Crossdocking: The latest and greatest

Retailers continue to emerge as trailblazers when it comes to crossdocking. Just think about the type of distribution facilities that they've been building—more dynamic flow-through rather than static storage. And it's all based on retailing's basic premise: You can't make money until the product is sold at your stores.

And getting product rapidly to those stores is exactly what cross docking aims to execute to perfection. By dispatching inbound merchandise directly to outbound shipping, crossdocking minimizes the amount of time goods spend in non-value-added DCs and thus maximizes their speed to market.

Companies that crossdock not only eliminate wasted time moving product to and from storage, but they also cut down on capital-intensive inventory by shipping immediately to fulfill customer demands.

Some degree of automation is typically needed from both the software and the equipment perspective. Here are the latest developments, innovations, and breakthroughs that have made crossdocking easier and faster.

Smarter software

Recent developments in information systems and software solutions have created more opportunities for crossdocking, allowing for more visibility in the supply chain and improved data sharing between trading partners. Here are three new software capabilities:

• More opportunities. Older systems were only able to do simple, “pure” crossdocking. Only if it was a perfect match of the entire license plate going directly to an outbound shipping door would that product be considered as an opportunity to crossdock. Software provider Manhattan Associates has taken it to the next level by allowing orders, and even order lines, to be split. “To avoid starving inventory at store shelves, most retailers prefer shipping half of that order line immediately rather than shipping none,” explains Eric Lamphier, Manhattan's senior director of product management. If only one, instead of two cartons, of a popular electronic hamster toy is received, the system automatically splits the order and allocates that one carton immediately for crossdocking.
• Sending electronic notices from around the world. Conducting computer-to-computer business transactions over the Internet has become commonplace. By allowing access to Web-based portals, software providers have enabled suppliers to create and transmit Advance Shipment Notification (ASN) information to their retail customers. An ASN is an electronic file transmitted from suppliers to retail customers, providing advance notice of whatproducts are being shipped to the retailer's DC and their estimated time of arrival. It facilitates crossdocking by automating the receiving process, allowing for allocation of a product even while in-transit, and by providing DC managers with a heads-up when planning resources for inbound receipts. Managers are realizing greater visibility in their supply chains and are now able to make better decisions—especially in the case of the unexpected. “When a shipment is held up at the port,” says Prashant Bhatia, director of solutions management at SAP, “it can trigger logic back to say that I've got a problem. I can no longer allocate that inventory on that particular shipment as I thought I could.”
• One database, one system, one supply chain. In the last few years, software providers have been pulling all of their products onto a single supply chain process platform. “It's fairly new,” says Lamphier. “Various components have been integrated into that supply chain process platform longer than others, but actually moving our WMS onto it has been a more recent development—just within the last quarter or two.”  SAP uses its enterprise resource planning (ERP) system as the central repository of information of supply and demand, as well as inventory, for the entire supply chain. And the modules all talk to each other. Transportation management systems (TMS) in conjunction with the event management modules help optimize freight, determine pick-up windows, determine carriers, keep track of in-transit times and create ASNs. That ASN not only gets sent back to the ERP for visibility, but it also gets sent to the WMS where the system uses the information to plan labor, equipment and resources at the receiving dock. When the physical product arrives, logic within the WMS, based on the receipt of goods, determines matches against actual demand.

Smarter, speedier equipment

With more retailers crossdocking over 50% of their items at the case level to their stores, equipment innovations have centered on conveyor sortation systems, print and apply mechanisms, and automatic identification technologies. Here are three new equipment advances:

• Smaller gaps and self-regulating conveyors. In the last year,  the sliding shoe sorter has undergone noteworthy transformations. “By doing a parallel divert, we can now run the packages closer together and get a higher throughput on the same system,” reports Ken Ruehrdanz, manager for Dematic's distribution and warehousing markets. The sliding shoes that used to physically push the cartons off the sorter at an angle can now run those shoes in parallel, enabling smaller gaps between cartons—which were previously from 6 inches to 8 inches—down to 3 inches. With more dense traffic on conveyors, crossdock operators can run their conveyors at a lower speed while still achieving the same throughput. Slower speeds equal less wear and tear, decreased energy usage and less maintenance. Another conveyor breakthrough is automatic speed control. “The whole system can now self-regulate its speed depending on the volume that's inbound on the system,” says Ruehrdanz. The warehouse control systems (WCS) software makes that decision using electronic sensors that's constantly monitoring where all the cartons are and how they're flowing.
• Print and apply on the fly. When your supplier is a fancy designer from Italy who can't be bothered with labeling, you've got to be ready with Plan B. The use of print and apply systems allow crossdock operators the flexibility to deal with inadequately labeled cartons so that proper labels can be printed and applied on cartons as they travel along conveyors allowing them to be immediately cross docked. “When they first started out, these systems could process 10 cartons per minute (cpm) maybe,” says Steve Haskell, vice president for L.A.-based SDI Industries, a designer, integrator and manufacturer of materials handling systems. “Now you can get 30 cpm reliably with a tremendous range of printing and software capabilities.”
• Crossdocking with voice and RFID. With a scan of the pallet license plate, voice-directed operators on the receiving dock can be instructed to quickly move their crossdock pallets to the correct shipping doors without having to look at a terminal. By attaching an RFID tag on a pallet, the simple act of moving the pallet from a tractor trailer through a receiving portal not only acknowledges receipt, but allows the automatic download of critical information so automatic crossdock allocations can be made. The next generation of RFID-enabled lift trucks go a step further by combining RFID data collection with optical real-time location systems (RTLS) to precisely record pallet movement without any operator typing or scanning. As adoption increases, users are investigating the feasibility of using RFID-based technology to eliminate the need for some EDI communications by encoding the advance shipping information onto the RFID tag to reduce the number of EDI messages.

Vision for the future

With more trading partners sharing data in real time along with greater levels of systems integration, Manhattan's Lamphier envisions more “dynamic crossdocks” that constantly look for opportunities to flow-through product, even while still in transit. SDI's Haskell sees equipment improving and becoming more affordable. Soon, you'll simply be running out of excuses not to crossdock.