The golden triangle of warehouse management

Posted by Steve Bayley 3 Feb, 2016

The golden triangle of warehouse managementThe term ‘golden triangle’ was originally used to describe a geographic area overlapping Laos, Thailand and Myanmar (Burma) which was once notorious as the world’s prime producer of opium. More recently, India joined the royal cities Delhi, Agra and Jaipur to create its own tourist golden triangle, and UK academia has a golden triangle of elite universities between Cambridge, Oxford and London. But can there be such a thing in warehouse management? 

It’s often said that the most critical part of managing a warehouse is the goods in or receipting process. Get things right on the way in, and you have a good chance of making the rest of the process work. Identify stock wrongly on the way in, and you are unlikely to have a happy experience with the rest of the process. The trouble is that the necessary steps to get it right can take time and soak up a lot of resource. 

Chasing suppliers for information about shipments, dealing with poorly labelled deliveries, reconciling these to purchase orders and working out where to put them all can be a pain and a laborious process. So, what is the golden solution to this problem?

The three points of the warehouse management triangle

Increasingly, companies with Warehouse Management Systems (WMS) are finding that three elements can make up ‘the golden triangle’ of receipting.

  1. Electronic Data Interchange (EDI) is being used more and more to send out purchase orders and get back supplier acknowledgements. The trick is to use a set of standard templates so that you don’t wind up re-inventing the wheel for each supplier.
  2. Advanced Shipping Notice (ASN); as a follow on from the order you ask for exact details (via EDI) of what is within each shipment, with a unique reference number to make every delivery easily identifiable. Use this to pre-populate your WMS receipting module and you can enjoy a big time saving. Better still if you have a WMS with a shareable booking-in diary, so everyone can see what is arriving when and from who – without the need to perform time-consuming manual data entry.
  3. RF receiving is a big timesaver if the former two technologies are in place. You can move receipting screens out of the office and onto a handheld device to receive barcoded stock straight off the truck.  If you have a WMS with single step receipting and auto putaway process, you can also move every item of stock from the truck straight to the ideal location in the warehouse in a single step.

Huge labour and time savings can be found by implementing all three steps, especially in the case of companies that have to rekey information into their WMS and then manage the putaway process manually. EDI, ASN, and RF receipting could just be the new golden triangle for your supply chain.

Find the right warehouse management system for your business

The most frequently quoted reason for not implementing these processes (apart from not having the technology) is that suppliers won’t play ball. The obvious answer is get new suppliers who will, but that isn’t always viable. 

Here’s a practical suggestion.  Next time you talk to a supplier, ask them about their biggest customer (assuming that’s not you) and what they do for them.  There is a good chance that some of ‘the golden triangle of receipting’ may come out of the woodwork. In that case, what’s to stop them from doing it for you as well?  On the other hand, if you are their biggest customer, then they ought to be willing to make some changes in order to keep your company happy.

Topics: Warehouse management