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Crossdocking Crossdocking Document Transcript

  • Corporate Office2809 Millbrook RoadRaleigh, NC 27616(919) 876-3667FAX (919) 872-9666www.tompkinsinc.comTompkins OfficesAllentown, PennsylvaniaAtlanta, GeorgiaChicago, IllinoisDallas, TexasIrvine, CaliforniaRaleigh, North CarolinaTompkins Associates International LimitedCambridge, United KingdomTompkins Associates of Canada LimitedToronto, CanadaInternational AssociatesBuenos Aires, Argentina Crossdocking inNew Delhi, India the ’90sSan Juan, Puerto RicoSao Paulo, BrazilSydney, Australia M-20Copyright 1998 Tompkins Associates.
  • Tompkins AssociatesExecutive Summary Crossdocking - the fad of the moment. Or is it? When understood, the pursuit of a crossdocking strategy is a common sense approach to warehousing. When misunderstood or misapplied, the term is thought of as a catchall solution to every company’s attempt at cost reduction. The term crossdocking is being used in any number of industries to describe any number of receiving activi- ties. This monograph intends to clearly define crossdocking and help the reader develop a path forward. Section 1.0 presents the three different methods of crossdocking: manufacturing, distribution, and terminal crossdocking. Section 2.0 explains the crossdocking strategies - how crossdocking will work between two trading partners. Section 3.0 discusses crossdocking requirements. These include information systems, space and equipment, and operational requirements. And finally, crossdocking implementation is covered in Section 4.0. This monograph attempts to provide a common sense approach to both a complex and simple operational procedure. The next step is to read this information and start the process of greater warehouse efficiency.Crossdocking in the ’90s
  • Tompkins AssociatesTable of Contents EXECUTIVE SUMMARY ............................................................................................. i 1.0 Crossdocking Definitions and Methodologies ................................................ 1 1.1 Manufacturing Crossdocking ............................................................. 1 1.2 Distribution Crossdocking .................................................................. 2 1.3 Terminal Crossdocking ....................................................................... 3 2.0 Crossdocking Strategies .................................................................................. 3 3.0 Crossdocking Requirements ........................................................................... 4 3.1 Information Systems Requirements.................................................... 4 3.2 Space and Equipment Requirements .................................................. 8 3.3 Operational Requirements .................................................................. 9 4.0 How to Implement a Crossdocking Program ................................................ 10 4.1 Justifying Crossdocking ................................................................... 10 4.2 Designing Your Corssdocking System ............................................. 11 4.3 Implementing a Crossdocking Program ........................................... 12 5.0 Conclusion .................................................................................................... 13Crossdocking in the ’90s
  • Tompkins Associates1.0 Crossdocking ping). The ideal situation occurs when theDefinitions and finished goods flow directly from manufac-Methodologies turing into the back of a truck at the dock. This should be called current manufacturing Crossdocking as an operational proce- crossdocking. The next most desirable situa- dure has been around for many years. In fact, tion would be when finished goods flow di- most warehouses have had an informal back rectly from manufacturing to a staging area order crossdocking operation for years and for shipment later. This should be called fu- years. A back order crossdocking operation ture manufacturing crossdocking. Of course, occurs when the warehouse attempts to fulfill a challenge exists here in how far into the fu- a back order with received product before the ture finished goods should be staged instead product is ever stored in the warehouse. The of being placed in storage. The advantage of warehouse has flagged the pending inbound both current and future manufacturing receipt for a back order and knows that when crossdocking is the minimization of the fin- the product is received, the warehouse should ished goods handling. A disadvantage of fu- go get the back order and allocate product to ture manufacturing crossdocking is the the back order. This process has been used amount of staging space required to hold the over the years to quickly get back ordered future finished goods shipments. In fact, the goods to the customer. This procedure has definition of future (two hours, four hours, one not really been concerned with the other ben- day, two days?) should be established by trad- efits associated with crossdocking. ing off the savings in handling versus the costs There are three different methods of of space. Manufacturing crossdocking typi- crossdocking. They are: cally applies only when full unit loads of the same finished goods are shipped. But, cur- 1. Manufacturing Crossdocking rent and future manufacturing crossdocking 2. Distribution Crossdocking require a real-time warehouse management 3. Terminal Crossdocking system to manage the flow and staging of fin- ished goods. The following subsections describe each A challenge that needs to be addressed of the crossdocking methods. with current manufacturing crossdocking is the limitation of not having the opportunity1.1 Manufacturing for placing finished goods on hold prior toCrossdocking their being shipped. It would not be unusual for a finished goods warehouse to be designed Instead of placing finished goods from so that both current and future manufacturing manufacturing into a finished goods ware- crossdocking could be utilized. Another cir- house, they are dispatched to the dock for cumstance that should be included while dis- shipment (sometimes this is called direct ship- cussing manufacturing crossdocking would beCrossdocking in the ’90s Page 1
  • Tompkins Associates the reverse of direct shipping manufacturing When individual cases are being crossdocking, direct receiving manufacturing crossdocked, these crossdocking applications crossdocking. This (JIT) is where materials are most often conveyor sortation system- are received Just-In-Time and go directly from based. It also would not be unusual for the receiving to manufacturing without going to current and future categories to be divided into storage. Once again, this receiving can be current/active, current/same day, and future. done for either current production or future Here the current/active is dispatched into the production. truck, the current/same day is in staging or on the conveyor for release later in the day, and future will be staged to be shipped when the future becomes the current day. Current Manufacturing Crossdock Current/Active Distribution Center Crossdock Current Manufacturing Crossdock Figure 1.1: Manufacturing Crossdocking Current/Same Distribution Center Crossdock1.2 DistributionCrossdocking Just as there is current and future manu- facturing crossdocking, there is also current and future distribution center crossdocking. The differences here are that although full unit loads are received, both full unit loads and Future Distribution Center Crossdock individual cases can be crossdocked. Figure 1.2: Distribution Center CrossdockingCrossdocking in the ’90s Page 2
  • Tompkins Associates1.3 Terminal Crossdocking partners. Crossdocking relationships can ex- ist between any partner in the supply chain. Terminal crossdocking is more of a truck- Raw materials can be supplied JIT to the ing sortation and consolidation of orders than manufacturer, the manufacturer can crossdock a warehouse/distribution center concept. An to either the distributor or the retailer, and the example would be a customer that has ordered distributor can crossdock to the retailer. All products that are distributed from two differ- relationships exist for two reasons: to reduce ent distribution centers. The customer wants the cost of receiving at the receiving facility, a single order receipt of the entire order. Typi- and to reduce inventory in the supply chain cally, the unit loads are mixed unit loads and pipeline. are often referred to as “crossdock loads.” This As mentioned in Section 1.0, one of the means that the mixed unit loads are not going first steps in defining a crossdocking strategy to be shipped from the distribution centers to is to define the appropriate crossdocking meth- the customer but rather from the distribution odology. Concurrent with defining the appro- centers to a mixing terminal where the two priate crossdocking methodology is the portions of the order will be received, com- definition of a crossdocking strategy. The three bined, and shipped together to the customer. crossdocking strategies are: The potential benefits to be achieved via crossdocking are very significant. The proper 1. Unsorted/Unlabeled Crossdocking application of crossdocking can be very in- 2. Unsorted/Labeled Crossdocking strumental in achieving continuous flow dis- 3. Sorted/Labeled Crossdocking tribution. Let’s all use the same terms so that we can properly understand the opportunity Each of these three strategies can apply to being addressed. any of the three crossdocking methodologies. Inbound product can be either sorted or unsorted. The benefit to presorting the mer- chandise is that the handling required by the receiving party is reduced. It does require that the shipper incur additional labor to sort the product, but this additional labor is usually less than the labor that would have been re- quired to sort the product in the customer’s Figure 1.3: Terminal Crossdocking warehouse.2.0 Crossdocking Inbound product can also be labeled orStrategies unlabeled. Once again, the pre-labeling of product will speed up the receiving process Crossdocking strategies refer to how in the customer’s warehouse. The shipper will crossdocking will work between two trading incur additional labor to bar code and iden-Crossdocking in the ’90s Page 3
  • Tompkins Associates tify all outbound cartons and unit loads. This cases, if the vendor is pre-sorting and pre-la- procedure should also result in a net savings beling the product, the product is never re- for the two trading partners. ceived at the customer Distribution Center The first strategy is unsorted/unlabeled (DC). Instead the merchandise is shipped di- crossdocking. In an unsorted/unlabeled rectly to the store. In other cases, the mer- crossdocking operation, the inbound merchan- chandise is sent to a third party or pool dise does not have a final ship-to destination distributor. In either case, the merchandise label and the product has not been presorted has already been picked and identified by the by the shipping partner. The manufacturer or vendor and, as a result, the receiving process wholesaler/distributor picks the merchandise is streamlined. for shipment and builds the shipping loads based on the most economic and efficient 3.0 Crossdocking methods for the shipper. When the product is Requirements received, the customer must break down the loads, sort the product, label the product for The key to any crossdocking operation the final store destination and reload the truck. is the information systems that will support The second strategy is unsorted/labeled the crossdocking operations. These informa- crossdocking. In this strategy, the vendor la- tion systems will need to utilize automatic bels all inbound merchandise with an out- identification technologies and Electronic bound store label. When the customer receives Data Interchange (EDI) transmissions. Sec- the merchandise, it has already been identi- ondary requirements will include space and fied. The customer can place the goods on a storage and material handling equipment. conveyor system and let the conveyor system And, of course, changes to the operational sort the product. If the product is not placed procedures will have to occur so that on a conveyor, the product is directed to the crossdocking can be supported. The follow- staging location and is manually placed in that ing subsections describe each of these require- staging location. The customer is providing ments. the order consolidation of this inbound mer- chandise with other merchandise that is await- 3.1 Information Systems ing shipment. Requirements The final crossdocking strategy is sorted/ labeled crossdocking. Inbound product is la- A successful crossdocking strategy re- beled by the vendor and the vendor has per- quires that a company have a successful ware- formed a pre-sort of the merchandise to build house information systems strategy. The logical loads. The customer is then going to driver behind developing a warehouse infor- crossdock the entire unit load upon receipt. mation systems strategy is the need for qual- The vendor has essentially picked its Stock ity information with zero information lead Keeping Units (SKUs) for the order. In some times. In short, what a warehouse informa-Crossdocking in the ’90s Page 4
  • Tompkins Associates tion systems strategy does is provide a com- tion transactions. Once these tools and pany with the structure to support enablers are in place, the subsequent benefits crossdocking. Figure 3.1 illustrates the model found in Figure 3.1 can be realized. These for a warehouse information systems strategy. are many of the benefits or requirements as- The three software tools used to develop this sociated with cross-docking. strategy are Distribution Requirements Plan- ning (DRP) software, Warehouse Manage- Automatic Identification ment Systems (WMS) software, and Requirements transportation software. WMS software is the only software that is critical for crossdocking success. The other software systems may pro- The bar code and associated Auto-ID vide some added benefits, but their impacts equipment serve as an internal information are minimal compared to the utilization of a accuracy enabler. The primary Auto-ID re- WMS. The two information accuracy enablers quirement is that all inbound product have a are EDI and Automatic Identification (Auto- bar code. If all inbound product are bar coded, ID) technology. EDI ensures the accurate and then product identification can be done timely exchange of information between trad- quickly and accurately. These benefits can ing partners, and Auto-ID technology ensures be had with either a conveyorized or a non- the same when conducting internal informa- conveyorized solution. Figure 3.1: Warehouse Management System Strategy ModelCrossdocking in the ’90s Page 5
  • Tompkins Associates Two pieces of information are required begin managing the process before product is to make crossdocking a success. First, each physically received. This added functional- inbound item must be identified by product ity further helps facilitate crossdocking. or SKU number. Second, the case pack quan- Many functions occur prior to receiving tity must be identified. These two pieces of that have a significant impact on the receiv- information make it possible to count and ing operations. If visibility can be provided identify all inbound product. The quickest and to these activities, then the warehouse can most accurate way to identify and verify this begin the planning process prior to receipt. information is through the bar code. If each Early visibility can maximize crossdocking inbound case is bar coded and the case quan- opportunities, maximize dock door utilization, tity or prepack quantity is bar coded, then ev- increase the turn time of the receiving area, ery carton can be identified. assist in scheduling inbound freight, and pro- The third bar coding application involves vide for better labor planning. A WMS can the identification of unit load quantities. In a assist in providing this early visibility. sorted/labeled application, the shipper has Many WMSs now have the functional- built logical unit loads that have mixed SKUs ity to support the scheduling of inbound car- and are ready to be cross-docked directly to riers. A WMS will not select a best method the final destination. In this application, each for shipment, but a WMS can support manag- unit load should be bar coded with a unique ing or scheduling of inbound freight once an license plate. This uniqueness of the license inbound freight method has been selected. plate will make it possible to crossdock these This allows the receiving department to slot unit loads to a specific store location. carriers and maximize dock door utilization. If the WMS is used to support the trans-Warehouse ManagementSystems portation function, then the WMS can be used to evaluate carrier and vendor performance. One of the keys to a successful Anticipated receipt times, carton misships, crossdocking operation is a Warehouse Man- missing or invalid purchase orders, etc. can agement System (WMS). A WMS is the in- all be tracked, and it is possible to create a tegration of bar coding technology, Radio vendor and/or carrier performance and com- Frequency (RF) communications equipment, pliance program. hardware and software. A WMS manages all The accuracy of incoming receipts iden- internal information flow in a distribution cen- tification and subsequent item tracking is criti- ter. Whereas the role of the bar code is to cal to the success of any crossdocking quickly and accurately identify all inbound operation. Accordingly, a WMS must provide cases, the role of the WMS is to manage the error-free tracking from receipt through stor- flow and direct the crossdocking activities. In age to shipment. Receiving consists of three recent years, the WMS has also been able to primary tasks:Crossdocking in the ’90s Page 6
  • Tompkins Associates 1. The receipt of items into the company sist in the pre-receiving process. The down- warehouse loading of detailed shipment information 2. A quality assurance hold for some from the host system to a WMS would most items quickly and accurately translate this infor- 3. The staging of material for putaway mation into usable information. A second functional requirement of a Receiving is the operation that requires WMS is that the WMS be self-checking. All the highest level of information integrity. If receipt information that is entered into the deficiencies occur in the receiving operation, WMS should be entered without knowledge then these mistakes will occur not only in of what the actual answer should be. For ex- crossdocking but also throughout the opera- ample, the WMS should ask for a stock num- tion. The principal challenge with receiving ber to be entered into a handheld unit. The is that the WMS must rely on inbound infor- WMS should not merely display the antici- mation that has been generated by an external pated stock number for the receipt and ask the source. This requires that the receiving op- operator to verify that number. Any time the eration be self-checking and that all receiving receiving operator is asked to merely verify a information be validated. In operations where number, there is the chance that the receiving the operator must override the system, the operator will concur with the system recom- override should be noted and an effort should mendation and not actually check the stock be made to ensure that the cause of the over- number. This is especially true when the ride is understood. WMS is asking for an inbound unit, case, or The receiving process begins with the carton total. downloading of detailed receiving informa- To further support self-checking, infor- tion from a host computer expected-receipts mation that is entered into the WMS that the file. The receiving process ends with the stag- WMS identifies as wrong should be re-entered ing of goods for putaway or the crossdocking by the receiving operator. If the second entry of that inbound product. The following are of this information matches the first entry, this functionality issues to consider when design- information should be accepted as correct. If ing a WMS to support crossdocking. the second entry does not match the first en- One of the primary receiving require- try, then the receiving operator should be asked ments of a WMS is to have accurate receipt to enter the information a third time. The information with advanced notice of the an- above discrepancies should be noted in a log ticipated receipts. Advanced shipping notice and follow-up steps should be made to ensure (ASN) information that can be downloaded that these problems do not continue to occur. to a WMS will facilitate quick and accurate A final functional requirement is the need receiving operations. ASNs that can be down- to reduce the time product spends in staging. loaded to a WMS prior to receipt can also as- After the incoming receipt’s bill-of-lading hasCrossdocking in the ’90s Page 7
  • Tompkins Associates been checked, the warehouse must sometimes vide a Shipment Status Message. A Shipment wait until quality control completes inspec- Status Message from the carrier will allow for tion, purchasing or planning rectifies discrep- better pre-receipt planning. ancies, operators are available, or space is A typical approach as to how EDI can found to store or stage materials. help facilitate crossdocking would be as fol- These scenarios, coupled with the fact lows. The shipper’s internal system sends an that most warehouses suffer from a chronic EDI bill-of-lading to a carrier and an ASN to lack of staging area, require that product move the customer. The carrier electronically ac- quickly and accurately through staging. A knowledges receipt of document, provides WMS minimizes the time product sits in stag- electronic tracking information as the ship- ing because of operator-directed putaway and ment moves towards its destination, and is- system-selected putaway locations or sues an electronic freight bill to the shipper. crossdocking lanes. A WMS minimizes stag- The customer acknowledges receipt and the ing times by monitoring the time product sits crossdocking operations can begin. in staging and by working to create a continu- The unfortunate thing about EDI is that ous flow of material into and out of staging. many companies do not have EDI capabili- In short, a WMS monitors staging to reduce ties. One potential solution to this challenge the total cumulative time products spend in would be the use of two-dimensional bar staging. codes. A two-dimensional bar code is a bar code that contains a significant amount of in-Electronic Data Interchange formation. In fact, a two-dimensional bar code is able to contain all of the information found EDI is the electronic transmission of in a bill-of-lading or ASN. This single bar standard structured documents between com- code is scanned and all of the shipping infor- puter applications in two organizations or re- mation is immediately uploaded to the WMS mote sites of the same organization. Quite or host business system. The two-dimensional simply, EDI is one computer communicating bar code is valuable in applications where the to a second computer electronically. EDI, as shipper cannot provide EDI transmission, but we shall see, is one of the critical elements of advanced shipping information is important any cross-docking program. to maximize crossdocking opportunities. One of the most important EDI docu- ments is the advanced shipping notice (ASN). 3.2 Space and Equipment An ASN is an electronic document that will Requirements provide the customer with the visibility of what was shipped. The ASN will help deter- Crossdocking operations require that mine potential crossdocking opportunities and there be an adequate amount of staging space. will also help in crossdock scheduling. In The crossdocking staging area must be large addition to the ASN, shippers can also pro- enough to provide for a direct flow of goodsCrossdocking in the ’90s Page 8
  • Tompkins Associates between receiving and shipping. Sometimes can be placed on a conveyor, and the conveyor this flow is automated and is accomplished can handle the sortation of the product and through the use of conveyor technology. Other the diverting of the product to the appropriate times, the flow is manual and is the result of shipping door. If merchandise is received and lift trucks and pallet jacks moving the mer- it is not pre-labeled, the merchandise will need chandise between the receiving and shipping to be labeled and then placed on the conveyor door. In either case, the distance traveled for sortation. The benefit of the conveyor sys- should be minimized. These two methods tem is that the receivers can place the goods have minimum staging space requirements on the conveyor as they are received and in- needed to accomplish current crossdocking. crease the turn times of the crossdocked prod- Once these minimum space requirements uct. The second advantage is that the conveyor are met, then the justification for all additional can take advantage of the overhead cube and staging space is the result of a reduction in serve as a holding area for future crossdocked material handling costs. Assuming that the product. current operations can support current crossdocking, future crossdocking may or may 3.3 Operational not require additional staging space. As dis- Requirements cussed earlier, the crossdocking methodology that is used can have an impact on the space For a crossdocking program to be suc- requirements. Current crossdocking requires cessful, the vendors and carriers must provide less staging space than future crossdocking. reliable advance information. Accurate infor- The more hours of future crossdocking re- mation helps streamline the receiving process quired, the more staging space that is required. by minimizing the number of checks required The square footage requirements for fu- and by allowing a high degree of certainty in ture crossdocking operations can be mini- receipt planning. If the vendor and/or carrier mized by using the vertical cube. Sometimes cannot accurately provide this advance infor- pallet racks, drive-in/drive-thru racks, carton mation, the opportunity to effectively flow racks, and/or push back racks are used crossdock is diminished. to increase the density of product staged in A vendor and carrier certification pro- the receiving staging area. It must be remem- gram will help improve inbound information bered that the intent of these storage methods accuracy. For vendors, the following infor- is for staging and not short-term storage. mation should be tracked: Companies must be careful not to turn the staging areas into storage areas. n Carton count accuracy Conveyors are one way to reduce some n Misships of the staging requirements and also to speed n Inbound carton damage up the crossdocking operations. Pre-labeled n Missing labels merchandise that is received from a vendor n On-time shipmentsCrossdocking in the ’90s Page 9
  • Tompkins Associates n Back orders for you to build better partnerships with your n Information completeness vendors and customers? These are just a few of the questions that you must ask. In reality, This information should be tracked by most of us have very specific reasons for at- order. When a vendor shows high levels of tempting crossdocking. After we have an- accuracy and competency in all of the above swered these questions, we are then ready to categories, that vendor is a candidate for move forward. crossdocking. For a vendor to be a candidate The implementation of a crossdocking for crossdocking, that vendor must exhibit a program is not difficult. The first step lead- high degree of order picking accuracy and ing towards a successful implementation is to must properly label all inbound freight. understand what crossdocking is all about and For carriers, the following information to define your approach to crossdocking. That should be tracked: is what these first four sections have conveyed. Once a basic understanding of the technology n Inbound schedule adherence has been developed, the following steps should n Misships be followed to successfully implement a n Damage crossdocking program. n Carton count accuracy n Advance Shipping Notice (ASN) ac- 4.1 Justifying curacy Crossdocking The principal piece of information that Crossdocking is sometimes viewed as a is tracked for carriers is shipping information win/lose proposition. The companies on the accuracy and schedule adherence. It is up to receiving end of the crossdocking operations the vendor to accurately pick the order. It is are the winners, and the companies having to up to the carrier to get the order to the right supply the crossdocked goods are the financial customer at the right time. losers. In a JIT environment, many times the inventory reduction in the manufacturer’s plant4.0 How to Implement a has merely been relocated to the supplier’sCrossdocking Program warehouse. Many times the retailer has pushed back on the manufacturer or distributor addi- The first step toward implementing a tional packaging, handling, palletizing, and/or crossdocking program is to define your labeling requirements. In essence, the retailer crossdocking needs. Why do you want to do is telling the manufacturer or distributor to crossdocking? Will there be potential space, make the merchandise floor ready. Merchan- inventory, or labor savings? Will crossdocking dise prepared in this manner is a boon to the give you a competitive advantage in the mar- retailer, and many times a significant cost to ketplace? Will crossdocking make it possible the manufacturer or distributor.Crossdocking in the ’90s Page 10
  • Tompkins Associates With this as the setting, how do we go ings and the partners both share in the sav- about justifying crossdocking? How do we ings, then a crossdocking solution has been create a win/win environment where both trad- economically justified. ing partners reap economic benefit? How do The development of a cost for an activ- we move crossdocking from theory to prac- ity is principally an engineering activity. En- tice? gineering must assign a cost to each unit of The first step in the economic justifica- activity and then calculate the net potential tion process is to define the costs and savings savings between the two trading partners. associated with crossdocking. This assign- The approach you take to justify ment of costs is sometimes called activity- crossdocking is also dependent upon whether based costing. For each activity, a cost is you are the supplier or purchaser of the goods. assigned to that activity. For example, there If you are the purchaser of the goods, gener- is a cost assigned to building prepacks in the ally crossdocking will be a positive develop- distributor’s warehouse. On the receiving end, ment. Any time a value-added process can be there is a savings associated with not having performed with a high degree of accuracy by to pick these prepacks. The following is a list your vendor, you are generally reaping eco- of costs that might be associated with a typi- nomic benefit. cal receipt by a retailer. If you are the supplier trying to imple- ment a crossdocking program, you must also n Inventory carrying costs assess the qualitative benefits associated with n Receiving handling costs crossdocking. By offering crossdocking to your trading partners, will you generate more n Paperwork transaction costs sales? Will you develop more loyalty with n Labeling costs your customers? Is crossdocking going to be n Storage handling costs a business requirement with this customer in n Picking costs the future? Are your competitors looking at n Packaging costs crossdocking? These questions, if answered Space costs positively, will lead to economic benefits in the future. To develop an activity-based cost, these costs would be summarized as a per unit cost 4.2 Designing Your to distribute that particular type or class or Crossdocking System department of merchandise to the stores. A cost would then be determined to distribute Now it is time to design your cross-dock- this merchandise on a per unit basis if it was ing system. If your system does not require crossdocked. Finally, a per unit cost would any physical redesign, this step can be skipped. be calculated for the vendor to perform the In most crossdocking projects, a redesign of crossdocking activities. If there is a net sav- the receiving area is required.Crossdocking in the ’90s Page 11
  • Tompkins Associates Before any redesign can begin, the op- The third step deals with identifying al- erational and business procedures related to ternative facility, equipment, procedural, and/ crossdocking must be documented. This or personnel plans which will maximize the methodology will serve as the blueprint for crossdocking opportunities. From these al- the crossdocking operations function. Once ternative crossdocking plans-of-action will this has been documented, then the physical come the specific time-phased plan-of-action redesign efforts can begin. Let’s look first at to be recommended for meeting the warehouse the design of a crossdocking facility from the requirements over the given planning horizon. purchaser’s perspective. The first step involves obtaining and de- 4.3 Implementing a Crossdocking Program veloping scaled drawings of the areas that will be affected by crossdocking. This is gener- The first step in the implementation ef- ally the receiving/staging area. The accuracy fort is to identify potential crossdocking part- of the drawings should never be assumed. It ners. The easiest partners to begin a should always be physically verified on the crossdocking program with are companies that warehouse floor. already are crossdocking. Experienced The existing warehouse equipment crossdocking partners will help speed up your should be identified and documented. The la- learning curve. They will have already learned bor complement of each area has already been the basics of crossdocking and will be able to calculated during the activity-based costing, share their insights with you. but should be re-validated during this step. One of the most difficult questions to More specifically, the general responsibilities answer when developing a crossdocking pro- should be documented for each person af- gram is what information should be shared fected. between trading partners. Do you share The next step involves defining materi- weekly sales volumes? Do you provide this als to be crossdocked in the warehouse and by store, region, or as a corporate-wide sum- the volume anticipated during the planning mary? As a manufacturer, do you share your horizon. Forecasts or production schedules manufacturing schedule with your suppliers? should be used to predict the storage volumes The answer to these questions is gener- and turnover rates of each category over the ally “yes.” You need to share as much infor- planning horizon. Items to be crossdocked mation as possible to allow your trading should be classified by their material handling partners to maximize their production or dis- and staging requirements. These requirements tribution capabilities. The closer they can get should be reflective of the operational to minimizing their costs associated with crossdocking procedures that have already crossdocking, the bigger the economic sav- been defined. ings for both trading partners.Crossdocking in the ’90s Page 12
  • Tompkins Associates5.0 Conclusion Crossdocking - the fad of the moment. Or is it? Crossdocking is not new. What’s new is the industry’s current fascination with the topic. Crossdocking can provide signifi- cant benefit to most every type of warehous- ing operation. The key to a successful crossdocking initiative is to understand the technology, define your opportunities, and to then embark upon an implementation.Crossdocking in the ’90s Page 13