Warehouse Procedures For Handling Over Shipments (Receiving To Resolution)

Over Shipment is a shipment containing more goods than were ordered, documented, or expected. This article provides a step-by-step warehouse procedure for receiving, documenting, quarantining, and resolving over shipments so operations remain accurate and compliant.

Initial Receiving Controls

Receiving is the first defense against over shipment fallout. Establish clear steps that front-line staff follow when quantities disagree with the PO or ASN.

• Scan-to-PO Process: Require barcode scanning of cartons/pallets against the purchase order or ASN so the WMS automatically flags quantity variance before putaway.
• Count Verification: Use a two-step count for any discrepant items: an initial count and an independent verification by a second receiver.
• Immediate Quarantine: Move unexpected units to a designated quarantine location to prevent accidental putaway or sell-through.

Documentation And Communication

Once an overage is detected, document and communicate quickly to prevent confusion and enable fast resolution.

• Record Evidence: Capture photos of the received shipment, packing lists, and scanned data. Attach these to the receipt transaction in the WMS.
• Notify Stakeholders: Alert procurement/buyer, vendor contact, and accounts payable with evidence and recommended disposition (hold, accept, or return).
• Hold Authorization: Require written vendor authorization (email or RMA) before returning goods unless contract allows automatic return.

Inventory And Accounting Steps

Align inventory records with accounting to avoid downstream errors:

• Provisional Inventory Tagging: Tag quarantined units in the WMS as provisional or pending disposition so orders do not pick them.
• AP Hold: Place invoices on hold if quantity discrepancy impacts payable until resolution is documented.
• Credit Memo Tracking: When a vendor issues credit, record the memo and reconcile it against the supplier invoice promptly.

Return Logistics And Carrier Coordination

If the vendor requests the excess returned, coordinate logistics to minimize cost and compliance risk:

• Return Authorization: Obtain written return instructions with agreed carrier, Incoterm, and cost responsibility.
• Carrier Paperwork: Ensure bills of lading and returns manifests accurately list quantities to avoid additional disputes.
• Palletization And Labeling: Repack and label returned pallets to the shipper’s specifications to ensure smooth inbound processing on their end.

WMS And Process Improvements To Prevent Recurrence

Design systems and KPIs that reduce the frequency of over shipments.

• ASN Validation Rules: Configure the WMS or middleware to reject or flag ASNs that don’t match PO quantities and require manual approval.
• Supplier Scorecards: Track supplier over/under shipment rates and use them in sourcing decisions or corrective action plans.
• Training And SOPs: Maintain clear SOPs for receiving and returns; train seasonal or temporary staff on these exact steps.

Performance Metrics

Measure and report trends so you can focus improvement efforts where they matter.

• Overage Rate: Percentage of receipts with quantity overages versus total receipts.
• Return Lead Time: Average days between detection and return pickup or credit issuance.
• Inventory Adjustment Time: Time to correct inventory and accounts after overage detection.

In short, the Over Shipment requires an operational playbook: detect at the dock with scanning and verification, quarantine and document, notify stakeholders, and follow an approved return or acceptance workflow. Combine clear SOPs, WMS controls, and supplier management to prevent recurrence and keep inventory and accounting aligned.