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NIOS Class 10 Warehouse Principles & Inventory Management Chapter 7 Process Involved in Shipment of Goods
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Process Involved in Shipment of Goods
Chapter: 7
Intext Questions 7.1
(i) The goods received need to be physically moved and stored at the storage location. This process is called as__________.
Ans: Put away process.
(ii) Abbreviate SKUs ____________.
Ans: Stock keeping units.
(iii) Expand RFID———————.
Ans: Radio Frequency Identification.
(iv) __________is an important document evidencing receipt of the material at the warehouse.
Ans: Goods Receipt Note.
Intext Questions 7.2
(i) ——— is the electronic interchange of business information using a standardised format.
Ans: Electronic data interchange.
(ii) ASN tells the third party or the buyer that their goods are on the way (True/False).
Ans: True.
(iii) _________________are typically transmitted in EDI format.
Ans: Advanced shipment notice (ASN).
(iv) EDI software creates an electronic version of the purchase order and transmits it automatically to the supplier. (True/false)
Ans: True.
Intext Questions 7.3
(i) A__________represents an individual billing document.
Ans: Invoice list.
(ii) Invoice list consists of ______________.
Ans: Document header and document items.
(iii) A bill refers to a document of sale wherein customers pay immediately (True/false).
Ans: True.
(iv) An invoice is a document which is prepared by a buyer after sending the goods (True/false).
Ans: False.
Intext Questions 7.4
(i) An ___________ is an electronic data interchange (EDI) message sent from the shipper to the receiver prior to the departure of the shipment from the shipper’s facility(Advanced shipment notice, Invoice list, GRN).
Ans: Advanced shipment notice.
(ii) Which of the following statements best describes an example of advance ship notice?
(a) A person who handles international shipping documentation and transportation requirements.
(b) A fee for material held at port longer than the standard unloading time.
(c) A listing of the items included in an overseas shipment.
(d) An electronic data interchange communication indicating that an order has left the port of loading.
Ans: (d) An electronic data interchange communication indicating that an order has left the port of loading.
(iii) ASN will be used to reconcile ordered quantities against quantities delivered (True/ false).
Ans: True.
(iv) Advanced shipping notice process benefits both buyers and sellers by providing multiple points wherein mistakes can be found (True/false).
Ans: True.
Intext Questions 7.5
(i) ASNs increase dispatch and in-transit times so orders are completed (True/ false).
Ans: False.
(ii) Whether ASN helps in Product tracking? (Yes/ No).
Ans: Yes.
(iii) ASN allows the transparent flow if information from the supplier to the receiver about the incoming consignment with approximate date and time of arrival (True/ false).
Ans: True.
(iv) ASN simple yet powerful tool to reduce the customer service efforts and highly recommended for all progressive and professional companies. (True/ false).
Ans: True.
Intext Questions 7.6
(i) RFIDs and barcode scanning are the core participants for the ASN system to work effectively. (True/False).
Ans: True.
(ii) ASN increases the supply chain visibility (True/false).
Ans: True.
(iii) ASN needs less investment (True/false).
Ans: False.
(iv) What are the major challenges of ASN?
Ans: The major challenges with ASN are item quantity mismatch due to inaccuracies in the data will lead to unexpected delays, lost productivity.
| Terminal Exercise |
1. What are the stages involved in receipt of goods?
Ans: Following are the various steps/stages in the receiving process:
(i) Pre- receiving: To ease the receiving process, overall companies enforce receiving requirements for suppliers and carriers. The intent is receiving cargo in such a manner that it is quick and easy to process.
(ii) Verification of Documents: When the driver reports to the warehouse, he first reports with a certain set of documents. The transport document verification process ensures that the cargo being unloaded is meant for this warehouse and is carrying complete and original documents for the next steps to follow.
(iii) Unloading of material: The objective of the unloading process is to unload cargo safely and efficiently.
This process includes:
(a) Checking seals of the vehicle.
(b) Validating the PO number of booking reverence.
(c) Checking temperature data in case of perishable goods.
(iv) Physical verification of material: The next step in the receiving process is to conduct a standard verification process that includes:
(a) Checking of quantity received.
(b) Description of goods.
(c) Product code.
(d) Batch/Lot number.
(e) Temperature in case of temperature-controlled cargo.
(v) Inspection of Quality of material: Quality of the material is critical for both customer experience and manufacturing process. When the finished goods are delivered to the final customer no company can afford a damaged or defective product.
The inspection of the material at the warehouse involves following steps:
(a) Visual inspection of goods to check for any damage, leaks of the incoming products. In case of packaged products to check if the packaging is proper and not mutilated.
(b) In case the products are received in large numbers, random samples may be drawn.
(vi) Issue of Warehouse Receipt- GRN: Goods Receipt Note (GRN) is an important document evidencing receipt of the material at the warehouse. It is issued by the warehouse confirming the SKU and quantity received. It is generally done against the purchase order issued to a supplier. GRN is used by the Purchase department to keep a tab of quantity received against each PO issued by them.
(vii) Physical Put-away to storage location: The goods received need to be physically moved and stored at the storage location. This process is called Put- away process. On the receipt of the material a Put-away list is created for listing the number of SKU and their quantity to be stored. The Put-away list also carries the storage location where the material needs to be stored.
(viii) Exception Management: As discussed, the receiving process is the key to efficiency and productivity of the warehouse. Any exception to this process needs to be dealt with on an immediate basis.
The various kinds of exceptions which could happen during the process:
(a) Material arriving without an ASN.
(b) Neither the incoming vehicle nor carrying the complete set of documents.
2. What is ASN?
Ans: Advanced shipment notice (ASN) is typically transmitted in EDI format. Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardised format; a process which allows one company to send information to another company electronically rather than with paper. This tells the third party or the buyer that their goods are on the way.
3. What is meant by invoice list?
Ans: An invoice is a document which is prepared by a seller after sending the goods. It states the quantity of goods and the amount to be paid by the purchaser.
4. Draw the flowchart of the ASN process.
Ans:
5. List down the general items found in ASN.
Ans: ASN would generally include the following:
(i) Delivery date and time.
(ii) Order information.
(iii) Location information.
(iv) Freight information.
(v) Pallet codes.
(vi) Physical details of the consignment.
(vii) Product details.
6. How is the Goods Receipt Note issued?
Ans: Goods Receipt Note (GRN) is an important document evidencing receipt of the material at the warehouse. It is issued by the warehouse confirming the SKU and quantity received. It is generally done against the purchase order issued to a supplier. GRN is used by the Purchase department to keep a tab of quantity received against each PO issued by them.
These days, GRN is done using computers in the accounting or ERP packages. GRN in the computer system updated the inventory ledger and created a payable in the supplier ledger.
7. Write down the importance of ASN?
Ans: The following are some of the advantages/importance of ASN:
(i) Receiving Certainty: ASN allows the transparent flow of information from the supplier to the receiver about the incoming consignment with approximate date and time of arrival. Many companies have configured ASN capabilities in their ERP system which allows an automated ASN with carrier and cargo details that is sent at the time of manifesting and lets the client know the order is on its way.
(ii) Real Time tracking: In case the incoming shipment is critical and urgently required, the receiver can track the shipment using the details of the carrier and their URL. They can also directly get in touch with the carrier and get the real time status of the shipment.
(iii) Dispatch Planning: Once the receiver knows the quantity and date of the incoming shipment, he can use this information for his own dispatch planning. He can inform the sales team and pick up orders for that quantity. He can inform and plan for his own outbound deliveries.
(vi) Better customer service: Receipt of ASN significantly reduced the calls from the receiver to the sender’s customer service department. The receiver knows that the shipment has been executed and on its way. The receiver can track through the carrier’s URL and need not bother the sender for tracking details. In case of any delays, the receiver can take appropriate actions and mitigate risks.
(v) Improved Relationships: A professional, on-time and accurate ASN improves the brand image of the sending company with the receiving company. The client will receive the impression that the supplier is proactive, transparent, helpful and technologically savvy. This can help cement the relationship and drive future sales.
(vi) Potential sales or other communication opportunities: An ASN can be set up to include an attachment which could contain additional information beside regular information. This may include information about the product or new launches and impending shut downs or any other information relevant to the buyer.
8. Explain the challenges of Advanced Shipment Notice?
Ans: Even though ASN increases the supply chain visibility and offers multi-functional utility there are some challenges for the adoption of ASN:
(i) Huge investment There are certain investments that a company needs to make to get the ASN system implemented. RFIDs and barcode scanning are the core participants for the ASN system to work effectively. Hence huge capital is needed the bigger suppliers and businesses adopt ASN before the smaller firms.
(ii) Problems in accuracy The major challenges with ASN are item quantity mismatch due to inaccuracies in the data will lead to unexpected delays, lost productivity, etc. Once the error is noticed, the client can intimate the vendor about it. Once this is done, the entire process has to be followed again, with rectified figures and resending the corrected ASN.
(a) Vendors may not be ready to implement an Electronic Data Interchange (EDI) ASN due to technical limitations.
(b) ASNs should be tied to data from original EDI purchase orders. “Standalone ASNs” have been tried and provide limited success due to data errors.
9. Explain in detail about the ASN process, importance and challenges in ASN.
Ans: The following are the process of ASN:
(i) The supplier receives a purchase order that requires the creation of a shipment authorization.
(ii) When the order ships, the supplier sends the advanced shipping notice to the buyer.
(iii) The ASN is verified, usually through a receiving open interface (a tool used to make receiving items into inventory more efficient). This is a critical step in the process. If no errors are found, the inventory is updated. If errors are discovered, the purchaser can notify the seller so that a corrected ASN can be generated.
(iv) Products arrive at the warehouse or facility. The ASN can be used to create receipts for the items received.
(v) During the receiving process, the ASN will be used to reconcile ordered quantities against quantities delivered. If there’s a discrepancy, the seller will be notified so adjustments and corrections can be made.
The following are some of the advantages/importance of ASN:
(i) Receiving Certainty: ASN allows the transparent flow of information from the supplier to the receiver about the incoming consignment with approximate date and time of arrival. Many companies have configured ASN capabilities in their ERP system which allows an automated ASN with carrier and cargo details that is sent at the time of manifesting and lets the client know the order is on its way.
(ii) Real Time tracking: In case the incoming shipment is critical and urgently required, the receiver can track the shipment using the details of the carrier and their URL. They can also directly get in touch with the carrier and get the real time status of the shipment.
(iii) Dispatch Planning: Once the receiver knows the quantity and date of the incoming shipment, he can use this information for his own dispatch planning. He can inform the sales team and pick up orders for that quantity. He can inform and plan for his own outbound deliveries.
(vi) Better customer service: Receipt of ASN significantly reduced the calls from the receiver to the sender’s customer service department. The receiver knows that the shipment has been executed and on its way. The receiver can track through the carrier’s URL and need not bother the sender for tracking details. In case of any delays, the receiver can take appropriate actions and mitigate risks.
(v) Improved Relationships: A professional, on-time and accurate ASN improves the brand image of the sending company with the receiving company. The client will receive the impression that the supplier is proactive, transparent, helpful and technologically savvy. This can help cement the relationship and drive future sales.
(vi) Potential sales or other communication opportunities: An ASN can be set up to include an attachment which could contain additional information beside regular information. This may include information about the product or new launches and impending shut downs or any other information relevant to the buyer.
Following are the challenges of Advanced Shipment Notice:
(i) Huge investment There are certain investments that a company needs to make to get the ASN system implemented. RFIDs and barcode scanning are the core participants for the ASN system to work effectively. Hence huge capital is needed the bigger suppliers and businesses adopt ASN before the smaller firms.
(ii) Problems in accuracy The major challenges with ASN are item quantity mismatch due to inaccuracies in the data will lead to unexpected delays, lost productivity, etc. Once the error is noticed, the client can intimate the vendor about it. Once this is done, the entire process has to be followed again, with rectified figures and resending the corrected ASN.
(a) Vendors may not be ready to implement an Electronic Data Interchange (EDI) ASN due to technical limitations.
(b) ASNs should be tied to data from original EDI purchase orders. “Standalone ASNs” have been tried and provide limited success due to data errors.
