The advantages of crossdocking have been well publicized, and it’s fair to say, widely adopted by large retailers. This makes sense when you consider that in retail – you often have a “door per store” arrangement, and there isn’t a lot of complexity with regard to synchronizing crossdock goods and goods picked for stores from storage. With frequent/daily store deliveries, if a particular item doesn’t make it onto the truck this time, it will go on the next shipment. However, for non-retail operations, crossdocking can be somewhat more complex.

Here we address some of the issues and make a few suggestions.

Taking The First Step

At receiving you should be able to easily distinguish between “current/active”, “current/same day”, and “future”.

In the first case, current/active - you will find that this is the perfect candidate for crossdocking, i.e., moving product from receiving immediately to shipping for consolidating into a customer order. Note that if you are utilizing a batch picking strategy, your WMS will have to properly orchestrate the timing and release of the crossdock product (more on that below).

Current/same day products can then be staged on a conveyor or floor stacked for release later that day. While, crossdocking future involves short term holding of product until they become current/same day.

Next, look for the low hanging fruit, like customers who tend to order the same products in significant quantities throughout the year (or at least seasonally). Be sure to set aside date-sensitive products which must be held until the older inventory is shipped.

Controlling The Flow

To properly deploy crossdocking strategy, ASN’s, product and/or pallet load ID bar codes, and a Warehouse Management System (WMS) must be integrated into the material handling system operation. With the WMS, pick sequence is changed. Instead of moving all of a product to storage and then having someone pick it, it’s possible that some of the new product that was just received, such as current/active, can substitute for product in storage.

This is especially beneficial when there’s insufficient stock of the product in an active pick location to complete an order, thereby averting a shipping delay, or stock-out condition, and possible customer dissatisfaction. Some WMS software can allocate inbound product to open orders while the product is still in transit making it ready to be crossdocked as soon as it is received at the DC. The WMS accomplishes this by receiving logistics information via the Internet or EDI and keeping track of product movement. It supports the real-time requirements of crossdocking, receiving order details from customers and later informing them of the shipments status.

However, before cases can be crossdocked, a customer specific, bar coded shipping compliant label GS1 128 (formerly called the UCC-128) must be printed and applied to each case. Getting the right bar code label onto all those cases can be a time-consuming headache. The challenge is how to get this job done quickly, accurately, and efficiently. We will discuss how that can be accomplished in a subsequent article.

The following was provided by Jeff Gantt, Product Manager at Manhattan Associates, Inc. and was originally published as feedback to an article written by Dan Gilmore –see (In Search of a Non-Retail Cross Docker):

When we refer to non-retail crossdock capabilities within WMS we classify them as either Opportunistic Substitution or Immediate Needs Driven Crossdocking.

During receiving a check is made to see if there are open shortage tasks (from known or unknown shortages) generated during batch processes (replenishment, the wave, work orders, etc.). If the item and quantity needs are met, the received LPN is converted to an outbound carton, a label is printed (if required) and the user is directed via tasking to the outbound dock.

If inventory (raw material or finished goods) is required at a manufacturing line/build location and there is a shortage, the same process occurs at the time of receiving (minus shipping label generation). Our food manufacturing customers uses crossdocking/opportunistic substitution to satisfy shortages discovered during allocation.

We have a customer that has the standard finished goods DC that ships to their customers. They also have manufacturing facilities (3 satellites) that produce the finished goods inventory that is transferred (using WMS's warehouse transfer capabilities) to this outbound distribution center.

In the DC, opportunistic substitution is used to crossdock the finished goods inventory when received from the manufacturing facilities. These are full LPN/pallets that are tasked directly to the staging location to the order with the shortage. In the manufacturing facilities, shortages from both transfer orders (between facilities) and work orders are satisfied during receiving. If the inventory can satisfy a transfer order shortage then it is tasked to a staging location. If the inventory can satisfy a work order shortage then it is tasked to a build location/manufacturing line. We have a handful of these customers that use similar flows.

We have noticed that these flows are JIT centric. Small runs of potato salad, pasta, etc. are made, packaged and shipped all in the same day. There are exceptions, but date sensitivity to your earlier point is not as relevant when it comes to crossdocking because the DC turns so often or there is no inventory in storage.

Immediate Needs Crossdocking

In addition to the pickticket, immediate needs records are bridged from the ERP, which references the pickticket/sku and in some scenarios the inbound LPN to determine which orders need the inbound inventory. The LPN is converted to a carton during receiving, and the user is directed to move the inventory to staging. We have everyone from office suppliers, to paint manufacturers and apparel customers using this crossdock approach.

To your point timing is a challenge, but the larger issue is the inability for most ERP systems to allocate in-transit inventory as well as on-hand inventory. For most ERPs, the inventory must be received before orders can be dropped/allocated to the DC. Years ago, our customers would develop these capabilities in-house, but now we solve these issues with Distributed Order Management/Order Routing solution.

What Works Best – Why & How?

The following examples offer good potential because they can be easily accomplished within the time window for efficient crossdocking:

• Full pallets of a single SKU – because the load does not have to be broken down, the entire pallet can be crossdocked. Consider utilizing tugger AGVs for this repetitive transportation function.
• Pallet loads and/or floor loaded loose cartons – because the carton has been ordered as a full case, the entire carton can be crossdocked. Consider an express conveyor line direct to the central merge and shipping sorter. If the cases require shipping compliance labels – consider deploying an in-line automatic label printer/applicator system prior to the central merge. More on this in a future article.
• Backorders – which by definition are ready to ship as soon as they are received.
• Made-to-order-product – same as above.
• Customer-ready-product – which have been customized by the vendor.
• Branch & Intra-DC transfers.
• As it relates to broken case, oftentimes customers order in standard increments such as quarter and half case quantities. These may present opportunities for pre-packaging on-site (post-distribution) or at the vendor’s site (pre-distribution) into conveyable inner packs which can then be crossdocked.

Final Thoughts

Now, more than ever, DC managers are looking for the “goose that laid the golden egg”. But crossdocking is no fairy tale! It is in fact a tested and proven technique for speeding product through the supply chain, lowering inventory and handling costs while reducing errors and increasing productivity. As logistics costs continue to escalate, crossdocking is expected to play an ever increasing role in supply chain management.

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