OPERATIONS - Distribution Centers

Transcription

1 A. General Warehousing/Transportation 1. Guidelines 1a. KEEP ALL GOODS ENTRUSTED TO YOUR CUSTODY WITH THE SAME DEGREE OF CARE YOU WOULD EXERCISE IF THEY WERE YOUR OWN. DO NOT ATTEMPT TO LESSEN THIS DEGREE OF CARE IN ANY WAY. 1b. Do not accept any goods for storage unless you are able to provide proper temperatures and humidity for an indefinite length of time. 1c. Know what you store. If in doubt as to the quality or condition, be certain to inspect. Above all, be sure all notifications to the customer of off condition commodities, damage, etc, are made a matter of written record Place all such notations on the carrier bill of lading and the warehouse receipt before it is issued. 1d. Keep complete records of temperatures and humidities in all refrigerated storage rooms and have it understood by all employees, making such records, they must be prepared to affirm their readings under oath, if necessary. Be sure all readings are truly indicative of room conditions: thermometers in center of room, away from coils, etc. 1e. Store all goods properly. Be sure they are off the floor, away from walls and coils, and piled to allow air to circulate through the pile, where necessary. 1f. Keep all rooms in a clean and sanitary condition at all times. 1g. Keep complete and correct records of all receipts and deliveries. In the event of court action, much will depend on the accuracy of your written records. 1h. Be sure of ownership when issuing warehouse receipts or allowing access to the goods in your custody. 1i. Never deliver any goods covered by a Negotiable Warehouse Receipt unless the receipt is in your possession. Section IV Page 1

2 B. Receiving Best Practice Objective To receive quality inbound product in an efficient and timely process. To complete the process with the optimal level of trained personnel ensuring accurate inventory records of product in wholesome condition following Millard and customer specifications. RECEIVING PROCESS FLOWCHART Customer notifies facility of inbound shipment (EDI/phone/fax or Bill of Lading) Millard traffic/scheduler desk schedules inbounds into WMS Scheduler Vehicle arrives at facility (Truck or rail) Product is Unloaded Comparison of actual receipt of product to Expected Inbound Report or Bill of Lading Product is Put away Product is received into WMS system Section IV Page 2

3 B. Receiving 1. Notification of Inbound Product The customer notifies Millard of receipt of product. 1a. Via EDI transmissions (943), product is automatically transmitted into the WMS system. 1b. Via phone or fax, the customer will notify Millard of the expected number of trucks that will be arriving at the facility. 1c. Via actual receipt of Bill of Lading from the trucker. 2. Appointment Scheduling 2a. The Traffic Desk schedules inbounds into the WMS scheduler. 2b. The Operations Manager reviews the inbound schedules and determines the optimal level of personnel needed to staff the facility and adjusts the schedules accordingly. 3. Vehicle arrives at facility Product may arrive at Millard via truck or rail. If by truck, the driver must check in with the traffic desk. 3a. Upon arrival of truck and receipt of Bill of Lading, the traffic desk will retrieve receiving information, assign lot numbers and generate a Receiving report for the checker and ensure paperwork is forwarded to dock in a timely fashion. The traffic desk will also assign a door. See Exhibit - Operations Exhibit 1. 3b. The supervisor is given a Receiving report to be used while unloading the product. 3c. The assigned checker shall ensure that the trailer is chocked before product is unloaded. Section IV Page 3

4 B. Receiving 4. Product is unloaded The assigned checker will unload the product, verify the count and condition of product and forward paperwork back to the office. 4a. Product is unloaded and segregated by product and/or date codes. 4b. Product is counted, tally recorded, and temperatures (front, middle, and back or as specified by customer) are taken. 4c. A Millard pallet identification label (bar code license) or warehouse lot number will be affixed to each pallet. 4d. Date codes and pallet identification numbers are recorded 4e. Checker verifies and documents condition of product and forwards information to CSR. i. The CSR contacts the customer of any "off-condition" product according to customer guidelines and ensures all accessorial services are completed and recorded on the Special Handling Charges form. See Exhibits- Operations: Exhibit 3. 4f. Checker completes pallet exchange according to customer guidelines. Palletized shipments must be stacked on GMA #1 and GMA #2 hardwood, 4-way pallets. i. A heavy cardboard slipsheet is recommended to be placed directly on the pallet prior to stacking cartons to reduce box fatigue on the bottom layer. ii. Box overhang on the pallets should be minimal, and less than one inch over any edge to reduce carton fatigue. 4g. Product will not be received on broken or damaged pallets. Pallets not meeting GMA #lor #2 specifications will be refused, and must be restacked by the carrier or by the warehouse (at a cost to the shipper/supplier). Note: Receiving personnel must record the wood count, including a bad pallet count on the pallet ticket. See Exhibit -Operations Exhibits 4. 4h. Completed paperwork is forwarded to the office for comparison of actual and expected inbound receipt. Paperwork also needs to include the number of good pallets. See Exhibit -Operations Exhibit 5. Section IV Page 4

5 B. Receiving 5. Comparison of actual and expected inbound 5a. The traffic desk compares the check sheet completed by the checker against the customer bill of lading or, if the product is scanned, the traffic desk will print a "Compare to Scan " report then verify the count and product codes. i. If Correct: The traffic desk prepares the proper paperwork and signs the driver's bill of lading out. Product will then be received into the proper inventory records and confirmation is sent to the Customer via EDI 944, warehouse receipt or mail. The traffic desk/customer service reps also verifies all accessorial services have been recorded and inputs the miscellaneous charge codes into the Special Charges screen under billing. ii. If Incorrect: A new count must be taken. A different checker must perform the recount. Exceptions are documented on the receipt checklist to reflect any over, short or damage (OS&D) quantities. See Exhibit -Operations Exhibit 1. The supervisor is to initial all discrepancies. Paperwork is returned to the office for comparison. Discrepancies are noted on the bill of lading and truck is signed out. The inbound report is corrected and a "Batch " sheet is run and given to the supervisor. Section IV Page 5

6 B. Receiving 6. Product Put-Away 7. Office 6a. Once the count is verified and exceptions are documented and a new batch sheet is printed. 6b. In general, product should not remain on a refrigerated dock for more than 30 minutes or a non-refrigerated dock for more than fifteen (15) minutes. i. This guideline does not apply to customer-specific handling procedures or product requiring special accessorial services. 6c. The supervisor then gives the "Put Away" sheet to the put-away lift operator and the load is then placed in the proper warehouse location. See Exhibit - Operations Exhibit 6. 6d. The specific location of the product is scanned into the system or manually recorded on proper paperwork and forwarded to the office for updating inventory records. 6e. If product is cross dock product, the product is placed in the designated area within the facility. 7a. The Office Manager/Superintendent verifies all accessorial services have been recorded. 7b. The office personnel designated by the Office manager inputs the miscellaneous charge codes into the Miscellaneous Charges screen under billing. 7c. The inbound batch is received into inventory thru WMS. 7d. Inbound information must include (but is not limited to): Temperatures Seals Arrival and departure times Pallet information Appropriate SCAC (Standard Carrier Alpha Code) OS&D condition issues Section IV Page 6

7 B. Receiving 8. Customer Invoicing C. Storage 8a. All inbounds are processed for invoicing and mailed to Corporate Accounts Receivables and customer within 24 hours of receipt. 8b. All printed non-negotiable warehouse receipts and invoices are reviewed and signed by the General Manager or Office Manager for information and billing accuracy. See Exhibit - Operations Exhibit 7 and 8. Best Practice Objective To store customer's product within proper temperature ranges utilizing good warehousing practice in compliance with Millard Food Safety Manual. 1. Temperatures 1a. Maintenance personnel monitors and records the temperatures of each room a minimum of once each day or according to the customers requirements. 1b. Temperatures are recorded on the daily temperature log or daily motor room log. See Exhibit - Operations Exhibit 9. 1c. Copies of the daily temperature logs are to be reviewed daily and maintained in a file in the General Manager's office. 2. Blast within Blast Cell 2a. The Forklift Operator will maintain a blast log recording temperatures, time in and out and temperatures within removed from blast. 2b. The blast log is submitted to the Warehouse Operations Manager daily along with the relocation sheet. See Exhibit - Operations Exhibits 10 and 11. Section IV Page 7

8 C. Storage 3. Relocations 3a. Whenever a product is moved from its original location within the facility, the new location must either be scanned into the system or manually recorded on a relocation sheet by the Forklift Operator. 3b. If manual system, the Forklift Operator must forward the relocation sheets to the Operations Manager or Inventory Control on a daily basis. 4. Damage product 4a. Damaged product must be removed from the active inventory each day. 4b. Following the Food Safety guidelines or customer requirements, personnel must properly dispose of the damaged product. 5. Sanitation D. Inventory Control 5a. All storage areas should be continually kept clean and free of debris. 5b. Management will conduct daily walk-thrus of the facility to ensure proper storage and sanitation practices are maintained. Best Practice Objective To manage customer inventory in a manner that ensures accuracy and timely reporting to our customers. 1. Cycle Counts There are various adjustments made throughout each month, but all adjustments may or may not be chargeable adjustments. Examples of Adjustments Pickface +/- Adjustments Distressed backflow +/- Misshipped product Misreceived product Lost product Found product Frequency made daily made daily as they occur as they occur once a week as it is discovered Section IV Page 8

9 D. Inventory Control 1. Cycle Counts (continued) 1a. A record of all chargeable adjustments is kept by [Inventory Control/ Superintendent] and the customer. 1b. The Inventory Control, the General Manager and the Operations Manager will review the following reports daily: $ Unassigned $ Summary Adjustment Report $ Out of Sync $ Duplicated pallet IDs $ Lost hold report Note: These reports must be kept in a binder filed in the General Manager's office and available for periodic audits. 1c. The Inventory Control clerk will print an Inventory By Level report. 1d. The Inventory Control clerk will send out the paperwork to the counters who will verify pallets and case count. 1e. The Inventory Control clerk must record all discrepancies on the printout and return the printout to the Office Manager for reconciliation. ex: Pallet IDs listed but not in the warehouse 1f. After count is complete, office/inventory control reviews and researches any discrepancies. i. 0 pallets and pallet IDs that do not show on printout are generally mispicks; these are researched to determine whether it is a true adjustment. ex: A 0 pallet may have an offsetting pallet that does not show up on the printout. In this case, no inventory adjustment is made, the pallet ID is changed to the correct number. ii. Product that is short after the cycle count is also counted in the pickface. The location may not have been changed when the pallet was dropped to the floor and the pickface may be over. Section IV Page 9

10 D. Inventory Control 1. Cycle Counts (continued): 1g. After all discrepancies have been checked and adjustments have been determined, they must be approved by the General Manager. i. The approved adjustments must be posted to the WMS systems and then forward via fax or if applicable through EDI (947) to customer. ii. Reason for the adjustment must be noted in the WMS system. 2. Refusals and Return Authorizations 2a. Before any refused or damaged product can be accepted from an outside source, a return authorization must be received from the customer and the USDA, if applicable. Product is not to be received without an authorized return notification. See Exhibit - Operations Exhibit 12. 2b. All damaged product authorized for return is to be placed on HOLD for disposition by the customer. Section IV Page 10

11 D. Inventory Control 3. OS&D Claims Claim Process Flowchart Customer generates claim Millard records claim in log Millard investigates shipment records & completes physical count (as necessary) Millard completes inventory adjustments (as necessary) Millard faxes adjustments to customer Millard sends completed claim back to Customer Claim is recorded as "complete" in log. 3a. Claim Generation i. The customer will forward written notification of an OS&D incident to the originating Millard warehouse. This information should be generated within 24 hours of delivery to consignee. ii. The OS&D Log (claim form) must include the following information: See Exhibit - Operations Exhibit 13. Ship Date P.O. number or Shipment number Item code and description Quantity shipped Claim description (Over/Short/Damaged) Disputed case-count status (kept, refused, discarded, etc.) Seal number (if load was sealed at Millard facility) iii. A copy of the Bill of Lading should also be faxed, if it is available. Section IV Page 11

12 D. Inventory Control 3. OS&D Claims (continued): 3b. Claim Recording i. Millard Inventory Control records the claim in the OS&D log and forwards to the Vice President of Customer Service to include in the Weekly OS&D Recap report. See Exhibit - Operations Exhibits 13 and 14. 3c. Claim Research i. The original order file and the stock location report for disputed item(s) will be retrieved to research over/short claims. ii. If picking/checking documents appear to be correct, the Inventory Control personnel will complete a full count (using the Stock Location Report) on the disputed item(s) to determine actual case count. 3d. Inventory Adjustments i. If the physical count shows a variance which corresponds to the claim, an adjustment is forwarded to Office Manager to process to reflect the variance. ii. If there is no physical variance, verify that no prior adjustment(s) made from the daily cycle counts, etc. have been made which may have accounted for the claim in question. iii. Adjustments must include the original P.O. or shipment number, the original ship date and the detailed reason for adjustment. iv. If the claim is for an overage and the product will be returned to the Millard facility, an adjustment must still be made to reflect the current inventory status. v. In order to offset shortages with overages, Millard must have written agreement or acknowledgement from consignee to such offset. Section IV Page 12

13 D. Inventory Control 3. OS&D Claims (continued) 3e. Adjustment Notification i. Completed adjustments are faxed to the customer. 3f. Overages i. If an overage has been shipped, the consignee may elect to keep the overage (if they normally stock this product) or return to the originating Millard facility. ii. iii. The originating Millard facility is responsible for arranging/ coordinating transportation for return product back to Millard (or another appropriate location as designated by the customer) if the inventory can not be kept at the receiving location. Millard may determine that the return shipment is more costly than the value of the product and opt to discard the product rather than return it. Overages may only be discarded with the customer's approval. 3g. Shortages i. If an order is confirmed to have shipped "short", the customer may initiate an order to fill the missing item(s). 3h. Damages i. Any claims for damaged/unrecoverable inventory must be accompanied by pictures of the damaged cases. Replacement cases may be re-ordered as listed under "Shortages" above. 3i. Claim Response i. After research is completed and all corrections/adjustments have been made, the Millard claim log is completed to record the end result. Section IV Page 13

14 D. Inventory Control 3. OS&D Claims (continued) 3i. Claim Response ii. Millard Inventory control personnel will compare claim information to verify agreement/disagreement. Each claim is noted as "Accepted" or "Denied" and must be signed by Millard warehouse management. iii. Completed response is returned to the customer with all back-up documentation. A count sheet(s), Bill of Lading(s), Original claim, adjustment(s), etc.) 3j. Turn Around Time i. The entire claim process should be completed within 7 calendar days. 3k. Returned Inventory i. Inventory that has been over-shipped and then returned to the Millard warehouse will be received back into inventory as an "Inbound Receipt." If Millard shipped the overage in error, no billing will be generated on receipt of the inbound load. Millard claim log number and general information regarding the return must be recorded in the header field of the inbound batch. ii. Proper notification must be forwarded to the customer and as appropriate to the USDA Inspector in Charge (IIC). 3l. File Maintenance i. Working files consisting of the Claim Log, Claim in Process, and Completed Claims will be kept in General Manager's office and will be available for periodic audits. ii. Standard Millard record-retention parameters will apply. Section IV Page 14

15 D. Inventory Control 4. Warehouse Damage Claims 4a. Warehouse damage will be removed from stock and put ON HOLD on a daily basis. i. Inventory Control will direct the warehouse to move the damage product to a designated damage area. 4b. Damage will be disposed as necessary for large quantities and for smaller quantities removed daily. 4c. The Customer Rep will resolve all damage disposition weekly with the customer. 4d. A damage/hold list will be maintained ongoing by Inventory Control reviews with the Customer Rep on a weekly basis 4e. Spillage from any damaged product will be cleaned up immediately. i. Any equipment used for clean up must be emptied and maintained to prevent sanitation and pest concerns. 4f. Damaged product in the HOLD area must be maintained to prevent cross contamination. 4g. Any recouping materials used in the HOLD area must be adequately segregated to prevent mixing with prime inventory. 4h. Product should not be sold, repackaged or otherwise disposed of without written authorization from the customer. See Risk Management Section for additional claim process information. Section IV Page 15

16 D. Inventory Control 5. Hold 5a. Formal Hold Procedures i. The CSR will forward all requests for placement of product on hold, as received from the customer to the Inventory Control person. All customer requests must be in writing (fax, letter or printed copy of an message). ii. Notification must include the following: $ Date product is placed on hold $ Date code $ Quantity $ Product date $ Reason for product being placed on hold $ QC status change confirmation iii iv. Once the Inventory Control person has the request, the inventory is immediately placed on "HOLD" in the system to prevent any shipping and the appropriate inventory printed to show all locations to be put on HOLD. The Inventory Control person then fills out the "ON HOLD" portion of a Hold Check sheet, except the "Rec'd labels" and "Label put on By" sections. See Exhibits- Operation: Exhibit 15. v. Either a supervisor or the Inventory Control person signs for the labels (2 for each pallet) and takes them to the warehouse along with a copy of the Hold Check sheet. vi. The person who places the "HOLD" labels on the pallets (one on the front center and one on the right center of each pallet) then signs the check sheet copy on "Labels Put on By" section and returns copy to the Inventory Control person. Section IV Page 16

17 D. Inventory Control 5. Hold 5a. Formal Hold Procedures (continued): vii. The original checksheet, the copy signed by the person placing the labels on the pallets, a printed inventory showing the product on hold and the written request form the customer are all attached and filed in a HOLD file by the customer. viii. Written notification for all request to remove HOLD should also go to the Inventory Control person. ix. Once the Inventory Control person has the request, they should retrieve the Hold Check sheet from the hold file. x. After filling in the "Authorized By" and the "Date" sections on the OFF HOLD portion of the form, a copy is given to a supervisor along with an inventory showing the locations. xi. The supervisor or designated person then removes all HOLD labels and turns them in along with the copy of the checksheet to the Inventory Control person. xii. The Inventory Control person accounts for the number of labels, signs off on receiving all labels back and disposes of the labels. xiii. The Inventory Control person then removes the system HOLD. xiv. The checksheet copy showing the product being removed from hold, a printed inventory showing no hold on the product and the removal request are all attached and placed in a "Dead Hold" file. 5b. Production Hold i. Based on Customer requirements, product is put on hold at the time of receipt in our system Product is received pending written authorization to release. 5c. Other Types of Hold i. As directed by each specific customer, there may be special hold procedures that will be included is the Customer's manual. Section IV Page 17

18 D. Inventory Control 6. Recall 6a. Recalls may be conducted at varying levels of detail and urgency as requested by the customer. 6b. Millard will receive via fax a notification for a specific product code and date codes. i. The fax recall notification should be sent to each of the following individuals: the General Manager, the Office Manager, and the designated Customer Service Rep. See Exhibits- Operation: Exhibits 16 and 17. 6c. The initial response from Millard should include: i. Number of cases received. ii. iii. iv. Current number of cases in inventory Number of cases on hold Number of cases shipped by customer ship date, product code and code date. 6d. The timing of the initial response may be: i. Two hour response required if need is specified as being urgent. ii. 24 hour response required if non-urgent. 6e. The Recall action team will consist of: i. General Manager ii. iii. iv. Office Manager Customer Service Rep Operations Manager Section IV Page 18

19 D. Inventory Control 6. Recall 6f. Product Recall Procedures NOTE: All office and warehouse order activity must stop during the recall procedures. The following procedures are to be followed in the event that Customer requests a recall for product held at our facility. i Run Lot Detail report by code date or by lot for product being recalled. ii. iii. Determine which lots are in question (by code date listed). Run "Code2" report (Stock Location) and have warehouse verify code dates. iv. If any code dates are incorrect, transfer inventory to make corrections. v. The office is responsible for placing lot and pallet IDs on "SPHLD" in the system. vi. The warehouse is responsible for tagging and segregating hold product. Run Recall Report for lots flagged for recall. vii. Run Stock Location report -- Query by Lot number to verify all PIDs have been placed on "SPHLD". viii. Fax the recall report, stock location report and the customer's faxed request to the customer's contact. ix. Keep records of turnaround time for performance recording. 6g. Mock recalls will be performed at least every six (6) months according to Millard's Food Safety Program; however, they may be performed more often at the request of a customer. i. To perform a mock recall, a lot will be chosen at random and the procedures outlined in Section 6e will be performed. ii. The results of the mock recall will be placed in the facility's Food Safety Manual and maintained for a period of three (3) years. iii. iv. If the customer requires a mock recall, the results of the recall will be distributed to the customer according to their instructions. A mock recall must be performed even if actual results have been performed in the relevant time period. Section IV Page 19

20 D. Inventory Control 7. Hold Disposition Once final disposition of HOLD product is realized and communicated in writing, the warehouse will proceed to complete one of the following: 7a. Dispose of product using the approved dump process. i. The customer may request that aged or damaged product be dumped. ii. iii. iv. The CSR will enter an "Outbound Dump and Destroy Order". Millard warehouse personnel as directed by Operations Manager will dump and destroy according to state regulations. The CSR will print out and forward a " Dump and Destroy Order Bill of Lading "to the customer. See Exhibits- Operations: Exhibit 18. v. The CSR will post final outbound order. 7b. Inventory Control person/superintendent will remove HOLD tags and return product to available inventory status ensuring that the corresponding status change is made in the warehouse system. 7c. Operations Manager/Superintendent will proceed with salvage procedures as instructed by the customer. 8. Relocations Moving and relocating products within the warehouse is an ongoing process. It is very important that this be completed correctly so that product is not lost. This will help the order pulling process and ensures warehouse space is maximized. 8a. Every pallet moved must be scanned into the new location. i. A relocation sheet must be completely filled out with the location where the product is moved from and the new location that the product has been moved to, the pallet identification number, the product number and case count. ii. This information is given to the supervisor. Section IV Page 20

21 D. Inventory Control 8. Relocations (continued): 8b. If a pallet is broken or the product is not straight, the forklift operator will straighten product or re-palletize the pallet to prevent damage to the customer's product and help the order pulling process. 8c. All bays must be swept out before putting product into the bay as well as swept when the bay is emptied. 8d. Older product is always placed in the front of the bay. Older product is never to be stored behind product that is being relocated. 8e. The Supervisor or lead person signs and dates the relocation sheet and turns the sheet into the Inventory Control as it is completed or at the end of their shift. i. This procedure applies whether relocating one pallet or several pallets. 8f. ALL AREAS MUST BE KEPT CLEAN AT ALL TIMES. 9. Physical Inventories The key to a successful inventory is preparing all the warehouse staff and office staff for accurate counts, verification of product code descriptions and code date verification in a systematic and consistent process. When conducting a physical inventory, the count and verification of actual product in warehouse is the most critical part of an inventory. The following procedures will enable Millard to provide our customers an accurate count and reconciliation of their inventory. 9a. Pre-Inventory Warehouse Procedures i. Determine what aisles contain customer's product to be counted. ii. iii. Map out each aisle in warehouse for: beginning and ending locations, rack height and rack depth. Run a current Physical Detail report. Any product showing in other aisles must be relocated to aisles that will be scanned/ counted. Section IV Page 21

22 D. Inventory Control 9. Physical Inventories 9a. Pre-Inventory Warehouse Procedures (continued): iv. Assign warehouse personnel to search the warehouse for product that may be scattered through the warehouse and move this product to aisles that will be counted. Check behind other product for hidden pallets. All product must be located in racks. Scan pallets into the new locations. v. Gather all miscellaneous cases with no Lots/PID's and place on pallets of like product and like code dates. The case count will be adjusted during inventory. vi. Obvious damage product must be pulled from pallets to avoid counting product as good product. vii. Identify all pallets without LOT/PIDs and put a LOT/PID label on it. Strict adherence to keeping LOT/PID's label on last case of the pallet must be followed at all times. This label must be placed on the bottom right front case. Record the UPC number, date code and case count. Set up an inbound for any product where we have added a new pallet identification. Section IV Page 22

23 D. Inventory Control 9. Physical Inventories (continued): 9b. Pre-inventory Office Procedures i. Review and correct both out of sync reports. ii. iii. iv. Review and correct "W" status report. Review and correct invalid location list. Review and correct unassigned PID list. v. "Ship-off" all outbound orders and uncommit expected outbounds for the specific customer taking a physical count for. vi. Receive all inbound loads for the customer. 9c. Office: Preparation for Count (Day of Inventory) i. Verify that a successful backup has been completed. If the backup was incomplete, restart backup. ii. iii. iv. Print an unassigned list. Hand-key all unassigned PID's into one valid location, making sure the location is in an aisle that will be counted. Print a lost hold and damage list. Remove all product from lost and damage hold for customer. v. Print two copies of the Stock Summary report. this report will give the "before" inventory totals. This is the beginning inventory count. If the On-hand and Available columns do not match, there is a problem (probably out of sync lots). vi. Print Current Stock by Location report. This provides the location of product before inventory. Compare On-Hand totals to On-Hand totals on Stock Summary report. If they do not match,you have a problem (Probably PIDs out of sync). Section IV Page 23

24 D. Inventory Control 9. Physical Inventories (continued): 9c. Office: Preparation for Count (Day of Inventory) vii. Print Lot Detail Report. Compare the On-Hand totals with the Stock Summary and Stock Location reports. If the On-Hand totals on all three reports do not match, you have a problem. [Probably PIDs out of sync] viii. Print a Detail Physical Report (2 blind copies: one copy will be the "A" count and the other a "B" count sheet. [WMS screens: Inventory Physical Worksheets Detail Physical Report] ix. Print additional reports that are requested by the customer. 9d. Warehouse - Day of Inventory When conducting a physical inventory the count and verification of actual product in warehouse is the most critical part of an inventory. The following procedures will enable us to provide our customer an accurate count and reconciliation of their products. i. Verify all procedures for the inventory have been completed and the warehouse is ready for the inventory. ii. Establish a control desk and assign verification clerks. Make two copies of control sheets, one for the warehouse and one for the office. See Exhibits- Operation: Exhibit 19. The warehouse will use these sheets to keep track of where the teams have been assigned to count and that all bays have both first and second counts. The office will use these sheets as a double check to ensure all areas have been counted. The control desk will use the sheets to control recounts. Section IV Page 24

25 D. Inventory Control 9. Physical Inventories 9d. Warehouse - Day of Inventory iii. Assign count teams and give them warehouse scanning/count instructions. Ensure everyone understands the procedures. Maintain a log of team assignments on warehouse map. See Exhibits- Operation: Exhibit 20. iv Assign each team a specific area to be scanned/counted. Distribute team assignments. Maintain log to ensure accurate listing of the locations each team has counted to ensure all locations has a first and second count. v. There will be two count sheets for every bay to be counted - an "A" count sheet and a "B" count sheet. See Exhibits- Operation: Exhibit 21. vi. All "A" count sheets will be on white paper and all "B" count sheets will be on colored paper. When you are assigned an area to count, be sure to count all locations assigned on the physical sheet completely and accurately. See Exhibits- Operation: Exhibit 22. Verify product code, lot number and description. Be sure to write neatly and use no abbreviations. Example: If the PID is , do not write Record the number of boxes per pallet (i.e. 4 x 50= 200) in the blank space. vii. Before you begin each count sheet, verify you are in the correct aisle/bay. Complete all information accurately and neatly. If there is no product in the level or bay you are counting, mark "Zero". This will verify that the bay was checked and not just overlooked. Section IV Page 25

26 D. Inventory Control 9 Physical Inventories 9d. Warehouse - Day of Inventory (continued) viii. Count each level completely before moving on to the next level or location. Count from front to back, bottom to top. The front pallet in the first level should be the first pallet you write down. The back pallet in the top level should be the last pallet your write down. ix. After the first and second counts have been completed for specific locations, verification clerks will compare the A & B physical counts. If the counts or locations do not agree, print/write a recount sheet and give to the recount team to check out the discrepancies. x. If you find a pallet without a pallet identification, notify a supervisor immediately. The Supervisor will give you a pallet ID to place on the pallet. xi. If a location is not on the physical sheet, write in the location, product code number, lot number and quantity per pallet. xii. Supervisors will be in the warehouse to answer any questions you may have. If you should have a problem and need the assistance of one of the supervisors, leave your lift in front of the bay you are counting and go find the supervisor assigned to your count area. Section IV Page 26

27 D. Inventory Control 9 Physical Inventories 9d. Warehouse - Day of Inventory (continued): xiii. Once you have completed your count for each level, mark the front pallet of that level with the alpha character of your count sheet. If your count sheets are white, you will put a large letter "A" on the front of the pallet. If you have a colored count sheet, you will put a large letter "B" on the front of the pallet. Chalk or markers will be provided by the shift supervisors to use for marking the pallet. xiv. Gather the following office supplies for physical inventory: Six stack trays One tray for placing the "A" and "B" count sheets that are returned from the warehouse. One tray for the count sheets that are ready for verification One tray for the "C" counts that go to the recount team for verification. One tray for the "C" counts return after verification from the recount team. One tray for "A" counts ready to be keyed into WMS. One tray for count sheets once keyed into WMS. Section IV Page 27

28 D. Inventory Control 9 Physical Inventories 9e. Office: After count completed (Verification of count) i. Gather the following office supplies for physical inventory Three Milk Crates A crate with file folders by aisle location for waiting "A" & "B" count sheets. Crate for completed "A" count sheets. Crate for "No Match" comparison. One wire stack vertical file Red pens (to correct "A" count sheets) Three part carbonless colored paper - continuous feed One 4 foot by 8 foot table Warehouse supplies (one per count team) Small handheld calculators Flashlights (purchase extra batteries) Clipboards Pencils (sharpened) Three (3) stack trays for warehouse control desk ii. iii. Print a current Physical Detail report (blind) by aisle and specific range of bays on three part colored continuous feed paper (count sheets). Distribute the counts sheets to the Inventory Team Managers who will assign and control counts. The Inventory Team Managers will return the count sheets to the office as the sheets are completed. Completed sheets will be placed in trays marked "Incoming "A" and "B". The team captains will draw a vertical line on the control sheet are sheets are returned. Each aisle will have a separate control sheet. Section IV Page 28

29 D. Inventory Control 9 Physical Inventories 9e. Office: After count completed (Verification of count) iv. Once the control sheets are returned, place the sheets in the manila folder in the wire stack file for that specific aisle until both the "A" and the "B" counts sheets have been returned. v. When both sheets are returned, paper clip and place in the stack tray marked "Ready for Variance check. vi. Compare "A" count to "B" count for quantity, lot number, code date, owner number and location. The checker will sum the total case count quantity and record the total at the bottom right hand corner. If "A" and "B" count sheets match: Place sheets in the tray marked "To Be Keyed" If "A" and "B" count sheets do not match: Checker must write up a "C" count sheet for the recount team's verification and place in the tray marked " 'C' Counts Sheets Going Out". Place the "A" and "B" sheets in the milk crate file marked "Waiting for 'C' Counts". When the "C" count sheets are returned, pull the "A" and "B" sheets from the "Waiting for 'C' count file. Record the "C" count in red to reflect the correct count. If the "C" count sheet does not match, send back to the warehouse for additional recount. Section IV Page 29

30 D. Inventory Control 9 Physical Inventories 9e. Office: After count completed (Verification of count) vi. Compare "A" count to "B" count for quantity, lot number, code date, owner number and location (continued). When the "C" count sheets are returned, pull the "A" and "B" sheets from the "Waiting for 'C' count file. If the count matches, the checker will total case quantity, record total at bottom right hand corner and place the count sheets in the tray marked "To Be Keyed". vii. After the count process has been completed and verified, the data entry clerk will enter the "A" count sheets into the WMS system. [WMS screens: Inventory Menu Physical Worksheets - Scanning Enter Physical Inventory by keying in location, pallet identification and quantity. Post (F8)] viii. Print "A" file [WMS screens: Inventory Menu Physical Worksheets Physical Inventory #1. Print "A" Physical Inventory file Enter: Range of locations that was keyed] ix. Manually compare the report to the count sheet. If correct, place in tray marked "Completed 'A' Count Sheets Keyed into WMS". Section IV Page 30

31 OPERATIONS- DISTRIBUTION CENTERS Section IV Issue: Original D. Inventory Control 9. Physical Inventories 9e. Office: After count completed (Verification of count) (continued): x. The controller will verify that the data entry information matches the count sheets and makes any necessary changes and will reprint the Physical Inventory report, if necessary. The sheet is then placed in tray marked "Waiting for No Match Comparison" file. xi. The data entry clerk will print a "Compare A" to Phy Mst" Print No Match Pallets [WMS screens: Inventory Menu Physical Worksheets Scanning Physical Inventory Compare "A" to Phy Mast Print No Match Pallets.] If "No Match Pallet" print is blank: the data entry clerk will file the report in the "Completed 'A" Sheet" crate. If "No Match Pallet" report prints out information: the data entry clerk will record the SKU number and data code on the print. Give the "No Match Pallet" printout to the quality control person to inspect product and approve an entry adjustment. Once quality control has approved product, the data entry clerk will view existing lots in inventory for a match. Section IV Page 31

32 OPERATIONS- DISTRIBUTION CENTERS Section IV Issue: Original D. Inventory Control 9. Physical Inventories 9e. Office: After count completed (Verification of count): xii. The data entry clerk will print a "Compare A" to Phy Mst" Print No Match Pallets (continued): If an exiting lot is found, the data entry clerk will record on the "Adjustment Log Form". (This will be a manual adjustment after the auto adjust). See Exhibits- Operation: Exhibit 23 Both the owner's number and supplier's number must be recorded. If no existing lot is found for specified SKU number, enter as an inbound. xiii. When all locations are processed as described above, complete the Controller to review completed "A" count sheet crate and will record aisle on a new log for final verification. xiv. The Controller will print a "Final No Match Pallet" report by aisle and fix any "No Match Pallets". 9f. Office: Finalizing Inventory i. Print #6 "Compare 'A' of Phy Mst. Print No Match Pallet" report. [WMS screens: Inventory Menu Physical Worksheets Scanning Physical Inventory #6] Set up an inbound for all new pallets adding to inventory. ii. iii. Clear all work files Create an inventory adjustment: [WMS screens: Inventory Menu Adjustments Options Scanners Only Auto Adjust Inventory} Section IV Page 32

33 OPERATIONS- DISTRIBUTION CENTERS Section IV Issue: Original D. Inventory Control 9. Physical Inventories (continued): 9f. Office: Finalizing Inventory iv. Print the inventory adjustments [WMS screens: Inventory Menu Adjustments Options Auto Adjust Inventory (Scanners Only) #1 Create Inventory Adjustments] v. Print the Lot Adjustments [WMS screens: Inventory Menu Adjustments Options Auto Adjust Inventory (Scanners Only) #3 Browse Pallet Adjustments - If line # is less than 999 okay to update inventory adjustments. - If line # is over 999, breakdown into smaller locations and update. vi. Select # 10 Print Adjustment Error Log and fix errors. Reprint adjustments. vii. Update Inventory Adjustments [WMS screens: Inventory Menu Adjustments Options Auto Adjust Inventory (Scanners Only) #6 Update Inventory Adjustments Choose "YES" for option to print] viii. Print Adjustment Confirmation Report [WMS screens: Inventory Menu Adjustments Options Adjustment Confirmation] Print one report by customer number and another by owner number. Mail to each owner. Section IV Page 33

34 OPERATIONS- DISTRIBUTION CENTERS Section IV Issue: Original D. Inventory Control 9. Physical Inventories (continued): 9f. Office: Finalizing Inventory ix. Print a Stock Summary report, a Stock by Location report and a Lot Detail report. Verify that all ending total agree. Beginning inventory minus total adjustments plus total inbounds. x. Type up a Comparison report (beginning inventory minus ending inventory equals +/- balance) See Exhibits- Operation: Exhibit 24 xi. Recount any large discrepancies and make any corrected changes. xii. Print all ending inventory reports and complete the comparison worksheet (an Excel spreadsheet). E. Drop Down 1. Obtain the drop down fulfillment (drop sheet) paperwork from the Supervisor. See Exhibits- Operation: Exhibit Drop the pallet identification numbers indicated on the "Drop Sheet" in full pallet quantities, do not break pallets for drop. 2a. If a pallet must be broken down, notify your supervisor immediately. 3. If a PID cannot be found notify a Inventory Control immediately for a substitution. 4. Inventory Control will retrieve and update the pick ticket for the PID substitution and will also notify the CSR of the order update. 5. The Inventory Control will put the original PID "ON HOLD" for follow-up. Section IV Page 34

35 OPERATIONS- PRODUCTION FACILITIES Section IV Issue: Original E. Drop Down (continued): 6. Drop all PIDs indicated into the pickzone/location. 6a. If, for any reason, the drops cannot be completed, notify a supervisor. 7. Scan all PIDs dropped into the pickzone/location as indicated on the drop sheet. Place PID label on the back of drop sheet. 7a. Confirm pallet has at least 1 PID remaining on the pallet located on the bottom right front case. 8. Sign and date the drop sheet and return to the supervisor. Section IV Page 35

36 F. Shipping Product - Distribution Center Best Practice Objective To ship quality outbound product in an efficient and timely process. To complete the process with the optimal level of trained personnel ensuring accurate inventory records of product in wholesome condition following Millard and customer specifications. SHIPPING PROCESS FLOWCHART Customer notifies facility of outbound shipment (EDI or fax) Millard traffic desk schedules outbound appointments into WMS Scheduler Vehicle arrives at facility (Truck or rail) Product is loaded Comparison of actual product shipped to "Compare to EDI" report Complete Header information and truck log, and Misc Reason codes. Print Bill of Lading Driver signs Bill of Lading and seals truck doors Order shipped off WMS Section IV Page 36

37 F. Shipping Product- Distribution Center 1. Notification of Shipment 1a. The customer notifies Millard of outbound orders via EDI transmission (940) or fax at least 48 hours prior to scheduled ship date. The following information is required: Consignee name and address product will be shipped to P. O. number Product code and quantity Special instructions 1b. Any late or change orders will be called into Millard for permission or authorization to implement. (i.e., 48 hours prior for consolidation, 24 hours prior for standard orders). 1c. The CSR will change orders and update as required by customer specific parameters. 2. Appointment Scheduling 2a. The traffic desk schedules outbound appointments into the WMS scheduler. 2b. The Operations Manager reviews the outbound schedules and determines the optimal level of personnel needed to staff the facility and adjusts the schedules accordingly. 3. Pre-commitment: Responsibilities of CSR 3a. Once received, orders are to be checked against on hand inventories, as well as inbound loads in transit, for shortages. 3b. A pre-commitment report is faxed or ed to customer the day before scheduled shipment 3c. A final shortage modification will be provided to the customer via the loadout Over and Short Report on the day of shipment or through EDI reason codes transmitted to the customer. Section IV Page 37

38 F. Shipping Product- Distribution Center 3. Pre-commitment - Responsibilities of CSR (continued): 3d. Millard will attempt to fill order shortages until the time of order selection. i. All order shortages or variations to the finalized order will be reported through EDI, fax or Commitment - Responsibilities of CSR 4a. Orders are verified against the shipping schedule 4b. Orders are committed in scheduled order i. Full pallet commitment for product to be pulled from reserve. ii. iii. Mixed pallet commitment for product to be pulled from the pick face. Replenishment drop for product to be placed in pick faces. 4c. Print pick tickets and check sheets. 4d. Highlight pick tickets to indicate multiple stops. 4e. Pick tickets go to the warehouse to begin picking process. 5. Warehouse : Order Pick 5a. Lift Operator Responsibilities i. All product will be pulled as directed by the pick ticket. ii. iii. iv. Full pallet loads will be pulled for disbursement. A tally will be taken on each pallet handled. All paperwork is to be signed and returned to the Superintendent's office. Section IV Page 38

39 F. Shipping Product - Distribution Center 5. Warehouse: Order Pick (continued): 5b. Order Picker Responsibilities i. Receive pick ticket from supervisor. ii. iii. iv. Verify product to pick order and record catch weights if applicable. If product is not in designated location, the picker must contact the supervisor for instructions after completing the pallet currently being picked. All changes must be recorded on the ticket and initialed by the Supervisor or Inventory Control. v. Pallets will be neatly stacked with boxes placed top side up. Boxes will not be stacked on edge and boxes with arrows designating This Side Up will be handled properly. Heavy products will be placed on pallet first, followed by items with less density. Overhang on pallets will be minimal and maintained at less than one and a half inches on each side of the pallet. The case with the PID should be the last case picked from any given pallet. vi. The completed pallet will be sent to checker for verification. vii. Sheets are to be forwarded to the office for vertification. 5c. Load Prepared for Shipment: Responsibilities of Checker/Loader i. When Checker/Loader receives outbound paperwork from Supervisor, he or she will check for special instructions (palletizing, catchweights, exporting or any other accessorial charges). Section IV Page 39

40 F. Shipping Product - Distribution Center 5. Warehouse: Order Pick 5c. Load Prepared for Shipment: Responsibilities of Checker/Loader (continued): ii. The checker/loader will verify: the trailer number the trailer condition that the trailer has been precooled that the trailer is chocked iii. iv. The checker/loader will open batch on scanner and begin scanning. In general, product should not remain on a refrigerated dock for more than 30 minutes or a non-refrigerated dock for more than fifteen (15) minutes. This guideline does not apply to customer-specific handling procedures or product requiring special accessorial services. v. The pallet identification is scanned and information is entered per screen as needed. vi. Three temperatures are taken per load (nose, middle and tail). vii. If there is more than one stop, each pallet must be marked with the final destination. Additional information may be needed on each pallet depending on customer requirements. viii. The pallets or product is then securely loaded to prevent damage and/or shifting during transit. ix. The checker/loader closes the batch and completes the load plan, pallet ticket, special charges, and outbound check sheet returns completed paperwork to he Supervisor. See Exhibits - Operations: Exhibits: 27, 4, 3, 28. Section IV Page 40