection, putaway to reserve storage, and replenishment to primary picking locations).
10. Advanced Shipment Notifications (ASN)
ASNs provide better visibility into your supply chain, allowing you to plan ahead of time and respond more quickly to dynamic market conditions. Furthermore, ASNs help in scheduling trucks, material handlers, equipment, and more in advance. The direct putaway location should not be the easiest to find. It should be based on optimization, utilization, and picking optimization.
11. Use System Directed Putaway
You can configure system-directed putaway tasks with Oracle WMS. The Rules engine reduces item fragmentation, eliminates the lot coming in a locator, directs restricted items to relevant restricted locators, and places items in pick optimized locators. A traditional putaway with a Rules engine, such as Oracle WMS, costs four times as much as a directed putaway with Oracle WMS rules.
12. Reduce Disputes
Non-compliant receipts must be digitally recorded with photos, the condition of the materials, quantity accuracy, and delivery dates. You can include this digital proof when you are communicating with the supplier.
13. Classify Suppliers
As we categorize cycle counts as “A,” “B,” and “C,” so should suppliers be categorized according to their quality standards. All unreliable suppliers must be charged for inspection. You can use machine learning to classify suppliers. This classification information can be used in mobile apps during barcode scanning to either manually inspect the goods or automatically route the goods for inspection.
14. Automated Receiving Inspection
Manual inspection is time-consuming and inconvenient. You may automate the inspection process even further by employing a Vision System to read labels, take images, and record condition and quantity.
15. Exception Handling
If locators are full, you need to record exceptions. These exceptions can trigger a custom workflow, such as cycle counting. You can configure the custom workflows easily with the Oracle WMS Rules engine. This triggers a cycle count when it is not possible to identify the root cause of the locator issue.
16. Use Pre-packaged LPNs
If you are using Oracle WMS LPNs for material movements, it is ideal to pre-generate the LPNs and print them. By doing this, you can avoid the LPN generation and LPN label printing processes during receiving.
17. Prioritize Putaway with “A”, “B”, and “C”
You do not have to putaway every item on a high-priority basis. For example, fast-moving items need to be putaway first so pickers won’t run out of stock. Another example is that if an item is already out of stock, it is recommended to putaway into inventory.
18. Automate Putaways to Reduce Errors
You can configure Oracle WMS to generate system-directed putaway tasks that determine the most optimized locators for an item. If you leave it up to the material handlers, they may make errors. With system-directed putaway tasks, material handlers can scan the sub-inventory and locator to confirm the location of the material destination.
19. Prioritize Purchase Orders/ASNs
Using the Propel Apps’ mobile supply chain platform, material handlers can see which PO or ASN is overdue, and which PO has higher priority items. This kind of prioritization is useful for organizations with numerous POs coming in every day from suppliers in a short span of time. Instead of receiving any PO/ASN, prioritization helps optimize your supply chain.
20. Capture Lot and Serials at Receipt
If you are an Oracle WMS organization, you can capture the lot and serial attributes during the receipt of goods. This feature is not available for Oracle standard purchases.
21. Streamline Inbound Process
Operation plans in the Oracle WMS Advanced Task Framework let you build material moves and handle incoming material. Also, this framework greatly improves operating efficiency by streamlining material flow and reducing required travel.
22. Mobile Label Printing
Gone are the days of centralized printing with Oracle EBS business flow configuration. Warehouse managers seek the flexibility of decentralized printing with quick printer setup, quick label design, and on-demand decentralized label printing without relying on Oracle EBS at corporate locations.
23. Reverse Logistics Optimization
It is impossible to receive materials in the right condition and quantity at the right time. You may need to return the material to the supplier. Therefore, equip your material handlers with a PO/ASN based returns app in which they can scan a purchase order or an ASN to return the material quickly from the staging area to the right supplier instantly.
24. Use Cross-Docking
When you have backordered products and new supply arrives from production (WIP completion) or Purchase Order/ASN based receipt, you can arrange for Oracle WMS cross-docking to route you to a cross-docking site. Cross docking eliminates the need for staging, putaway, and picking.
To sum up, the primary objective of adopting these best practices is to generate an optimized warehouse for seamless supply chain operations.
Propel Apps, an award-winning enterprise mobility solutions provider, designs custom mobile strategies for organizations using Oracle and SAP ERPs. With over 100+ mobile app project implementation experience, Propel Apps helps organizations redefine business processes across various industries, including wholesale, retail, manufacturing, finance, transportation, and logistics.