Compliance Networks - Improving Supply Chain Performance
  • How Blind ASN Carton Receiving Creates Lost Sales and Excess Inventory

    329 views 6 months ago
    Greg Holder, CEO of Compliance Networks, explains how blind receiving of cartons via ASNs creates inventory stock outs, excess inventory and lost sales.

    Supply Chain Visibility | Supplier Performance Improvement | Vendor Compliance Management www.compliancenetworks.com




    in order to dive a little bit deeper we thought it would be good to discuss just a common carton audit process most retailers will employ they have an RF scanner they scan the barcode the
    barcode scanner will know what the contents of the carton are supposed to be so at that point all they have to do is unpack the carton and each item that's in the card read back the curtain
    seal it and put it away what you see on this next screen is an example of an audit for this particular audit there are five UPC's involved so you see this UPC and column one the ASM quantity so
    this is the quantity that the vendor told us was actually in the curtain then you see the scam quantity and that was what asked and at the time of audit in the retail distribution center heirs of the difference between the scam quantity and the ASM quantity in the common is the type of error that existed so if we look at first qpc we see that the ASN corner do is 0 so the scanner scanned three items that were not on ASM the comments there is it unexpected the next line everything is fine in quantity was equal to the ASM quantity both three the third line down the ASN quantity is three and the scan quantity is 2 so the error is 1 and I'm short the fourth line down there one over and then finally and the left line the SN quantity is three the scan quantity is 0 this is a example of the UPC that was not shipped so ksn had for you pcs on it the audit at for you pcs but there were five in the results of the audit because it included UPC that wasn't shift and it included a UPC that was unexpected we're going to use this carton to try and demonstrate how that can affect the inventory at a store location the ASN quantity is the quantities that the retailer will book into inventory and this becomes an issue because the scan quantity is going to be what they'regoing to put on their shelves and we're gonna pretend that in this example the inventory system is identical to the physical items in this store so there's the arrive into the first one there's two of each of the other the blind receiving environment the retailer will book the items on ASM so the new system count in the retailer's inventory will just add those items to the system account that was previously there so for the last four items the inventory system that the retailer thinks that there's five each in stock at the store but when that carton actually arrived at the store in the store clerk but what was actually in the carton on the shelf this is simply the scan quantity that we demonstrated earlier from the RF so it
    will simply take the physical inventory and add that to the actual quantity that was in the carton and now we see
    physically what it's in the store notice
    because of the inaccurate curtain
    contents the system inventory now does
    not match the inventory that's
    physically on the shelf so one thing to
    note in the retail environment retailers
    use a simple process called over points
    and order levels so an order point is
    the point that when a system inventory
    gets down to that order point then it
    will automatically generate an order
    level to replenish that inventory back
    to where the order level should be and
    so an example of I'm going to order now
    when my imager gets down to two in the
    case of the order point and I'm going to
    order three items to get back to an
    inventory level that's acceptable let's
    assume you sold every one of the items
    that we physically had in stock our new
    store physical inventory is now zero but
    our new system inventory is not the zero
    item one the system inventory is
    negative
    meaning they sold three things that
    didn't exist line three notice that the
    system inventory is still one find for
    system inventory for that item is minus
    one and then a system inventory for the
    final item is three show deliver these
    possible impacts to the business because
    of this state if you look at the middle
    line a system thinks that there's one
    still there they cannot fill that one
    because that one does not exist or the
    final items the system thinks that
    there's three units in stock there so
    that's what's called ghost inventory if
    you keep in mind the order points worth
    - well in the cases the blue the syste Show less
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