1. Corporate Office
2809 Millbrook Road
Raleigh, NC 27616
(919) 876-3667
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www.tompkinsinc.com
Tompkins Offices
Allentown, Pennsylvania
Atlanta, Georgia
Chicago, Illinois
Dallas, Texas
Irvine, California
Raleigh, North Carolina
Tompkins Associates International Limited
Cambridge, United Kingdom
Tompkins Associates of Canada Limited
Toronto, Canada
International Associates
Buenos Aires, Argentina
Crossdocking in
New Delhi, India
the ’90s
San Juan, Puerto Rico
Sao Paulo, Brazil
Sydney, Australia
M-20
Copyright 1998 Tompkins Associates.

2. Tompkins Associates
Executive Summary
Crossdocking - the fad of the moment. Or is it? When understood, the pursuit of a crossdocking
strategy is a common sense approach to warehousing. When misunderstood or misapplied, the
term is thought of as a catchall solution to every company’s attempt at cost reduction. The term
crossdocking is being used in any number of industries to describe any number of receiving activi-
ties. This monograph intends to clearly define crossdocking and help the reader develop a path
forward.
Section 1.0 presents the three different methods of crossdocking: manufacturing, distribution,
and terminal crossdocking. Section 2.0 explains the crossdocking strategies - how crossdocking
will work between two trading partners. Section 3.0 discusses crossdocking requirements. These
include information systems, space and equipment, and operational requirements. And finally,
crossdocking implementation is covered in Section 4.0.
This monograph attempts to provide a common sense approach to both a complex and simple
operational procedure. The next step is to read this information and start the process of greater
warehouse efficiency.
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3. Tompkins Associates
Table of Contents
EXECUTIVE SUMMARY ............................................................................................. i
1.0 Crossdocking Definitions and Methodologies ................................................ 1
1.1 Manufacturing Crossdocking ............................................................. 1
1.2 Distribution Crossdocking .................................................................. 2
1.3 Terminal Crossdocking ....................................................................... 3
2.0 Crossdocking Strategies .................................................................................. 3
3.0 Crossdocking Requirements ........................................................................... 4
3.1 Information Systems Requirements.................................................... 4
3.2 Space and Equipment Requirements .................................................. 8
3.3 Operational Requirements .................................................................. 9
4.0 How to Implement a Crossdocking Program ................................................ 10
4.1 Justifying Crossdocking ................................................................... 10
4.2 Designing Your Corssdocking System ............................................. 11
4.3 Implementing a Crossdocking Program ........................................... 12
5.0 Conclusion .................................................................................................... 13
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4. Tompkins Associates
1.0 Crossdocking ping). The ideal situation occurs when the
Definitions and finished goods flow directly from manufac-
Methodologies turing into the back of a truck at the dock.
This should be called current manufacturing
Crossdocking as an operational proce- crossdocking. The next most desirable situa-
dure has been around for many years. In fact, tion would be when finished goods flow di-
most warehouses have had an informal back rectly from manufacturing to a staging area
order crossdocking operation for years and for shipment later. This should be called fu-
years. A back order crossdocking operation ture manufacturing crossdocking. Of course,
occurs when the warehouse attempts to fulfill a challenge exists here in how far into the fu-
a back order with received product before the ture finished goods should be staged instead
product is ever stored in the warehouse. The of being placed in storage. The advantage of
warehouse has flagged the pending inbound both current and future manufacturing
receipt for a back order and knows that when crossdocking is the minimization of the fin-
the product is received, the warehouse should ished goods handling. A disadvantage of fu-
go get the back order and allocate product to ture manufacturing crossdocking is the
the back order. This process has been used amount of staging space required to hold the
over the years to quickly get back ordered future finished goods shipments. In fact, the
goods to the customer. This procedure has definition of future (two hours, four hours, one
not really been concerned with the other ben- day, two days?) should be established by trad-
efits associated with crossdocking. ing off the savings in handling versus the costs
There are three different methods of of space. Manufacturing crossdocking typi-
crossdocking. They are: cally applies only when full unit loads of the
same finished goods are shipped. But, cur-
1. Manufacturing Crossdocking rent and future manufacturing crossdocking
2. Distribution Crossdocking require a real-time warehouse management
3. Terminal Crossdocking system to manage the flow and staging of fin-
ished goods.
The following subsections describe each A challenge that needs to be addressed
of the crossdocking methods. with current manufacturing crossdocking is
the limitation of not having the opportunity
1.1 Manufacturing for placing finished goods on hold prior to
Crossdocking their being shipped. It would not be unusual
for a finished goods warehouse to be designed
Instead of placing finished goods from so that both current and future manufacturing
manufacturing into a finished goods ware- crossdocking could be utilized. Another cir-
house, they are dispatched to the dock for cumstance that should be included while dis-
shipment (sometimes this is called direct ship- cussing manufacturing crossdocking would be
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the reverse of direct shipping manufacturing When individual cases are being
crossdocking, direct receiving manufacturing crossdocked, these crossdocking applications
crossdocking. This (JIT) is where materials are most often conveyor sortation system-
are received Just-In-Time and go directly from based. It also would not be unusual for the
receiving to manufacturing without going to current and future categories to be divided into
storage. Once again, this receiving can be current/active, current/same day, and future.
done for either current production or future Here the current/active is dispatched into the
production. truck, the current/same day is in staging or on
the conveyor for release later in the day, and
future will be staged to be shipped when the
future becomes the current day.
Current Manufacturing Crossdock
Current/Active Distribution Center Crossdock
Current Manufacturing Crossdock
Figure 1.1: Manufacturing Crossdocking Current/Same Distribution Center Crossdock
1.2 Distribution
Crossdocking
Just as there is current and future manu-
facturing crossdocking, there is also current
and future distribution center crossdocking.
The differences here are that although full unit
loads are received, both full unit loads and Future Distribution Center Crossdock
individual cases can be crossdocked. Figure 1.2: Distribution Center Crossdocking
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1.3 Terminal Crossdocking partners. Crossdocking relationships can ex-
ist between any partner in the supply chain.
Terminal crossdocking is more of a truck- Raw materials can be supplied JIT to the
ing sortation and consolidation of orders than manufacturer, the manufacturer can crossdock
a warehouse/distribution center concept. An to either the distributor or the retailer, and the
example would be a customer that has ordered distributor can crossdock to the retailer. All
products that are distributed from two differ- relationships exist for two reasons: to reduce
ent distribution centers. The customer wants the cost of receiving at the receiving facility,
a single order receipt of the entire order. Typi- and to reduce inventory in the supply chain
cally, the unit loads are mixed unit loads and pipeline.
are often referred to as “crossdock loads.” This As mentioned in Section 1.0, one of the
means that the mixed unit loads are not going first steps in defining a crossdocking strategy
to be shipped from the distribution centers to is to define the appropriate crossdocking meth-
the customer but rather from the distribution odology. Concurrent with defining the appro-
centers to a mixing terminal where the two priate crossdocking methodology is the
portions of the order will be received, com- definition of a crossdocking strategy. The three
bined, and shipped together to the customer. crossdocking strategies are:
The potential benefits to be achieved via
crossdocking are very significant. The proper 1. Unsorted/Unlabeled Crossdocking
application of crossdocking can be very in- 2. Unsorted/Labeled Crossdocking
strumental in achieving continuous flow dis- 3. Sorted/Labeled Crossdocking
tribution. Let’s all use the same terms so that
we can properly understand the opportunity Each of these three strategies can apply to
being addressed. any of the three crossdocking methodologies.
Inbound product can be either sorted or
unsorted. The benefit to presorting the mer-
chandise is that the handling required by the
receiving party is reduced. It does require that
the shipper incur additional labor to sort the
product, but this additional labor is usually
less than the labor that would have been re-
quired to sort the product in the customer’s
Figure 1.3: Terminal Crossdocking
warehouse.
2.0 Crossdocking Inbound product can also be labeled or
Strategies unlabeled. Once again, the pre-labeling of
product will speed up the receiving process
Crossdocking strategies refer to how in the customer’s warehouse. The shipper will
crossdocking will work between two trading incur additional labor to bar code and iden-
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7. Tompkins Associates
tify all outbound cartons and unit loads. This cases, if the vendor is pre-sorting and pre-la-
procedure should also result in a net savings beling the product, the product is never re-
for the two trading partners. ceived at the customer Distribution Center
The first strategy is unsorted/unlabeled (DC). Instead the merchandise is shipped di-
crossdocking. In an unsorted/unlabeled rectly to the store. In other cases, the mer-
crossdocking operation, the inbound merchan- chandise is sent to a third party or pool
dise does not have a final ship-to destination distributor. In either case, the merchandise
label and the product has not been presorted has already been picked and identified by the
by the shipping partner. The manufacturer or vendor and, as a result, the receiving process
wholesaler/distributor picks the merchandise is streamlined.
for shipment and builds the shipping loads
based on the most economic and efficient 3.0 Crossdocking
methods for the shipper. When the product is Requirements
received, the customer must break down the
loads, sort the product, label the product for The key to any crossdocking operation
the final store destination and reload the truck. is the information systems that will support
The second strategy is unsorted/labeled the crossdocking operations. These informa-
crossdocking. In this strategy, the vendor la- tion systems will need to utilize automatic
bels all inbound merchandise with an out- identification technologies and Electronic
bound store label. When the customer receives Data Interchange (EDI) transmissions. Sec-
the merchandise, it has already been identi- ondary requirements will include space and
fied. The customer can place the goods on a storage and material handling equipment.
conveyor system and let the conveyor system And, of course, changes to the operational
sort the product. If the product is not placed procedures will have to occur so that
on a conveyor, the product is directed to the crossdocking can be supported. The follow-
staging location and is manually placed in that ing subsections describe each of these require-
staging location. The customer is providing ments.
the order consolidation of this inbound mer-
chandise with other merchandise that is await- 3.1 Information Systems
ing shipment. Requirements
The final crossdocking strategy is sorted/
labeled crossdocking. Inbound product is la- A successful crossdocking strategy re-
beled by the vendor and the vendor has per- quires that a company have a successful ware-
formed a pre-sort of the merchandise to build house information systems strategy. The
logical loads. The customer is then going to driver behind developing a warehouse infor-
crossdock the entire unit load upon receipt. mation systems strategy is the need for qual-
The vendor has essentially picked its Stock ity information with zero information lead
Keeping Units (SKUs) for the order. In some times. In short, what a warehouse informa-
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8. Tompkins Associates
tion systems strategy does is provide a com- tion transactions. Once these tools and
pany with the structure to support enablers are in place, the subsequent benefits
crossdocking. Figure 3.1 illustrates the model found in Figure 3.1 can be realized. These
for a warehouse information systems strategy. are many of the benefits or requirements as-
The three software tools used to develop this sociated with cross-docking.
strategy are Distribution Requirements Plan-
ning (DRP) software, Warehouse Manage-
Automatic Identification
ment Systems (WMS) software, and
Requirements
transportation software. WMS software is the
only software that is critical for crossdocking
success. The other software systems may pro- The bar code and associated Auto-ID
vide some added benefits, but their impacts equipment serve as an internal information
are minimal compared to the utilization of a accuracy enabler. The primary Auto-ID re-
WMS. The two information accuracy enablers quirement is that all inbound product have a
are EDI and Automatic Identification (Auto- bar code. If all inbound product are bar coded,
ID) technology. EDI ensures the accurate and then product identification can be done
timely exchange of information between trad- quickly and accurately. These benefits can
ing partners, and Auto-ID technology ensures be had with either a conveyorized or a non-
the same when conducting internal informa- conveyorized solution.
Figure 3.1: Warehouse Management System Strategy Model
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9. Tompkins Associates
Two pieces of information are required begin managing the process before product is
to make crossdocking a success. First, each physically received. This added functional-
inbound item must be identified by product ity further helps facilitate crossdocking.
or SKU number. Second, the case pack quan- Many functions occur prior to receiving
tity must be identified. These two pieces of that have a significant impact on the receiv-
information make it possible to count and ing operations. If visibility can be provided
identify all inbound product. The quickest and to these activities, then the warehouse can
most accurate way to identify and verify this begin the planning process prior to receipt.
information is through the bar code. If each Early visibility can maximize crossdocking
inbound case is bar coded and the case quan- opportunities, maximize dock door utilization,
tity or prepack quantity is bar coded, then ev- increase the turn time of the receiving area,
ery carton can be identified. assist in scheduling inbound freight, and pro-
The third bar coding application involves vide for better labor planning. A WMS can
the identification of unit load quantities. In a assist in providing this early visibility.
sorted/labeled application, the shipper has Many WMSs now have the functional-
built logical unit loads that have mixed SKUs ity to support the scheduling of inbound car-
and are ready to be cross-docked directly to riers. A WMS will not select a best method
the final destination. In this application, each for shipment, but a WMS can support manag-
unit load should be bar coded with a unique ing or scheduling of inbound freight once an
license plate. This uniqueness of the license inbound freight method has been selected.
plate will make it possible to crossdock these This allows the receiving department to slot
unit loads to a specific store location. carriers and maximize dock door utilization.
If the WMS is used to support the trans-
Warehouse Management
Systems portation function, then the WMS can be used
to evaluate carrier and vendor performance.
One of the keys to a successful Anticipated receipt times, carton misships,
crossdocking operation is a Warehouse Man- missing or invalid purchase orders, etc. can
agement System (WMS). A WMS is the in- all be tracked, and it is possible to create a
tegration of bar coding technology, Radio vendor and/or carrier performance and com-
Frequency (RF) communications equipment, pliance program.
hardware and software. A WMS manages all The accuracy of incoming receipts iden-
internal information flow in a distribution cen- tification and subsequent item tracking is criti-
ter. Whereas the role of the bar code is to cal to the success of any crossdocking
quickly and accurately identify all inbound operation. Accordingly, a WMS must provide
cases, the role of the WMS is to manage the error-free tracking from receipt through stor-
flow and direct the crossdocking activities. In age to shipment. Receiving consists of three
recent years, the WMS has also been able to primary tasks:
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10. Tompkins Associates
1. The receipt of items into the company sist in the pre-receiving process. The down-
warehouse loading of detailed shipment information
2. A quality assurance hold for some from the host system to a WMS would most
items quickly and accurately translate this infor-
3. The staging of material for putaway mation into usable information.
A second functional requirement of a
Receiving is the operation that requires WMS is that the WMS be self-checking. All
the highest level of information integrity. If receipt information that is entered into the
deficiencies occur in the receiving operation, WMS should be entered without knowledge
then these mistakes will occur not only in of what the actual answer should be. For ex-
crossdocking but also throughout the opera- ample, the WMS should ask for a stock num-
tion. The principal challenge with receiving ber to be entered into a handheld unit. The
is that the WMS must rely on inbound infor- WMS should not merely display the antici-
mation that has been generated by an external pated stock number for the receipt and ask the
source. This requires that the receiving op- operator to verify that number. Any time the
eration be self-checking and that all receiving receiving operator is asked to merely verify a
information be validated. In operations where number, there is the chance that the receiving
the operator must override the system, the operator will concur with the system recom-
override should be noted and an effort should mendation and not actually check the stock
be made to ensure that the cause of the over- number. This is especially true when the
ride is understood. WMS is asking for an inbound unit, case, or
The receiving process begins with the carton total.
downloading of detailed receiving informa- To further support self-checking, infor-
tion from a host computer expected-receipts mation that is entered into the WMS that the
file. The receiving process ends with the stag- WMS identifies as wrong should be re-entered
ing of goods for putaway or the crossdocking by the receiving operator. If the second entry
of that inbound product. The following are of this information matches the first entry, this
functionality issues to consider when design- information should be accepted as correct. If
ing a WMS to support crossdocking. the second entry does not match the first en-
One of the primary receiving require- try, then the receiving operator should be asked
ments of a WMS is to have accurate receipt to enter the information a third time. The
information with advanced notice of the an- above discrepancies should be noted in a log
ticipated receipts. Advanced shipping notice and follow-up steps should be made to ensure
(ASN) information that can be downloaded that these problems do not continue to occur.
to a WMS will facilitate quick and accurate A final functional requirement is the need
receiving operations. ASNs that can be down- to reduce the time product spends in staging.
loaded to a WMS prior to receipt can also as- After the incoming receipt’s bill-of-lading has
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11. Tompkins Associates
been checked, the warehouse must sometimes vide a Shipment Status Message. A Shipment
wait until quality control completes inspec- Status Message from the carrier will allow for
tion, purchasing or planning rectifies discrep- better pre-receipt planning.
ancies, operators are available, or space is A typical approach as to how EDI can
found to store or stage materials. help facilitate crossdocking would be as fol-
These scenarios, coupled with the fact lows. The shipper’s internal system sends an
that most warehouses suffer from a chronic EDI bill-of-lading to a carrier and an ASN to
lack of staging area, require that product move the customer. The carrier electronically ac-
quickly and accurately through staging. A knowledges receipt of document, provides
WMS minimizes the time product sits in stag- electronic tracking information as the ship-
ing because of operator-directed putaway and ment moves towards its destination, and is-
system-selected putaway locations or sues an electronic freight bill to the shipper.
crossdocking lanes. A WMS minimizes stag- The customer acknowledges receipt and the
ing times by monitoring the time product sits crossdocking operations can begin.
in staging and by working to create a continu- The unfortunate thing about EDI is that
ous flow of material into and out of staging. many companies do not have EDI capabili-
In short, a WMS monitors staging to reduce ties. One potential solution to this challenge
the total cumulative time products spend in would be the use of two-dimensional bar
staging. codes. A two-dimensional bar code is a bar
code that contains a significant amount of in-
Electronic Data Interchange formation. In fact, a two-dimensional bar code
is able to contain all of the information found
EDI is the electronic transmission of in a bill-of-lading or ASN. This single bar
standard structured documents between com- code is scanned and all of the shipping infor-
puter applications in two organizations or re- mation is immediately uploaded to the WMS
mote sites of the same organization. Quite or host business system. The two-dimensional
simply, EDI is one computer communicating bar code is valuable in applications where the
to a second computer electronically. EDI, as shipper cannot provide EDI transmission, but
we shall see, is one of the critical elements of advanced shipping information is important
any cross-docking program. to maximize crossdocking opportunities.
One of the most important EDI docu-
ments is the advanced shipping notice (ASN). 3.2 Space and Equipment
An ASN is an electronic document that will Requirements
provide the customer with the visibility of
what was shipped. The ASN will help deter- Crossdocking operations require that
mine potential crossdocking opportunities and there be an adequate amount of staging space.
will also help in crossdock scheduling. In The crossdocking staging area must be large
addition to the ASN, shippers can also pro- enough to provide for a direct flow of goods
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between receiving and shipping. Sometimes can be placed on a conveyor, and the conveyor
this flow is automated and is accomplished can handle the sortation of the product and
through the use of conveyor technology. Other the diverting of the product to the appropriate
times, the flow is manual and is the result of shipping door. If merchandise is received and
lift trucks and pallet jacks moving the mer- it is not pre-labeled, the merchandise will need
chandise between the receiving and shipping to be labeled and then placed on the conveyor
door. In either case, the distance traveled for sortation. The benefit of the conveyor sys-
should be minimized. These two methods tem is that the receivers can place the goods
have minimum staging space requirements on the conveyor as they are received and in-
needed to accomplish current crossdocking. crease the turn times of the crossdocked prod-
Once these minimum space requirements uct. The second advantage is that the conveyor
are met, then the justification for all additional can take advantage of the overhead cube and
staging space is the result of a reduction in serve as a holding area for future crossdocked
material handling costs. Assuming that the product.
current operations can support current
crossdocking, future crossdocking may or may 3.3 Operational
not require additional staging space. As dis- Requirements
cussed earlier, the crossdocking methodology
that is used can have an impact on the space For a crossdocking program to be suc-
requirements. Current crossdocking requires cessful, the vendors and carriers must provide
less staging space than future crossdocking. reliable advance information. Accurate infor-
The more hours of future crossdocking re- mation helps streamline the receiving process
quired, the more staging space that is required. by minimizing the number of checks required
The square footage requirements for fu- and by allowing a high degree of certainty in
ture crossdocking operations can be mini- receipt planning. If the vendor and/or carrier
mized by using the vertical cube. Sometimes cannot accurately provide this advance infor-
pallet racks, drive-in/drive-thru racks, carton mation, the opportunity to effectively
flow racks, and/or push back racks are used crossdock is diminished.
to increase the density of product staged in A vendor and carrier certification pro-
the receiving staging area. It must be remem- gram will help improve inbound information
bered that the intent of these storage methods accuracy. For vendors, the following infor-
is for staging and not short-term storage. mation should be tracked:
Companies must be careful not to turn the
staging areas into storage areas. n Carton count accuracy
Conveyors are one way to reduce some n Misships
of the staging requirements and also to speed n Inbound carton damage
up the crossdocking operations. Pre-labeled n Missing labels
merchandise that is received from a vendor n On-time shipments
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n Back orders for you to build better partnerships with your
n Information completeness vendors and customers? These are just a few
of the questions that you must ask. In reality,
This information should be tracked by most of us have very specific reasons for at-
order. When a vendor shows high levels of tempting crossdocking. After we have an-
accuracy and competency in all of the above swered these questions, we are then ready to
categories, that vendor is a candidate for move forward.
crossdocking. For a vendor to be a candidate The implementation of a crossdocking
for crossdocking, that vendor must exhibit a program is not difficult. The first step lead-
high degree of order picking accuracy and ing towards a successful implementation is to
must properly label all inbound freight. understand what crossdocking is all about and
For carriers, the following information to define your approach to crossdocking. That
should be tracked: is what these first four sections have conveyed.
Once a basic understanding of the technology
n Inbound schedule adherence has been developed, the following steps should
n Misships be followed to successfully implement a
n Damage crossdocking program.
n Carton count accuracy
n Advance Shipping Notice (ASN) ac- 4.1 Justifying
curacy Crossdocking
The principal piece of information that Crossdocking is sometimes viewed as a
is tracked for carriers is shipping information win/lose proposition. The companies on the
accuracy and schedule adherence. It is up to receiving end of the crossdocking operations
the vendor to accurately pick the order. It is are the winners, and the companies having to
up to the carrier to get the order to the right supply the crossdocked goods are the financial
customer at the right time. losers. In a JIT environment, many times the
inventory reduction in the manufacturer’s plant
4.0 How to Implement a has merely been relocated to the supplier’s
Crossdocking Program warehouse. Many times the retailer has pushed
back on the manufacturer or distributor addi-
The first step toward implementing a tional packaging, handling, palletizing, and/or
crossdocking program is to define your labeling requirements. In essence, the retailer
crossdocking needs. Why do you want to do is telling the manufacturer or distributor to
crossdocking? Will there be potential space, make the merchandise floor ready. Merchan-
inventory, or labor savings? Will crossdocking dise prepared in this manner is a boon to the
give you a competitive advantage in the mar- retailer, and many times a significant cost to
ketplace? Will crossdocking make it possible the manufacturer or distributor.
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With this as the setting, how do we go ings and the partners both share in the sav-
about justifying crossdocking? How do we ings, then a crossdocking solution has been
create a win/win environment where both trad- economically justified.
ing partners reap economic benefit? How do The development of a cost for an activ-
we move crossdocking from theory to prac- ity is principally an engineering activity. En-
tice? gineering must assign a cost to each unit of
The first step in the economic justifica- activity and then calculate the net potential
tion process is to define the costs and savings savings between the two trading partners.
associated with crossdocking. This assign- The approach you take to justify
ment of costs is sometimes called activity- crossdocking is also dependent upon whether
based costing. For each activity, a cost is you are the supplier or purchaser of the goods.
assigned to that activity. For example, there If you are the purchaser of the goods, gener-
is a cost assigned to building prepacks in the ally crossdocking will be a positive develop-
distributor’s warehouse. On the receiving end, ment. Any time a value-added process can be
there is a savings associated with not having performed with a high degree of accuracy by
to pick these prepacks. The following is a list your vendor, you are generally reaping eco-
of costs that might be associated with a typi- nomic benefit.
cal receipt by a retailer. If you are the supplier trying to imple-
ment a crossdocking program, you must also
n Inventory carrying costs assess the qualitative benefits associated with
n Receiving handling costs crossdocking. By offering crossdocking to
your trading partners, will you generate more
n Paperwork transaction costs
sales? Will you develop more loyalty with
n Labeling costs
your customers? Is crossdocking going to be
n Storage handling costs
a business requirement with this customer in
n Picking costs
the future? Are your competitors looking at
n Packaging costs
crossdocking? These questions, if answered
Space costs positively, will lead to economic benefits in
the future.
To develop an activity-based cost, these
costs would be summarized as a per unit cost 4.2 Designing Your
to distribute that particular type or class or Crossdocking System
department of merchandise to the stores. A
cost would then be determined to distribute Now it is time to design your cross-dock-
this merchandise on a per unit basis if it was ing system. If your system does not require
crossdocked. Finally, a per unit cost would any physical redesign, this step can be skipped.
be calculated for the vendor to perform the In most crossdocking projects, a redesign of
crossdocking activities. If there is a net sav- the receiving area is required.
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Before any redesign can begin, the op- The third step deals with identifying al-
erational and business procedures related to ternative facility, equipment, procedural, and/
crossdocking must be documented. This or personnel plans which will maximize the
methodology will serve as the blueprint for crossdocking opportunities. From these al-
the crossdocking operations function. Once ternative crossdocking plans-of-action will
this has been documented, then the physical come the specific time-phased plan-of-action
redesign efforts can begin. Let’s look first at to be recommended for meeting the warehouse
the design of a crossdocking facility from the requirements over the given planning horizon.
purchaser’s perspective.
The first step involves obtaining and de-
4.3 Implementing a
Crossdocking Program
veloping scaled drawings of the areas that will
be affected by crossdocking. This is gener-
The first step in the implementation ef-
ally the receiving/staging area. The accuracy
fort is to identify potential crossdocking part-
of the drawings should never be assumed. It
ners. The easiest partners to begin a
should always be physically verified on the
crossdocking program with are companies that
warehouse floor.
already are crossdocking. Experienced
The existing warehouse equipment crossdocking partners will help speed up your
should be identified and documented. The la- learning curve. They will have already learned
bor complement of each area has already been the basics of crossdocking and will be able to
calculated during the activity-based costing, share their insights with you.
but should be re-validated during this step. One of the most difficult questions to
More specifically, the general responsibilities answer when developing a crossdocking pro-
should be documented for each person af- gram is what information should be shared
fected. between trading partners. Do you share
The next step involves defining materi- weekly sales volumes? Do you provide this
als to be crossdocked in the warehouse and by store, region, or as a corporate-wide sum-
the volume anticipated during the planning mary? As a manufacturer, do you share your
horizon. Forecasts or production schedules manufacturing schedule with your suppliers?
should be used to predict the storage volumes The answer to these questions is gener-
and turnover rates of each category over the ally “yes.” You need to share as much infor-
planning horizon. Items to be crossdocked mation as possible to allow your trading
should be classified by their material handling partners to maximize their production or dis-
and staging requirements. These requirements tribution capabilities. The closer they can get
should be reflective of the operational to minimizing their costs associated with
crossdocking procedures that have already crossdocking, the bigger the economic sav-
been defined. ings for both trading partners.
Crossdocking in the ’90s Page 12

16. Tompkins Associates
5.0 Conclusion
Crossdocking - the fad of the moment.
Or is it? Crossdocking is not new. What’s
new is the industry’s current fascination with
the topic. Crossdocking can provide signifi-
cant benefit to most every type of warehous-
ing operation. The key to a successful
crossdocking initiative is to understand the
technology, define your opportunities, and to
then embark upon an implementation.
Crossdocking in the ’90s Page 13