DSD Receiving

While store margins begin with purchasing and pricing, the true opportunity to protect real dollars begins with the receiving process. It is here, with one of the general staff in your organization, which the asset protection process begins. Because these people are typically non-management and have no stake in the company, it is extremely important to properly train, provide strict procedures to and audit these employees. By following the practices below, you can help to insure that the product cycle starts off correctly. The problems poor receiving can cause range from shrink, health issues with un-maintained damages and a slow front end due to items not on file.

The most important factor to effective receiving is a well-organized receiving area. This organization will prevent confusion and insure all products are adequately checked in, credits are received and vendors are monitored. This well defined receiving area can be accomplished using the following techniques:

Set up two defined areas on the receiving floor
One defined area will be for the vendor whom you are physically receiving. The second area is a staging area for the next vendor who will be received. All other vendors should wait outside of the store for their appropriate turn at delivery. These areas can even be marked by yellow lines painted on the floor of the receiving area.

Set receiving hours
Many times business dictates a wide receiving time. However, a range should be established. The range of hours should be set so there is a qualified receiver at the back door during those hours. This will insure that proper procedures will be followed when product is received.

Note: exceptions will always occur but should not be the standard. For example, if you are awaiting merchandise on sale and the driver is late, you will probably want to make an exception. However, if you are not in direct need, reject the delivery and set the tone for the driver and the company.
Damages and other credits
Assign an area by the receiving door and use old banana boxes or crates for alphabetical separation of vendor’s damages and credits. All products that are damaged or require credits will be neatly separated and containers cleaned if necessary to prevent rodent and other health issues.

Before vendors are received, all credits should be verified and counts made to insure proper credit. Credit should be received at full cost and retail and not a reduced cost and retail from the current weeks pricing, if applicable.

Proper receiving and counting
When the product arrives from the vendor, the product count needs to be verified for accuracy.
Improper Check in: “Hey Joe, I have ten to a layer and 12 trays on the rack.”
Receiver, “Ok go ahead.”
Proper Check in: “Hey Joe, I have ten to a layer and 12 trays on the rack.”
Receiver, “Hang on there, let me count what’s on each tray and check to be sure that it is the right product and quantity.”

Rotate receivers
All of us develop relationships with people over a period of time and we tend to offer favoritism to those we begin to know and trust. Rotation of receivers can identify problem vendors and prevent collusion or fraud.

Vendor violation tracking
Keep a list of each infraction a vendor has; shortages, unauthorized items, etc. Some companies go as far as fining the vendors for each infraction. Keep track of those vendors and more specifically those drivers that have violations. Look for patterns, report drivers and request a new route person or threaten fines if the track record continues. Use this violation list in conjunction with the receiver rotations to discover problem receivers. If receiver “A” never has infractions on a vendor, but receiver “B” always has infractions, you may want to audit receiver “A” from a distance to insure your procedures are being followed. Camera systems can offer a great tool to watch receivers and insure they follow policy when they do not know someone is watching.