Cross docking II (Two)

In the previous posting we looked into the theoretical pure Transportation Cross Docking, where there are dedicated cross docking warehouses. But often cross docking is classified into several categories. Cross docking reduces handling costs, operating costs, and the storage of inventory. That’s why this logistics method is used in various industries, e.g. the retail and grocery distribution. Originally cross docking was solely done by moving goods from one truck directly into another. Nowadays cross docking is able to handle larger and more complex operations. Therefore cross docking distribution centers may include highly efficient automation systems for staging, sorting and consolidating inbound materials for shipping. And even a very short term warehousing function might be included. Here are some cross docking types that is often refered to:

Manufacturing Cross Dock
Use Cross Docking for the receipt, consolidation, and shipment of a pre-defined quantity of raw materials or component parts, typically from many suppliers, to the product plant.

Distributor Cross Docking
Cross Docking is performed on a wide variety of merchandise. Typically it is conducted in operations where various manufacturers, making complementary items, ship their merchandise to a common distributor who assembles the products on a multi=SKU Pallet before delivery to the next level of the supply chain.

Transportation Cross Docking
Transportation companies sort and consolidate parcels and pallet loads based on geographic destination.

Retail Cross Docking
Products are received at these retailers’ distribution centers, moved across the dock, and married with other products bound for the same store. A few types of display-ready-pallet builds for end-users fit the cross dock profile; items are off-loaded but not put-away, the display ready pallet is built, and then released without being put-away. All would have to transpire within 24 hours.

For now, I would like to focus on two main cross docking methods.

Cross Docking I (Transportation Cross Docking) – This process consolidates inbound products from different vendors into a mixed product pallet for the same store, which is delivered to the customer when the final item is received. Logistics companies then deliver the goods to the respective stores. In this scenario the crossdocking warehouse can be a pure provider of cross-docking services. If we compare this to Dynamics Ax, it means that there are no sales orders, purchase orders or inventory transactions. The information on how to cross dock is information either on labels attached to the pallet, or information received as ASN (Advance Shipment Notification)

Cross Docking II
(Distributor Cross Docking) – This process combines shipments from a number of different carriers. All suppliers receive an overall order summarizing the orders of the individual stores. They then transport the goods as one big delivery to the staging area where the goods are repacked onto pallets with other goods from other carriers for the same store. Logistics companies then deliver the goods to the respective stores. This type of Cross Docking is both an advantage for the customer and the supplier as there is only one order or delivery per day or per week.

A Dynamics AX approach to support cross docking II (Distribution cross docking).

Standard Dynamics AX do not have cross docking support out of the box, but I see several companies is using the direct delivery function to achieve cross docking.

By doing this, one purchase line can be linked to a sales order line, and the delivery information is transferred from the sales order to the purchase order. The drawback is that there is a “one-to-one” relationship between the receipt transaction and the issue transaction. There is also an issue that the cross is close to 100% manual. (PS! There is an option to specify a shipment reservation sequence that should look for items in the receiving dock, but this is not a pre determent cross docking ).

But in the real world we see the need of a many-to-many relationship. One receive, should be cross docked to several sales orders, meaning that you may receive a large quantity from a purchase order, and it will fulfill many different sales order to different customers. Often it is even not customers, it could be transfer orders to other warehouses, or retail stores classified as warehouses.

Standard AX do have “traces” of solving this. It is called inventory marking.

Here you do have a many-to-many relation between transactions. It is even documented on the inventory transactions as shown here:

Here the Lot-ID points to the Reference Lot on the inventory transaction. So by doing some manipulation on the inventory marking we can make Dynamics AX keep references between issues and receipts. And this is also something that can be the origin to a cross docking II scenario.

But there is a few more things that needs to be in place to make the cross docking efficient. The first thing is to an efficient way of transporting goods from the receipt dock to staging area/shipping docks. But the transportation system must also support transport to all kinds of areas in the warehouse, like buffer location, picking location, outbound docks or to automated warehouse solutions. This can be visualized like this:

Standard AX do have a pallet transportation logics, even though the looks of it could be improved;

Here the user select the pallet ID, and starts the transport. Arriving to the destination location, the user completes the transport. This screen does the job, but the for a warehouse worker on a forklift, it is difficult to use. A forklift operator wants to use barcodes and/or touch sensitive screens. The other negative element is related to that it only supports full pallets. In a real world scenario we often see that transports are needed on cartons or even on items that do not have a unique identifier. In the To-Increase Warehouse Management & distribution, this transportation system has been extended to support transport on both pallet and carton license plates(also called SSCC), and also transport of goods without having a identifier;

When a good way of identifying goods, and a good transportation method is in place, that it is possible to do cross docking efficiently. As shown in the figure below, the cross docking is then processed in the same way as any other transport:

The screen above is the receive transactions where a single purchase line has been split to 10 inbound transports, where the first is cross docked to picking area, while the others are received into the warehouse. In a cross docking scenario the destination location would be an outbound dock, and the name of the customer would also be visible. To-Increase WM&D also support the ability to create the license plates, and to create the correct labeling for the goods to be cross docked and to the correct customer.

So to conclude in how to make an efficient cross docking with dynamics AX you need:

1. Build a framework on top of inventory marking to mark how cross docking shoul happen, and that works even when you have a long supply chain.(Going through several warehouses before being shipped out)
2. Create a receiving system that allows you to receive ASN and the goods, control the inbound transport.
3. Modify the transportation system to support more scenarios(Pallets, Cartons and items)
4. Create an efficient system that can be used on forklifts and RF/PDA
5. Create a label integration to label the goods.
6. Create an efficient outbound registration system.

My advice is…. Don’t try this. A better solution is to look to proven ISV-solutions that focus on this, and my advice is off course To-Increase Warehouse Management & Distribution.

In my next posting I will look deeper into how to implement cross docking I (transportation cross docking).