Dock to Stock- Understand & Improve Dock to Stock Processes

Most new eCommerce retailers are confronted with the dilemma of receiving inventory. This is because inventory receipt is a methodical process requiring set docking space, personnel, and equipment. And without proper knowledge, it can be quite a hassle. This article explains how dock-to-stock works for eCommerce businesses new to the arena. 

Dock-to-Stock: Transitioning Finished Goods to Inventory 

In eCommerce logistics, dock to stock (DTS) indicates the process of receiving inventory at the warehouse loading dock and stockpiling it in the storage sites. This is a regular process in every logistics center, from distribution hubs to fulfillment centers.

Dock-to-stock is a critical stage in the inbound logistics system. This initial phase of merchandise receipt and storage decides the information flows throughout the warehouse. It impacts the later stages of the warehouse functions, including where and how inventory is stored and how items are picked and packed.

Dock-to-stock is a major determinant of operational costs and lead time in the warehouse or the fulfillment center. This is because goods are received in these facilities round the clock for all the companies renting their space. Since the loading docks are limited in their space and capacity to hold goods, it has a high risk of congestion. 

Warehouses have to be very careful in how to manage the loading docks. The faster the docks are cleared, the greater the chance of receiving the next batch of goods, reducing inbound shipment wait times. It also results in less disorganization and lower chances of shipment delays. 

The 4 Stages of a Dock-to-Stock Cycle

A typical dock-to-stock cycle has four stages revolving around the receipt of products in the logistics facility and storing them as inventory in the appropriate storage systems.

1) Stock Receipt

This is the first phase of the dock to the stock system, whereby the warehouse accepts the incoming cargo or merchandise. The unloading takes place in the dock where the freight vehicle, usually a truck, is parked at the dock terminal in reverse. Here, the warehouse staff unloads the cargo. 

It is a time-consuming and strenuous process that may require equipment for lifting heavy-weight cargo or large volumes of goods. Therefore, the warehouse staff has to prepare forklifts, pallet jackets, or even small vans to transport the cargo from the dock to the storage racks.  

Inventory receipt requires a coordinated effort between the supplier or the vendor and the warehouse. Proper documentation is required, like a Warehouse Receiving an Order (WRO) or a Bill of Lading (BOL). These legal forms contain the details of the shipment, including the merchandise quantity, type, and shipping destination. 

Prior to even the goods being shipped, the retailer has to decide the quantity of the items, the number of containers, and packaging specifications. This helps the warehouse manager plan ahead for receiving the goods, including estimating the availability of dock space and handling equipment. 

2) Inventory Inspection 

Once the inventory lands in the dock area, the warehouse staff then proceeds to check and validate the contents of each shipment. This phase is extremely important in ensuring accurate inventory levels match the bill of lading details. 

The assessment involves tracing the purchase order receipt and ensuring the following:-

• The quantity and type of shipments, whether they are merchandise, returned products, small parcels, documents, or heavy items.
• The intactness of the seal and product codes, like the Universal product code.
• The overall condition of the merchandise after its arrival. 

Once the status of the goods matches the content of the BOL or WRO, they are taken from the loading dock area. To ease the strain of manual inspection, many warehouses nowadays use inventory scanner systems. Others use RFID technology that can track pallets and sort them quickly.

3) Stock Update and Record 

Once the verification and validation phases are completed, the next task in the DTS system is to store inventory and update the stock levels. Inventories can arrive partially, so recording inventory counts and assigning SKU (stock-keeping unit) numbers become all the more crucial. 

Normally, SKU numbers are internally generated within the warehouse and recorded in its warehouse management system. Doing so helps the company and the fulfillment facility keep track of stocks in every inbound and outbound logistics journey. Therefore, having a WMS for stock keeping, alerting for stockouts, and tracking goods becomes necessary. 

4) Inventory Storage 

This is the final stage in the dock-to-stock system, whereby all the goods are sorted, accounted and organized in the warehouse’s storage locations. A warehouse can have multiple storage systems, like static shelves for lightweight merchandise that requires frequent replenishment. Otherwise, there are multi-tier racking, pallet racking, and mobile shelves. 

When inventory is placed on their proper shelves, bins, totes, or cartons, it concludes the dock-to-stock for that batch of goods. 

What is Dock-to-Stock Cycle Time?

The dock-to-stock cycle records the time required to unload the merchandise, inspect it and store it in the locations ready to be picked. It estimates the time between the arrival of the vehicle carrying the goods and the organization of the inventory in the storage bins or shelves. 

Usually, the dock-to-stock time can vary anywhere between 2 hours for small businesses to 72 hours for large enterprises.  It is absolutely critical to improve the cycle time to enhance warehouse efficiency and hasten order fulfillment or inventory distribution. 

5 Ways to Reduce Dock-to-Stock Cycle Time

Below we describe some of the best ways retailers and warehouses can speed up the dock-to-stock cycle time:

1) Optimize Handling 

One of the factors causing lengthy time in the DTS cycle is the merchandise handling process. So an optimized design can reduce the distance between the dock and the shelves, reducing the time needed to shelf the merchandise.

One way to optimize handling is to restructure the warehouse floor plan. For example,  the shelves storing frequently reordered inventory reorder can be placed at the forefront or nearest to the loading docks. 

Similarly, implementing the optimal warehousing layout can help prevent bottlenecking and designate a reception space for inspecting goods. Retailers shipping high-volume goods can enact the I-shaped warehouse layout for easy order receipt and dispatch. Thus, having the right design can help optimize the shipment handling process.

2) Replace Paper with EDI

Eliminating or reducing paperwork with mobile technology or EDI (electronic data interchange) systems can reduce the DTS cycle and costs. EDI facilitates exchanges of information between two digital platforms, thereby the time spent waiting for vendor documents diminished. 

The warehouse can be informed in advance about the arrival of a new batch of merchandise by vendors. With prior intimation, the fulfillment center can clear dock space and ready the equipment for handling the cargo.

3) Set up Vendor Compliance Policies

Setting up vendor compliance policies helps significantly uplift DTS cycle  time by enabling cross-docking. In this system, the goods are moved directly to the pack stations since vendors assure their quality and quantity. Cross docking is especially helpful in replenishing back-ordered items or fulfillment orders in cases of a delay. 

The vendor's compliance policies can include measures like correct labeling in the carton, product specification sheet, and cross-border paperwork. 

4) Invest in Automation and Dock Design 

Logistics experts believe that the next stage in warehouse advancement lies in automation, especially with autonomous mobile robots. These self-driving machines move inventory from the dock site to warehouse shelves or racks.  There are automated storage and retrieval systems that can pick and shelf goods without manual guidance.

Investing in automation will reduce the chances of disorganization and accidents. It will also speed up the downtime process in relaying inventory to its proper space. Moreover, implementing IoT systems like a barcode or RFID tag reader can make the process of shipment verification faster and more reliable.

5) Coordinate with Third-Party Logistics Providers (3PLs) 

eCommerce businesses wanting to upscale their inventory receipt and order fulfillment process can coordinate with 3PLs. 3PLs specializes in receiving cargo and managing inventory. They generally have two or more docks to receive inventory and ship parcels. This allows businesses to receive larger purchasing orders at a single time.

Moreover, 3PLs have in-house quality control, inspection, and stock counting capabilities. A 3PL works to accurately document and store the merchandise in its storage systems. 3PLs can thus help businesses streamline their DTS operations alongside end-to-end inventory tracking.

Conclusion 

Dock-to-stock is an important juncture in the inbound segment of the supply chain. It is in this stage that the products created in the production center truly become inventory meant for consumer consumption. 

The dock-to-stock is a critical phase in inbound logistics that completes the process of inventory receipt and storage. These two phases, in turn, determine the efficacy of the order fulfillment process and, finally, the shipping time of parcels. With an efficient dock-to-stock system in place, businesses can dispatch shipments faster and satisfy customers. 

FAQs

1) What is cross-docking in dock-to-stock?

Cross-docking is a procedure whereby the inbound shipments are received at one end of the dockyard and handed over to outbound trucks at the adjacent end.  It eliminates the need to store inventory. It is usually used in cases of consolidating orders or splitting larger shipments into smaller ones. 

2) Why is dock-to-stock important in online retail?

Dock-to-stock handles the essential task of receiving merchandise from suppliers and producers, inspecting goods for damage, and storing it in the appropriate storage spaces. It, thus, sets the pace for the right order fulfillment procedure, from picking the goods to preparing them for shipping.