Workplace Assignment 2: Receiving stock in a distribution centre.

2.1.1) Housekeeping policies and procedures:

Cleanliness Standards:

• Maintain a clean and organized work environment at all times.

• Regularly sweep, mop, and clean all common areas and workspaces.

Waste Disposal:

• Dispose of waste properly in designated bins.

• Implement recycling programs for applicable materials.

Storage Areas:

• Ensure proper storage of goods to prevent clutter and obstructions.

• Clearly label storage areas for efficient retrieval.
• Safety Measures:
• Regularly inspect and maintain equipment to prevent spills or leaks.
• Implement proper signage for potential hazards.

Personal Responsibility:

• Encourage employees to keep their workstations tidy and organized.

• Report any spills or potential hazards promptly.
• Scheduled Cleaning:
• Establish a regular cleaning schedule for various areas within the distribution center.
• Include detailed cleaning procedures for machinery and equipment.
• Emergency Procedures:
• Train employees on emergency evacuation routes and procedures.
• Ensure that emergency exits are always accessible and clearly marked.

Sanitization:

• Implement a routine sanitization process, especially in shared spaces and high-touch

areas.
• Provide appropriate cleaning supplies for employees to use.
• Quality Control:
• Conduct regular inspections to ensure compliance with housekeeping standards.
• Address and rectify any non-compliance issues promptly.

Training and Communication:

• Provide training on housekeeping policies during employee onboarding.
• Maintain open communication channels for reporting concerns or suggestions.
• Equipment Maintenance:
• Regularly service and maintain cleaning equipment to ensure optimal functionality.
• Clearly document maintenance schedules and procedures.
• Documentation:
 • Keep records of cleaning schedules, inspections, and any incidents related to housekeeping.
• Regularly review and update policies to reflect changes or improvements.

2.1.2) The process of receiving stock in a distribution centre typically involves several steps. Below is
a simplified explanation:

Receiving Notification:

• Upon arrival of goods, the distribution centre receives a notification or shipping advice from
the supplier or transportation company.

Inspection:
• Goods undergo inspection to ensure they match the details provided in the shipping
documents.
• Quality and quantity checks are performed.

Documentation:

Key documents involved in this process include:

• Purchase Order (PO): The initial order placed with the supplier.
• Bill of Lading (BOL): Document issued by the carrier acknowledging receipt of goods.
• Goods Receipt Note (GRN): Internal document confirming physical receipt and inspection.

Data Entry:

• Information from the documents is entered into the distribution centre’s inventory
management system.
• This includes updating stock levels, recording batch/lot numbers, and any discrepancies.

Storage:

• Received goods are then allocated to appropriate storage locations within the distribution
centre.

Invoice Verification:

• The distribution centre verifies the supplier's invoice against the received goods, ensuring
accuracy in quantity and pricing.

Payment Processing:

• Once verification is complete, the accounts payable department processes payment to the
supplier based on the agreed terms.

Here's a simplified example of a Goods Receipt Note (GRN):

**Goods Receipt Note**

GRN Number: 30

Distribution Centre: Plumblink SA

Date: [03/02/2024]

DELIVERY INFORMATION:

Delivery note no.

Delivery Date: 03/02/2024

Carrier/Driver name: Elias Makakaba

SUPPLIER INFORMATION:

Supplier Name: LEGENDS PLUMBER

Supplier Address: 44 Alsatian Rd,Glen Austin, Midrand

Supplier Contact Information: (012) 550-7843

ITEM DESCRIPTION QUANTITY QUANTITY UNIT BATCH NO. PRICE

CODE RECEIVED PRICE
12345 Product A 10 10 R1000,00 BA1234 R10 000,00
6789 Product B 20 20 R390,00 LOT678 R7800,00

Received Condition:

NO DAMAGES FOUND.
2.1.3) When a variance occurs between the stock received and the stock ordered, it's crucial to
follow a well-defined process to identify, investigate, and correct the discrepancy. Here's a general
process along with the necessary documents:

Initial Identification:

• Upon receiving goods, compare the actual received quantity with the quantity specified in
the Purchase Order (PO).

Document Discrepancy:

• Create a Variance Report or Discrepancy Report highlighting the differences in quantities,

including product details, quantities ordered, and quantities received.

Investigation:

• Conduct an investigation to determine the root cause of the variance. Possible reasons
include shipping errors, mislabeling, or internal processing issues.

Communication:

• Notify relevant departments, such as purchasing, receiving, and inventory management,

about the identified variance.

Correction Actions:
 • Depending on the investigation, take corrective actions such as updating inventory records,
adjusting stock levels, or initiating returns.

Update Inventory System:

• Make necessary adjustments in the inventory management system to reflect the corrected
stock levels.

Reconciliation:

• Reconcile the updated inventory with the original purchase order and other relevant
documents.

Approval Process:
• If the correction involves financial adjustments or additional approvals, follow the
established approval process.
• Documentation of Corrections:
• Create a Corrections Report or Updated Variance Report that outlines the corrections made,
reasons for adjustments, and any additional actions taken.

Verification:

• Verify that the corrected stock levels match the actual physical inventory and that the
discrepancy has been resolved.

Here's a simplified example of a Variance Report:

VARIANCE REPORT:

Distribution Center: PLUMBLINK SA

Date: 03/02/2024

ITEM CODE DESCRIPTION QUANTITY QUANTITY VARIANCE REASON

ORDERED RECEIVED
12345 Product A 100 90 -10 Shipping Error
6789 Product B 50 55 +5 Over

Consistent documentation and timely resolution of variances are essential for maintaining accurate
inventory records and efficient distribution center operations.

2.1.4) Expiry Date Label:

• Explanation: This label is affixed to products that have a limited shelf life or expiration date.
It includes information about the date by which the product should be consumed or sold.
This is crucial for managing inventory effectively and ensuring that products are used or sold
 before reaching their expiration date. It helps prevent the distribution of expired goods,
ensuring quality and compliance with safety standards.

Quality Control Pass Label:

• Explanation: Products that undergo rigorous quality control checks after being received may
be labeled with a "Quality Control Pass" label. This label signifies that the items have met the
specified quality standards and are deemed fit for distribution. It provides a quick visual
indication to warehouse staff and other stakeholders that the products have passed the
necessary inspections, contributing to efficient inventory management and ensuring that
only high-quality goods are shipped to customers.

2.2.1) 2.2.1 Shrinkage Policy and Procedure in Receiving Area

Policy:

Objective: The receiving area is committed to minimizing and effectively addressing shrinkage to
maintain accurate inventory levels and uphold operational integrity.

Procedure:

Identification (2.2.1.1):

• Upon receipt of goods, staff will promptly inspect and verify quantities against the Purchase
Order (PO).
• Any discrepancies or signs of potential shrinkage will be documented and reported.
• Reporting (2.2.1.2):
• Staff will complete a Shrinkage Report detailing discrepancies, damages, or any irregularities
observed during the receiving process.
• This report will include product details, quantities affected, and a brief description of the
issue.

Investigation (2.2.1.3):

• The Receiving Supervisor, designated as the Shrinkage Investigator, will initiate a thorough
investigation into reported shrinkage cases.
• The investigator will examine surveillance footage, interview relevant staff, and review
documentation to determine the root cause.

Documentation (2.2.1.4):

• The Shrinkage Investigator will maintain a comprehensive record of the investigation,

including findings, actions taken, and corrective measures implemented.
• All documentation related to shrinkage incidents will be securely stored for future reference
and audit purposes.

Corrective Actions (2.2.1.5):

• Based on investigation results, appropriate corrective actions will be implemented promptly.
• Corrective measures may include retraining staff, enhancing security protocols, or improving
receiving processes to prevent future shrinkage.
• Communication (2.2.1.6):
 • The Receiving Supervisor will communicate shrinkage findings and corrective actions to
relevant stakeholders, such as inventory control, management, and security teams.

Preventive Measures (2.2.1.7):

• Implement preventive measures, such as increased security presence, enhanced employee

training, and the use of technology to deter and detect shrinkage.

Regular Audits (2.2.1.8):

• Conduct regular audits of the receiving area to proactively identify and address any potential
shrinkage issues.
• Adjust procedures based on audit findings to continually improve shrinkage prevention.

Performance Metrics (2.2.1.9):

• Establish key performance indicators (KPIs) to monitor and assess the effectiveness of
shrinkage prevention measures.
• Regularly review KPIs and adjust procedures as necessary.

Records of Stock Received into the Distribution Center:

Purchase Order (PO):

• Purpose: Document specifying the products, quantities, and terms agreed upon with the
supplier.
• Copy: Sample Purchase Order
• Bill of Lading (BOL):
• Purpose: Acknowledgment from the carrier confirming receipt of goods for transport.
• Copy: Sample Bill of Lading
• Goods Receipt Note (GRN):
• Purpose: Internal document confirming the physical receipt and inspection of goods.
• Copy: Sample Goods Receipt Note
• Inspection Reports:
• Purpose: Detailed reports on the inspection of received goods, highlighting any damages or
discrepancies.
• Copy: Sample Inspection Report
• Quality Control Certificates:
• Purpose: Documents confirming that received goods meet specified quality standards.
• Copy: Sample Quality Control Certificate
• Shipment Packaging Lists:
• Purpose: Lists detailing the contents of each shipment, aiding in the verification process.
• Copy: Sample Packaging List
• Supplier Invoices:
• Purpose: Invoices from suppliers indicating the agreed-upon prices for the received goods.
• Copy: Sample Supplier Invoice
• Variance Reports:
• Purpose: Documents highlighting any differences between the ordered and received
quantities. Etc.
2.2.3) Initiate Purchase Order (PO)

• Buyer generates a PO detailing products, quantities, and terms.

• Supplier Shipment

• Supplier sends goods with a Bill of Lading (BOL) acknowledging receipt.

• Goods Received

• Distribution Center (DC) receives goods and performs inspection.

• Generate Goods Receipt Note (GRN)

• DC creates an internal GRN confirming receipt and inspection.

• Quality Control Check

• DC conducts quality control checks if applicable.

• Generate Quality Control Certificate

• If goods pass quality control, a certificate is generated.

• Compare with Purchase Order

• DC compares received goods with details in the Purchase Order.

• Generate Variance Report

• If discrepancies exist, a Variance Report is created.

• Generate Inspection Report

• If damages or issues are found, an Inspection Report is generated.

• Supplier Invoice Received

• DC receives an invoice from the supplier.

• Generate Packaging List

• DC creates a packaging list detailing contents of the shipment.

• Record Variance Corrections

• Corrections are made based on the Variance Report.

• Record Shrinkage Incidents

• Shrinkage incidents are documented if identified.

• Generate Corrections Report

• A Corrections Report is generated to document corrective actions.

• Maintain Records

• All documents are maintained and securely stored for audit.

2.2.4) Procedure for Keeping Stock Receipt Records in the Distribution Center (DC):

Initiation of Purchase Order (PO):

• The procurement department initiates a Purchase Order (PO) specifying the products,
quantities, and terms agreed upon with the supplier.

Supplier Shipment and Bill of Lading (BOL):

• The supplier ships the goods and provides a Bill of Lading (BOL) as acknowledgment of
receipt by the carrier.

Goods Receipt and Inspection:

• The DC receives the goods and conducts a thorough inspection to ensure they match the
details in the Purchase Order.

Generation of Goods Receipt Note (GRN):

• Upon successful inspection, the DC creates a Goods Receipt Note (GRN) to internally confirm
the receipt and inspection of goods.

Quality Control Check (if applicable):

• If quality control is necessary, the DC performs additional checks to ensure the received
goods meet specified standards.
• Generation of Quality Control Certificate (if applicable):
• If the goods pass quality control, a Quality Control Certificate is generated, confirming
adherence to quality standards.

Comparison with Purchase Order:

• The DC compares the received goods with the details outlined in the Purchase Order to
identify any discrepancies.

Generation of Variance Report (if applicable):

• If discrepancies are identified, a Variance Report is generated, detailing the differences

between ordered and received quantities.

Generation of Inspection Report (if applicable):

• If damages or issues are found during inspection, an Inspection Report is generated,

outlining the problems observed.
• Receipt of Supplier Invoice:
• The DC receives an invoice from the supplier, indicating the agreed-upon prices for the
received goods.

Generation of Packaging List:

• The DC creates a packaging list, detailing the contents of the shipment to aid in the
verification process.

Recording Variance Corrections:

• Any corrections needed based on the Variance Report are promptly recorded, and
adjustments are made to the inventory system.
• Recording Shrinkage Incidents (if applicable):
• Shrinkage incidents, if identified, are documented for further investigation.