How to Improve Your Shipping and Receiving

• By Julie Sturgeon
• 11/01/01

Jerry Porter knows the stereotype: His department consists of a bunch of dumb guys on a loading dock. But as the supervisor of shipping and receiving at the University of Texas at Dallas (UT), he also realized that, when your crew works in an atmosphere of repetition, leaders need to figure ways to make the job worth doing, or boredom wins.

“So I’m always looking for some way of improving what we do,” Porter says. He started with the accounting departments’ troubles: They were overpaying bills, sending money for merchandise that was never received. When he took charge in 1989, he decided pens, paper and filing cabinets were his enemy. He went from not knowing how to turn on a computer to writing database programs in dBase III in a matter of months, all in the name of streamlining his department’s total quality management performance.

“Now if the network goes down and we can’t access the computers, my guys have a fit. They complain about logging things the old-fashioned way,” Porter laughs. For the price of software, which the university has on contract with Microsoft to buy “at a little next to nothing,” he has maintained his department with only four staffers to deliver an average of 1,100 packages weekly across the 500-acre campus.

Porter started simply, concentrating on the workflow of what comes in the back door. “Technically, a receiving department can either make or break an accounting department,” he warns. So he set up his initial database to imitate the log sheets in a sharing-friend format UT’s accountants also could tap into from their desks. A three-step verification process between receiving, purchasing and accounting did cut down on premature payments. With the data mining capabilities computers are capable of today, he also can sift through those files to maintain a “return to vendor” address that spares faculty from filling out paperwork on returns, calculate average delivery time to get a package from receiving to the academic department and pie chart individual staffers’ time spent on individual projects. The university relies on this department to regenerate purchase orders and track partial orders.

“In other words, they see an understaffed department working to improve because upper management gave us the opportunity to show off,” says Porter. Next step: bar coding, a process he wants to invest $4,000 in personal digital assistants (PDAs) to handle. Eliminating keystrokes, in his estimation, will save his team at least 1.5 hours a day now spent collectively on logging.

Shipping at Johns Hopkins

Johns Hopkins University’s Homewood campus never bothered with a centralized shipping and receiving department. Delivery trucks rumbled onto campus streets, dropping their packages to the end user. But a new campus master plan launched in spring 2000 meant construction cones to impede traffic -- and an ultimate goal of trying to quiet this institution located smack in the middle of Baltimore.

As an interim step, Director of Purchasing Paul Beyer now requires large-truck haulers -- particularly tractor trailers -- to call 48 hours in advance of a delivery. Then, someone from either Beyer’s office or campus security meets and escorts the truck to its destination to ensure drivers don’t use sidewalks and other unsafe routes along the way. (In the past, this erratic driving has been too common for Beyer’s comfort.) His long-term solution is to lease a building to serve as a distribution warehouse. Staff in microvans -- two-passenger vehicles -- will patrol regular delivery routes on campus, similar to a U.S. postal carrier’s route. “This set-up makes it more efficient for vendors to make deliveries -- they’ll be able to get in and out and on their way,” he says. “And while we’re delivering packages, we can also pick up outbound shipping items.”

Anything landing on the loading dock on any given day will be given to the end user that same day. “We don’t want things sitting around, increasing their chances of misplacement,” Beyer explains. But his few exceptions to the offloading rule make sense: shipments to residence hall cafeterias or the industrial gases for the lab departments are allowed only three scheduled days a week between 6 a.m. and 8 a.m., when pedestrian traffic is low. Vendor resistance, he reports, was slight to negligible.

Beyer, who will have to hire a staff to cover his new plan, analyzed the number of packages the campus receives in a day, extrapolated that across an annual basis, and consulted with UPS logistics to determine a number. His system means he’ll need to hire only five people to cover the 160 acres.

Internet Shipping Portals

In the name of cost savings, Beyer also investigated the new Internet shipping portals that are dedicated to helping companies of all sizes maximize outbound cargo. Such services didn’t make sense for Johns Hopkins’ needs -- outside of overnight mail packages containing paper documents, most shipping involved computers under warranty, so the vendor foots the cost -- but they deserve strong consideration whenever the campus pays.

Requesting shippers to bid on your package eliminates two headaches, says Tim Barton, CEO of Kansas-based Freightquote.com: The portal translates quotes into straight dollars, rather than the confusing language of tariffs and discounts. “Everyone uses different tariffs, so one guy who gives 60 percent off may be a better deal than the next guy promising a 70-percent savings,” he notes.

Second, the portals consolidate a university’s individual shipments into one monthly statement resembling a consumer long- distance phone bill. This eliminates the common practice of sending updated invoices. “You may get an invoice for $100 today and two weeks from now, if you haven’t paid it, the shipper sends another one for $110 because it forgot a tax or something,” Barton says. “It’s not hard to straighten out the competing invoices with the occasional shipment but, if you’re sending 20 packages a day, you’re doomed.” To date, he has worked with 20 different colleges and universities across the country, many of which are shipping chemicals and scientific equipment to or from labs.

Finally, Barton’s own research reveals that between 40 percent and 50 percent of all shipping invoices submitted are wrong. A freight auditing service charges an amount equal to half the errors they find, and the university’s accounting department is still on the hot seat to apply for its credit with the shippers. Internet portal services merely bill you the stated price, and fight those mispriced battles on their own behalf behind the scenes.