Is crossdocking right for your facility?
Improved service levels and decreased transportation costs are among the benefits that some crossdocking facilities are realizing.
By Bob Trebilcock, Executive Editor -- Modern Materials Handling, 11/11/2009
If you think about it, the real point behind materials handling isn’t better handling. It’s no handling at all. That’s one reason that crossdocking, the process of receiving products and then quickly shipping them out without putting them in reserve storage, is becoming a common practice.
Last year, for instance, Modern recently published a survey by third-party logistics provider (3PL) Saddle Creek Corp. that found 52% of the surveyed distribution professionals were currently crossdocking while another 13% planned to begin crossdocking in the next two years.
When asked to identify the single biggest benefit of crossdocking, 23% of survey respondents chose “improved service levels.”
The second biggest benefit survey respondents identified was reduced transportation cost. A common way to reduce freight costs, the report says, is to use a crossdock facility to consolidate LTL shipments into full loads.
How JCPenney crossdocks
Crossdocking is especially prevalent in the retail supply chain. JCPenney, for instance, has developed a supply chain and store replenishment strategy built around crossdocking.
On the West Coast, for example, JCPenney crossdocks up to 95% of the cases received from the port in Oakland at its Lathrop, Calif., regional distribution center straight from the receiving dock to the shipping dock with just two touches in between: Once to unload them onto a conveyor at the receiving dock and once to load them into a trailer at the shipping dock.
And when that product is received at one of Penney's 13 regional store support centers, in all likelihood it's crossdocked again to a store. "We're able to process a carton in five to six minutes, depending on which door it's coming out of and which doors it's being sorted to on the outbound side," says Tim Wood, Penney's engineering and optimization director. In fact, the Lathrop is one of six crossdocking centers in Penney’s distribution network. "We have been crossdocking for 30 years,” says Wood. "Only a small percentage of our merchandise goes into temporary storage."
How Supply Chain Solutions crossdocks
The just-in-time/just-in-sequence delivery of parts to an assembly line is another variation of crossdocking. In this model, suppliers ship all of the parts and components required to run the manufacturing line to the plant in the same orders as the products will be built.
While JIT/JIS got its start in the automotive industry, others including the office furniture industry have adopted the model. In Grand Rapids, Michigan, for instance, Supply Chain Solutions built a sequencing center near the plants of two major industry manufacturers. Each morning, the center receives the parts that will be needed for that day’s production runs. Center employees kit the parts and load them on a truck in the reverse sequence of how they’ll be used at the line – first in/last out – and then deliver them on a just-in-time basis to the manufacturing plants. At the end of the day, almost all of the inventory received that day has been consumed.
Simple crossdocking
The JCPenney and Supply Chain Solution operations are enabled by sophisticated software and controls. But not all crossdocking operations require an investment in technology, says Jim Apple of The Progress Group. For example, Apple worked with an auto parts distributor in Ohio with one large central warehouse that replenished smaller warehouses around the state. Rather than install an automated conveyor and sortation system to crossdock incoming product to outbound shipping areas, pallets were simply stored in an accumulation area with other product clearly marked for delivery to that DC. “It all happened with just a little bit of information, yet it was effective and efficient,” says Apple.
While each example represents a different industry and variation on crossdocking, what makes all three successful is that they are efficient by taking the handling out of materials handling.
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