Receipts and inspections

A warehouse receipt is the physical acceptance of goods in the warehouse. A receipt registers
information such as the quantity of the goods, receipt date, packing slip data and inspection
data.
Warehouse inspections are carried out for both incoming goods and outgoing goods.
The inbound inspection procedure is one of the main warehousing procedures in LN. You can
add the inspection procedure to a warehousing procedure if the setup for the warehouse,
supplier, or item requires item inspection. An outbound inspection is an activity of
the warehousing order type that is linked to a warehouse order.
The inspections are carried out at an inspection location. Inspections can be carried out for
these order origins:
 Sales (Manual)
 Service (Manual)
 Maintenance Sales (Manual)
 Maintenance Work (Manual)
 JSC Production (Manual)
 ASC Production (Manual)
 Transfer (Manual)
 Project (Manual)
 Purchase (Manual)
 Receipt and inspection procedure
Inbound management ensures that received goods are stored in a warehouse that includes
receipt and the inspection procedures. During the inbound process, you can flexibly define,
adjust and carry out various activities.
 Warehouse inspections and order origin
LN provides flexibility in setting up inbound inspections. For example, you can specify that
inbound inspections are carried out for specific types of warehousing orders by adding the
warehouse inspections activity to the required warehousing order types and the applicable
order origins of the warehousing orders.
 Warehousing inspections
If the inspection procedure is implemented, LN creates an inspection record in the Warehouse
Inspections Overview (whinh3122m000) session after the receipt is confirmed, the inbound
advice is put away, or the storage list is confirmed. The user can then specify the inspection
results and process the inspection.
When performing an inbound warehouse inspection, items can be approved, rejected,
scrapped, or destroyed. Depending on the parameter setup, rejected items are removed from
inventory or sent to quarantine for further handling.
 Advance Shipment Notice (ASN)
An advance shipment notice is a notification that a shipment has been sent. Advanced
shipment notices are sent and received through Electronic Data Interchange (EDI). You can
receive advance shipment notices from your supplier informing you that goods are to arrive at
your warehouse, or you can send advance shipment notices to your customers that their
ordered goods are about to be delivered.
 Goods Received Note
A goods received note lists the expected items and their quantities. On a goods received note
you can note the item quantities to be received at the warehouse and compare these with the
receiving documents provided by the supplier.
 Receipt of goods
When receipts are created, they must be confirmed before the goods are stored in the
warehouse. You can perform the receipt of goods for the following types of records:
 Advance shipment notices (ASNs)
 ASN lines
 Expected orders
 Expected order lines
 Handling units
 Loads and shipments
Receiving of Materials
In small and medium-sized manufacturing concerns, the receipt and inspection of materials
are performed by the stores department or the storekeeper.
However, in large manufacturing companies, a receiving department is usually set up.
The receiving department performs the following functions:
(i) Receives, unloads, and unpacks materials.
(ii) Checks whether packages and their contents are intact.
(iii) Verifies the quality, quantity, and other features of materials, ensuring they are consistent
with the purchase order.
(iv) Segregates defective materials from the lot by comparing the delivery note sent by the
supplier to the copy of the purchase order. Any shortage or breakage of material is indicated
along with the acknowledgment sent to the supplier for the receipt of material.
(v) Passes on materials from the receiving clerk to the inspector for a thorough inspection of
the materials received.
(vi) Prepares the goods received note showing the details of the materials received.
Inspection Note
When the receiving department within an organization receives materials, the materials are
unpacked and compared to the materials listed in the purchase order.
If the materials are found to be in order, they are sent to the inspector for quality inspection.
In turn, if the quality of the materials is acceptable, the inspector will prepare an inspection
note to certify the quality.
Specimen/Format of Inspection Note
A specimen of the inspection note is given below.

Rejection Note
If the materials received are not consistent with the purchase order, or if they are deemed
unfit for use, the inspecting staff rejects them for return to the supplier. For this purpose, a
document known as a rejection note is prepared.
Specimen/Format of Rejection Note
A specimen of the rejection note is given below.
Material Receipts Book
This is the main book used for the purpose of store accounting. It keeps a date-wise record of
the materials received in the stores. The material receipts book provides the following
information:
 Name and address of the supplier
 Mode of transport
 Vehicle number
 Carrier's note number, date, and number of packages
 Brief description of materials
 Daily receipt voucher number (DRV No.) and date
 Stock ledger folio
Specimen/Format of Material Receipts Book
A specimen of the material receipts book is given below.
Materials Received Note or Goods Received Note
Some manufacturing concerns prefer to keep a loose card known as a materials received
note (or a goods received note). This note is serially numbered and dated, and it avoids the
use of the material receipts book.
The materials received note also replaces the daily receipt voucher.
Although the materials received note avoids the use of the material receipts book, it is
advisable to maintain this book since it is a prime book of store accounting and provides
useful information.
Normally, five copies of the materials received note are sent to the purchasing department,
accounting department, stores department, and the department that initiated the purchase
requisition.
The last copy is kept by the receiving department for future reference.
Specimen/Format of Materials Received Note
A specimen of the materials received note is given below.

Damage/Shortage/Excess Report
This report is prepared by the receiving section of the stores department. It is prepared after
packages are opened and the comparison of actual materials received and materials ordered
commences.
Payment to the supplier must be adjusted according to this document. The proforma of this
report is as follows:

EXPEDITING PROCESS – CHASING THE SUPPLIER WHEN THINGS

GO WRONG
Does it matter which people from your organization chase parts from suppliers?
During the purchasing process one of the common tasks to be completed is the delivery
schedule – typically this will be outlined during the quotation phase and confirmed at time of
order placement. This is usually in the form of an agreed lead time – i.e. 3 weeks – or a
specified date/time.
The expediting process refers to the procurement organization contacting the supplier for
either updates on the delivery schedule or to reassess the schedule based on issues with the
supply of parts.
The challenge for this process and one which is a common issue is who actually chases the
supplier. In many cases this will typically be the buyer that raises the order – they may have a
regular process where they reconfirm the order book or a specific order.
Where there are many stakeholders relying on delivery – in a manufacturing organization for
example – there may be a temptation for everyone to get involved in this process where the
part becomes critical – or is late enough to hold up production.
Where problems occur with delivery a supplier could find themselves hastened multiple times
from buyers up to management. This does cause some issues – take for example a supplier
that is supplying multiple products to different manufacturing cells and they are experiencing
production problems impacting delivery– where they are expedited from different sources
they are unable to prioritize which can result in further issues and delays and more
frustration.
In many cases the buyer is divorced from the manufacturing line and therefore doesn’t have
sufficient information to prioritize – this requires a formal communication method to mitigate
the problem which the buyer must adhere to before agreeing to a revised delivery schedule.
Where problems continue and poor performance becomes an issue with a supplier then a
suitable member of the management team should become involved (often the procurement
functional lead). Ensuring this is adhered to can also alert management to the need to kick off
formal supplier improvement initiatives.