Retail EDI

 Cross Dock

by Jim B. Cantrell,  This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer truck or rail car and loading these materials in outbound trailers or rail cars, with little or no storage in between. This may be done to change type of transport, or to sort material intended for different destinations, or to combine material from different origins. 

In purest form this is done directly, with minimal or no warehousing. In practice many "cross-docking" operations require large staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship. If the staging takes hours or a day the operation is usually referred to as a "cross-dock" distribution center. If it takes several days or even weeks the operation is usually considered a warehouse. This was first pioneered by Wal Mart.  Cross docking is used to decrease inventory storage by streamlining the flow between the supplier and the manufacturer. 

Common Retail scenario

1. Retailer sends a purchase order to a vendor: containing many mark-for locations being shipped ot one distribution center or warehouse.  The purchase order (850) contains one SDQ segment for each store. 
2. When the vendor receives the order they pack each store's required items seperately, but as part of the whole shipment. 
3. When all the shipment information is gathered, cartons packed, UCC-labels on cartons the ASN (Advanced Ship Notice) is sent back to the retailer.
4. Carrier comes, picks up goods, delivers to retail DC/Warehouse.
5. As goods are coming off the Carrier's truck their UCC labels are scanned.  This does two things: it updates retailer inventory by checking off the receipt of goods as well as identifying what store that particular carton is intended for.
6. Once the store destrination is read by the scanner either people or conveyors route the carton to the appropriate loading dock to await transport to it's final destrination.

Typical applications

• "Hub and spoke" arrangements, where materials are brought in to one central location and then sorted for delivery to a variety of destinations
• Consolidation arrangements, where a variety of smaller shipments are combined into one larger shipment for economy of transport
• Deconsolidation arrangements, where large shipments (e.g. railcar lots) are broken down into smaller lots for ease of delivery.  

Factors influencing the use of cross-docks

• Customer and supplier geography -- particularly when a single corporate customer has many multiple branches or using points
• Freight costs for the commodities being transported
• Cost of inventory in transit
• Complexity of loads
• Handling methods
• Logistics software integration between supplier(s), vendor, and shipper
• Tracking of inventory in transit  

Supplier’s lack of understanding this process is one of the main reasons for charge back’s in the retail industry.  This systems dependency on solid EDI 856 and carton labels (UCC-128) is paramount as with no visibility into inbound shipments, warehouses lose enormous amounts of efficiency.

Also try us on Twitter (http://twitter.com/RetailEDI)  or on Linkedin (RetailEDI).

Sign up for our Email Newsletter