Executive Summary
Say you are at home and suddenly you hear the doorbell. You see your neighbours have popped in, unannounced, for dinner. Now you have to decide what to make for your guests. You grab whatever is around at home, and rush through a quick dinner. When you are rushing through the process, lack of preparation leads to panic, haste and probably some mistakes.
Now imagine a different situation in which you have guests coming for dinner. You know exactly what to cook, you have set the table, and you are peaceful and relaxed. The dinner goes well and you feel fine.
Being prepared always pays off and that is exactly the principle of ASN.
What Is an Advance Shipping Notice and Why It Changes Everything at the Receiving Dock
An ASN (Advance Shipping Notice or Advance Shipment Notification) is an electronic document sent by a supplier to a warehouse prior to the arrival of a shipment. Basically it is a way of telling the people at the warehouse what products are arriving, how they are packed, and which purchase orders (POs) the shipment is fulfilling. Therefore, the warehouse is ready well before the delivery, before the truck arrives at the dock.
With an ASN, most of the receiving work is done before the truck arrives
What an ASN Contains
An ASN contains a variety of information about the shipment.
Carrier and timing
It includes information such as the carrier name, tracking or PRO number, and the delivery date and time.
Purchase order references
It also gives the numbers of the purchase orders and line items that are part of the shipment.
Item detail
Regarding the details of the items, it gives the SKU (Stock Keeping Unit), a description related to the product, the quantity of products per carton, the total quantity and unit of measure.
Packaging detail
Further information includes packaging related information such as number of cartons, pallet configuration, SSCC pallet labels and pallet count.
Traceability data
The ASN can also carry other information such as lot numbers, expiration dates or serial numbers, for products that need to be tracked.
How it is transmitted
Most ASN shipments are shared through the so-called EDI 856 standard (or ASN EDI transaction). EDI, or Electronic Data Interchange, is a common format for suppliers and warehouses to electronically communicate information related to shipment.
Most retailers and distributors need the ASNs using the EDI 856 to be sent to them by the suppliers. However, it is not mandatory for suppliers to use EDI, they can still send an ASN through various mediums including a structured email format, supplier portal, or even through an API connection that their ERP or a warehouse management system (WMS) may have with the receiver's WMS.
- When the WMS receives the ASN, an expected record of the receipt is created.
- The system is already aware about the purchase orders that would be arriving, any lot or serial information, the expected quantities and the putaway rules related to each item.
- A lot of this work is completed before the arrival of the truck, therefore making the receiving process faster, better organized and more accurate.
- The staff is expected to first unload the shipment, identify the contents within, and match them to the purchase orders.
- Then count the products and enter the data gathered, manually.
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Dock Scheduling: How ASNs Enable Proactive Inbound Management
The first benefit of an advance shipping notice (ASN) would seem to be on the receiving dock. But really, it begins before the truck even arrives. Once the WMS has received the ASN, the warehouse can pass shipment details to the dock scheduling system. This therefore helps warehouse managers to assign dock doors, prepare the correct equipment to unload and schedule the right staff to do it.
Therefore, these steps together make the inbound logistics process more organized and smooth-flowing.
The right door and the right slot are both decided before the truck arrives
Assigning the Door and the Time
- Right door for the right shipment: among the most important tasks in warehouse dock scheduling is the assignment of the right dock door to each shipment. Refrigerated trucks can be routed to temperature-controlled docks, bulk pallet shipments to doors with forklift access, and parcel deliveries to areas receiving small packages.
- Appointment time slots: without this there is a high chance that several trucks will arrive at the same time and create havoc, overwhelming the receiving team. With dock scheduling, deliveries are spread out throughout the day and streamlined based on the staff that is available and the capacity of the docks.
Tracking the Yard and Warning the Floor
- Yard management: much inbound logistics software and warehouse dock scheduling also includes yard management, which tracks where trucks wait, when they move to a dock and how long they stay on the site, avoiding needless delays and detention charges for carriers.
- Pre-receiving alerts: the system can also send alerts to supervisors when an ASN is received. These alerts provide valuable information about the shipment including when it is arriving, the expected time of arrival, and the equipment and staffing needed to handle it.
Yard visibility is what keeps detention charges off the invoice
If there is no dock scheduling, then we have a first come first serve process where trucks are handled. This can cause congestion and delays in receipt. However, if ASNs are fed into the scheduling system, warehouses can be well prepared and improve throughput and create a more predictable inbound logistics operation. Many companies accomplish this through investments in custom WMS development that ties ASN processing to dock scheduling and other inbound logistics solutions.
Step-by-Step Guide to the Warehouse Receiving Process
The warehouse receiving process is a series of steps that involves moving a shipment from a truck into inventory. Each step has a dual purpose: either to confirm the received shipment against the advance shipping notice (ASN) or to capture information required by the warehouse management system (WMS) and the ERP system.
A warehouse needs a well defined receiving process to increase inventory accuracy, speed up unloading and reduce receiving related errors.
Warehouse receiving process checklist:
- Carrier check-in and dock allocation
- Trailer inspection and seal verification
- Pallet count and unloading
- Item check and receipt scanning
- Quality inspection routing
- Purchase order confirmation and receipt posting
Carrier check-in and dock assignment
Upon arrival of the truck, the driver reports to the receiving office or guard house with the bill of lading (BOL) and appointment information. Then the dock scheduling system (WMS) confirms the appointment and assigns a dock door.
Then, for ASN-enabled shipments, the receipt record is immediately available to the receiver, showing the shipment information before the trailer is opened.
Trailer check and seal verification
The warehouse personnel inspects the trailer before unloading and verifies the seal number against the ASN or bill of lading. Trailer temperature is monitored for temperature sensitive products.
Next, the staff check for any sign of damage, moisture or pests. Before unloading starts, any difference in the seal number and/or visible damage is noted as an exception.
Pallet count and offloading
The shipment is offloaded and the pallets are brought into the receiving area. Pallets are counted against the ASN to verify that everything has been delivered.
Damaged cartons will be segregated for further checks. If the pallets have SSCC labels on them, then workers can scan the labels to link the pallet to the ASN and purchase order, as opposed to manually keying in the information.
Checking items and scanning receipts
Each carton or item is scanned as it moves to the receiving station. The scanned information that comes in through the WMS receiving process is checked against the expected receipt that is based on the ASN.
The systems flag any under shipment, over shipment or incorrect items for review. Lot-controlled products are identified by lot numbers and expiration dates and serialized products are identified by serial numbers. This is also the Critical Tracking Event (CTE) required under FSMA 204 as it links the supplier's lot information to the inbound receipt.
Routing of quality inspection
Quality check is needed for some products before they can be used or sold. These might be new products, shipments from new suppliers, or from vendors that have had quality issues in the past.
These products are diverted automatically to a quality hold position. These products must pass inspections before they can be used or sold, or used in production.
Confirmation of purchase order and receipt posting
The receipt is confirmed in the WMS after the shipment verification. The system then fills the ERP with the received quantities, lot or serial information and the delivery date.
In this process the purchase order is also updated and the related financial transactions are triggered in the ERP system.
Still Keying Receipts Into the ERP by Hand?
20 minutes. Tell us which ERP you run and whether a dock scan updates the purchase order, inventory and AP accrual on its own, or whether someone re-enters it later.
Putaway: From Receiving Dock to Storage Point
It is important that you receive a shipment correctly, but it is as important to put it away. Putaway is a warehouse management process that includes moving inventory received at the receiving dock to the appropriate storage location and updating the warehouse management system (WMS) to know exactly where the item is stored.
A good putaway process in a warehouse will help to increase picking efficiency, as items are stored in the right location from the start. Products that are misplaced increase the time it takes warehouse workers to locate them during order picking.
Scanning the location is what makes the item findable later
Three Common Types of Putaway
Random putaway
The nearest available storage location is assigned taking into consideration the item's requirements like rack capacity, temperature or storage zone. This method best utilizes space, but may place frequently picked items very far from the shipping area.
Fixed putaway
Each product is assigned a specific storage location. It makes it easier for workers to remember where everything is stored. However, the process can lead to a waste of space if the location assigned to a product is only partially filled.
Directed putaway
The process of using WMS rules to determine the best location to store an item. The system takes into account the ABC classification of the item, the available space, the storage requirements and the picking activity. For example, A items that move quickly could be stored near the shipping area, while C items that move slowly could be stored further back.
Putaway Rules That Improve Warehouse Operations
Zone-based putaway
Products are directed to the appropriate storage locations. These products contain hazardous materials, food or temperature controlled areas.
Velocity-based slotting
Using velocity-based slotting, fast-selling products are located near packing and shipping stations to minimize time.
FIFO and FEFO rules
FIFO or FEFO rules ensure that the older inventory is picked first for products that expire.
Lot segregation
Lot segregation is the practice of keeping separate lot numbers in separate locations. In food, pharmaceuticals and aerospace industries this is done. This helps to support traceability.
For directed putaway to work well, warehouses require a WMS with configurable putaway rules, accurate item and location data and barcode or RFID scanning. When the worker scans the storage location, the WMS updates the inventory in real time. This makes each item easy to find when necessary.
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How the Receiving Event Connects to ERP: PO Matching, AP Accrual and Inventory Posting
This completes the physical receiving process and the items are then put in their designated locations. This is the beginning of the ERP process. This is an important stage for four financial and operational records to be updated automatically in the ERP once the receipt is confirmed through the warehouse management system (WMS). In some mid-size businesses, one or more of these updates is still done manually, which can lead to delays and mistakes.
The ERP updates the purchase order
The first step is that the ERP updates the purchase order. Here it is confirmed how many items have been received compared to the number that was ordered.
If only a part of the order comes in, the rest is open. If more items are received than expected, the system will flag the shipment for review.
The receipt records an AP accrual
In the second step, the receipt records an accounts payable (AP) accrual, which is the company's obligation to pay the supplier even before the invoice arrives.
In accounting terms, the ERP will debit inventory or a goods-in-transit account depending on the setup of the company and credit the AP accrual account. This step makes sure the financial records reflect the goods that have already been received.
The ERP updates the inventory balance
In the third step, the ERP updates the inventory balance. At this point all received items are added to inventory at the company costing method.
This involves standard cost or purchase price. This step ensures that the financial inventory matches the physical inventory in the warehouse.
The ERP creates a traceability record
At the final stage, an ERP creates a traceability record for lot and serial tracked products, by associating the supplier's lot or serial number with the purchase order, date received, quantity and where it is stored.
This process is the foundation for end-to-end product traceability, which is essential in sectors such as food, aerospace and pharmaceuticals. These records are used by solutions such as lot traceability software to track products throughout the entire lifecycle.
Without integration of the WMS and ERP, there are a number of potential challenges. Warehouse staff can book goods into the WMS. Somebody has to then manually key in the same information into the ERP later. This causes a delay in inventory update, AP accrual and lot record keeping, which increases the chances of mistakes.
With integration, a scan at the receiving dock updates the PO seconds later, creates the AP accrual, posts the inventory and records lot information, all as part of an integrated system. This in turn removes manual data entry, and helps accurate ERP inventory management.
Connecting Dock Scans to ERP: What GrayCyan Builds
One receipt scan updates the PO, inventory, AP accrual and lot record together
Dock Scans Into ERP Records
- GrayCyan helps build the middleware connecting barcode and RFID scan events at the receiving dock to ERP purchase orders, inventory records, accounts payable and lot traceability records. All of this is performed automatically, in real time. This process removes manual data entry and aligns warehouse activity and ERP records.
- GrayCyan supports ASN pre-receiving for inbound receiving, allowing supplier ASNs to be loaded into the receiving workflow before the arrival of the truck. Warehouse personnel can verify receipts directly against the ASN, rather than using paper documents to check shipments.
- The platform also links dock scans to the ERP so that a single receipt scan can update the purchase order, inventory records, AP accrual, and lot information all at the same time.
CTE Capture and Directed Putaway
- The receiving workflow captures key data such as lot number, quantity, supplier details and storage location at the critical tracking event (CTE) and stores it in a compliant format for businesses that need to comply with FSMA 204.
- GrayCyan also supports directed putaway by using ERP item master data including velocity class, storage zones and FEFO rotation rules to direct workers to the correct storage location.
- The company has integrated receiving workflows with ERP systems such as NetSuite, SAP, Epicor, Acumatica, Fishbowl, Odoo and Microsoft Dynamics 365. Discover more about custom WMS development and WMS for manufacturing.
Directed putaway reads velocity class and FEFO rules from the ERP item master
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Frequently Asked Questions: ASN, Receiving, and Putaway
Gaps Between Your Dock and Your ERP at Receiving?
Are you still relying on manual data entry or disconnected systems for receiving? You are losing time and accuracy. Tell us what ERP you are using and where your receiving workflow is breaking down, be it the ASN process, PO matching, lot number capture or ERP posting at receipt. GrayCyan will show you how to optimize your operation by linking dock scans to ERP records.
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