Transloading is the process of utilizing more than one mode of transportation as goods move through the supply chain. This means a logistics manager must plan out a route that gets the goods to their destination as quickly as possible, while managing available considerations such as available portage, taxes or tariffs, and overall cost. At first glance, it may seem counterintuitive to move goods in this manner, but as the global market has grown, transloading has become the standard in supply chain logistics.

Almost every shipment domestically will involve a truck to unload goods at their final destination, but the route those goods take beforehand could be in the air, over the water, or by rail. Having a 3PL company that truly understands and manages each and every step of this process is key to the timely delivery of organic fruits and vegetables, dry goods, or any type of goods that are in high consumer demand.

As e-commerce emerges as the consumer’s first choice for ordering goods, the need for transloading has become even more apparent. With the consumer having the ability to order almost anything directly to their front doorstep, logistics managers are faced with the fact that one mode of transportation simply is not a viable option to every destination. Transloading gives the supplier the ability to put their products into the hands of consumers in the most cost effective and efficient way possible.

Engaging a partner like Taylored Services, that fully understands this process, has the knowledge and experience in national transportation, dedicated trucking, drayage, brokerage, and intermodal is a necessity in today’s global market. In addition to Taylored Services representing the gold standard in logistics management by offering high-quality, efficient solutions combined with massive volume discounts through their small parcel carrier partners, Taylored Services has recently expanded their award-winning operations with a new state-of-the-art 100,000-square-foot facility in Edison, NJ.

Fast-Paced Growth

This recent update for the northeastern region is part of the company’s national expansion plan for the company’s fast-paced growth initiatives. Taylored consists of 18 total buildings across multiple, major U.S. ports and will now boast a footprint of over 4M sq ft. The company previously operated between Carteret, NJ, and Edison, NJ. The strategic choice of moving the offices adjacent to the already existing Edison 1 location will allow Taylored efficient communication and better management of client support between the two buildings.

Taylored has also just established its best-in class, tier 1 fulfillment operations in Savannah, GA. Over the past 10 years, Savannah has become one of the fastest growing major ports in the United States, making it a clear choice for distributors to include this into their location profile. As of 2021, the port was the fourth busiest seaport in the United States which made it a clear choice for the company’s next location. This facility will bring an abundance of state-of-the-art technologies and fulfillment capabilities to the East Coast—providing an excess of 300,000 sq ft of space where it will facilitate transloading, crossdocking, and wholesale and retail distribution services. The company will pioneer a world-class, Koerber cloud-based warehouse management system at this location that will include advanced automation through Locus Robotics.

“This is an exciting time for our company’s distribution expansion,” VP of Distribution and Fulfillment Mike Letzter said. “It will allow us to provide our clients with speed-to-market services on the East Coast and broaden the company’s national footprint for a tremendous competitive advantage in the industry.”

Taylored Services’ experience has given them valuable insight into store-bound freight optimization, allowing them to maximize each outbound shipment. They show your suppliers the best practices for preparing trucks and manage one of the largest cross-docks nationwide and move inventory quickly and efficiently through the supply chain.

tayloredservices.com
732-750-9000
sales@tpservices.com

Changing Keys: Making the Switch to Direct Selling

It should be the same in a resilient, responsive distribution center. “You want everyone to do their part when they’re supposed to,” Moore says. For instance, when a truck loaded with products arrives at the dock door, employees should be ready and able to unload it.

Of course, distribution centers face constraints and challenges that differ from those facing musicians. They have a set number of dock doors and employees, and only so much space for inventory. The continued proliferation of stock-keeping units (SKUs) means it’s nearly impossible for even the sharpest humans to efficiently track all items, making automation increasingly essential. Labor and driver shortages and shipping delays add more obstacles.

In addition, store replenishment times have tightened and become more frequent, and more consist of split cases, as growing numbers of retailers use their stores to fill e-commerce orders, says Reuben Scriven, senior analyst with Interact Analysis.

Thoughtful operational changes and technology solutions can help distribution centers tackle current challenges, build resilience, and boost responsiveness.

A starting point is ensuring the facility’s layout is as effective as possible, says Oleg Yanchyk, chief information officer and co-founder of Sleek Technologies, a freight procurement automation provider. Among other steps, this means assessing how to optimize the location of products and identifying ways to stage loads so drivers can efficiently drive in and out.

An engaged, productive workforce remains essential to most well-run, resilient distribution centers. While technology has become increasingly essential, few DCs are completely automated. In light of the tight labor market, operators need to focus on being a strong employer.

One way is simply to trust and respect workers and ask for their input before turning to outside consultants. “We often underestimate the people who are there every day,” says Ron Liebman, head of the transportation, logistics, and supply chain management practice with McCarter & English. “They’re logisticians, not just people in a warehouse.”

Distribution center operators also want to consider technology’s ability to make employees’ jobs easier and more enjoyable, as well as its ability to automate processes. Technology can boost retention. For instance, autonomous mobile robots (AMRs) that work with employees (co-bots) can transport products, cutting walking time for employees.

Effective supplier management, including the ability to quickly switch between vendors, can also boost resilience within a distribution center. Given ongoing supply chain disruptions, distribution centers need “secondary, flexible options,” Yanchyk says. If one supplier is unable to deliver, potentially delaying operations, another might come through.

Connecting purchasing and warehouse operations also can enhance operations. If purchasing isn’t buying in optimal quantities—perhaps because it lacks vital information—it’s more likely to purchase too little, risking delays, or too much, hindering efficient operations.

Even once automation is introduced, most systems have some capacity limits. Distribution center operators need to identify the orders that will move to automation and those that will be handled manually. “You need both automation and coordination,” Moore says.

Cross-docking and Scheduling

Just as airlines can ensure (most of the time, anyway) passengers will make connecting flights, distribution center operators need to coordinate their own operations with logistics. “To drive productivity, you need to increase the number of things that are cross-docked,” Moore says.

This requires a detailed understanding of inventory placement and capacity, such as loaders and pickers. Schedules need to be synched, so items unloaded at one end can quickly ship out from the other, rather than sit on the dock or inside the distribution center.

A common challenge is timely replenishment of pick spaces. That’s more likely to occur if activities within the warehouse are siloed and managed independently.

Instead, distribution center operators should be able to identify in advance, often using technology, when items will need replenishment. In addition to knowing inventory levels, this requires understanding the workload and schedule of the pickers.

Moreover, as retailers request more frequent shipments, the ability to wait days to unload a truck, because that’s when it best fits within the center’s schedule, is becoming more of a luxury. Instead, it’s more common to have to unload immediately, or close to it, because the products are going out in several hours.

When information flows between shippers, manufacturers, and logistics providers, so each can identify the actions it will take and when, resilience is enhanced. “Partnership is an overused term,” says Kristi Montgomery, vice president of innovation, research and development with Kenco Logistics.

But the more all parties can work together, the more they can boost value and responsiveness. For instance, the sooner Kenco learns a shipper is expecting significant growth, the more quickly the 3PL can implement solutions and technologies to facilitate that growth. Given that some technology solutions currently measure lead times in months—or longer—timely notification becomes critical. “It’s the whole concept of collaborative transparency,” Kristi says.

Similarly, accurate, thorough data on the number of SKUs with which a shipper is working, along with requirements around packaging and labeling, are essential to forecasting labor requirements. This is another step to ensuring efficient throughput.

Visibility and Connections

Along with operational changes, a few technology solutions are proving key to resilient DC operations today. Artificial intelligence and machine learning can provide visibility to products, allowing for better decision making. Distribution centers operators who know an upcoming component will be delayed can hustle to find a substitute or shift processes to accommodate the delay.

Real time data exchanges between the warehouse and logistics operations, generally using API connections, also have become essential. While API is common in many customer-facing solutions, slower EDI or file transfer solutions still are common in back-end systems like demand planning, says Christopher Deck, founder and CEO of Deck Commerce, a provider of a cloud-based order management system. That can hinder responsiveness.

“The name of the game is speed with respect to transferring data from one system to another,” Deck says.

Technology also needs to facilitate communication across sales channels. “Siloed distribution practices create blind spots that often leave available inventory on the shelves when demand swings do occur,” says Keith Brereton, director of client services with Tecsys, a supply chain management software company.

Supply chains need to recognize how markets are converging: Warehouses are fulfilling individual customer orders in addition to supplying retailers, while stores are picking, packing, and shipping like mini warehouses. Factor in drop shipping, click and collect, return logistics, and 3PL partnerships, and a technology layer that optimizes and distributes across channels becomes indispensable.

Collaboration and Connection

Flexibility is another component of distribution center resilience, and that’s driving interest in autonomous mobile robots (AMRs). “Retail changes all the time,” says Gary Allen, vice president of supply chain excellence with Ryder. Technology needs to be able to manage that variability.

Robots often are better at handling high numbers of SKUs than fixed systems, such as automated storage and retrieval systems (ASRS). They tend to be less expensive, as well.

Robots also can accommodate tighter turnaround times on orders. That has become critical, as delivery deadlines on retailers’ orders continue to shrink, including on truckload orders.

Another benefit: AMRs can work within existing DC infrastructures and relatively easily scale to meet peaks in demand. “AMRs have been the technology that’s made the biggest impact,” says Adrian Kumar, global head of operations science and analytics with DHL Supply Chain.

Because collaborative robots receive information from the warehouse management system and then work with humans to execute operations, it’s often possible to double productivity, Kumar says. For instance, the robot may have a screen that shows a picture of the item to be picked and the quantity. In addition, it will stop in front of the pick location, so pickers can easily see where the items they need are.

In contrast, employees trying to navigate a warehouse using radio-frequency guns usually need to understand an aisle numbering scheme like 10-03-04-08, or Aisle 10, Bay 3, Level 4, Slot 8—hardly intuitive or easy to learn. “A co-bot can help guide the associate to the location quicker,” Kumar says.

This capability helps explain the growth forecast for the market for the AGV and AMR market. Research firm LogistisIQ predicts it will top $18 billion by 2027, with a growth rate of about 24% for AGVs and 43% for AMRs.

The pandemic and related supply chain delays highlighted the risks of slashing or, in some cases, eliminating safety stocks. At the same time, amassing quantities of all products can be expensive and unwieldy. For key movers or critical products like medical devices, keeping safety stock nearby often is critical.

One cost-effective way to do this is through brokered warehouses, Liebman says. Computer platforms match companies with extra warehouse space across the country so they can store, for instance, 300 pallets for three months.

Visibility and connectivity enable the application of data analytics, another factor in building resilience. Technologies like machine learning and artificial intelligence can leverage data to predict demand weeks out, based on a range of factors. Instead of looking only at sales history, it’s now possible to consider social media, weather, and real-time sales data and then marry all the information together, Montgomery says.

A system can also assess how potential disruptions will impact demand and in what SKU categories, so retailers and distribution centers can adjust operations.

Digital twins can facilitate what-if and scenario planning, Montgomery says. This entails using data to create a digital version of the supply chain today and asking it to assess various scenarios: What happens if shipping ports shut down on the West Coast? What if a hurricane hits production facilities in Los Angeles?

Based on the analysis, the distribution center can optimize safety stock levels and the locations used to store different SKUs.

Self-distribution, Vertical Integration, MFCs

Some industries, like healthcare, have seen significant adoption of the self-distribution model as a way to gain “centralized, comprehensive control of their supply chains, from source to patient,” Brereton says.

As TechTarget explains, in a self-distribution model, companies purchase goods directly from their manufacturers, store products in their own warehouses and transport them through their own networks, cutting out the middleman.

“By altering their distribution management processes and going directly to manufacturers, health systems are able to buy strategically while safeguarding against bottlenecks at third-party distributors,” Brereton adds.

Because last-mile facilities like micro-fulfillment centers are increasingly replenished with individual items in addition to pallets, traditional upstream filling activities are moving downstream, Scriven says. He provides an example: a supplier ships T-shirts to large distribution center, where they’re unloaded and put into totes. From there, the T-shirts, still in the totes, move to a last-mile fulfillment center.

“Loading the totes is done upstream, where rents are lower,” he says. “When shipping items downstream, they’re already pre-loaded.”

Democratization of technology

Not only is technology playing an increasingly vital role in many distribution centers, but the “democratization of technology,” is allowing even smaller operators to implement it, says Bill Denbigh, vice president of product marketing for Tecsys.

For instance, while voice picking systems have been around for years, they previously required separate terminals and systems, that together often cost well into six figures. Now, most industrial mobile devices are based on the Android operating system. Warehouse management system (WMS) vendors are able to build voice prompts into their solutions simply by utilizing standard Android API calls.

Modern WMS solutions increasingly offer voice as a way to drive user efficiency, rapid system adoption, and user compliance, or following what the system says to do, he adds.

Down the road, blockchain or distributed ledger technology likely will gain greater adoption. “It can facilitate better demand planning because of the openness and transparency along the supply chain, and the removal of latency periods between partners,” Montgomery says. The lack of government standards has been a big factor in holding back implementation so far, she adds.

Openness, transparency, and immediacy help build resilient distribution operations that can anticipate disruptions and respond even before they occur.

“Like hockey great Wayne Gretzky, they can skate to where the puck will be,” Moore says.

Changing Keys: Making the Switch to Direct Selling

Transitioning from business-to-business to direct-to-consumer (D2C) fulfillment is an increasingly important competitive edge for manufacturers, sellers, and third-party logistics providers.

The initial change is in basic philosophy. Most providers go from worrying about bulk servicing thousands of units on palletized loads to managing the throughput time of thousands of orders requiring additional touches for picking and packing.

Several factors come into play when transitioning to a D2C model without exponentially increasing costs. The physical layout of your pick zones maximizes the space and creates an efficient picking environment for your associates, while choosing the right storage solution for commodities should allow for products and markings that are easily visible.

Inventory management is critical too, because having clean receipt, put away, replenishment, and cycle count processes in place keeps order fulfillment streamlined, efficient, and accurate.

Understanding the profile of the inventory that you are shipping is also important. For example, monitoring the velocity of products and utilizing that data in the slotting process will make your picking process operate more efficiently by reducing the pick path and distance for operators.

There is no way around implementing some level of technology to be a competitive D2C fulfillment operation. At the very foundation, a functionally rich warehouse management system seamlessly manages e-commerce’s fluctuating demands.

Also, it’s much easier to expand your automation solutions when you start with the right baseline efficiency. Then you’re not redefining your entire process to accommodate a new technology, which can be extremely time-consuming and expensive. It’s better to find solutions that modulate well, so that you are simply enhancing your efficiency with additional tech.

In short, having the right mindset, tools, and solid plan allows for an optimized process and smooth transition for the organization and its ops team.

– By Brian Kirst, VP Sales & Business Development, Synergy NA, SnapFulfil WMS

With many shippers diverting cargo ships from the Port of Los Angeles to Savannah, the Georgia Port Authority—the port in Savannah—is growing at a record pace. The port is already serving almost half of U.S. consumers and manufacturers. This rapid growth and shift in cargo requires freight and logistics companies to respond in order to keep up with demand.

THE SOLUTION

With that in mind, Tradition Logistics is proud and very excited to announce the opening of a new facility in Savannah, Georgia. Sitting just 5 miles from the Port of Savannah, this 311,265-square-foot facility is perfectly positioned to serve customers bringing cargo into Georgia.

This facility works as a multimodal hub with direct access to regional interstate systems, and has service to Class-I rail CSX line. Tradition Logistics can cross dock and/or store containers until they’re ready for distribution in record time, which improves inventory management.

Tradition Logistics offers drayage, and a full array of services under this one roof. We offer on-site short- and long-term warehousing with immediate access to your inventory. We have 7 acres of storage area for containers, and an under-roof rail spur, capable of handling 70-100 containers per day. Fulfillment services include: kitting, sub-assembly, reverse logistics, cross-docking, e-commerce, and inventory management.

This facility is a $12-million investment in the local community and brings many jobs with it. Along with serving as a hub for freight coming into Georgia, this facility will also be home to a new location for our freight management division, Freedom Freight Solutions.

Freedom provides additional capacity through our network of vetted carriers nationwide, in addition to our 300+ asset-based fleet under Tradition Transportation.

With its direct access to the Savannah port, regional interstate system, and CSX rail network, Tradition Logistics’ new Savanna facility is perfectly positioned to meet all your dock to distribution needs. Having all these services under one roof, means quicker turnaround times, which translates into reduced costs (demurrage and per diem), and less time waiting on your freight to hit the road.

To learn more:
email: jonathanhoyt@traditiontrans.com
phone: 260-209-0700
web: traditiontrans.com

Using multiple vendors can leave you vulnerable to inefficiencies and higher transportation spend. Here’s how to find the right consolidator for your business.

The planning and management that go into multivendor supply chains are an orchestration of many complex parts. The process for new and existing brands trying to get into big box retail requires close attention to detail, juggling multiple vendors, and managing numerous requirements for compliance.

Using multiple vendors can leave the shipper vulnerable to higher transportation spend, undependable delivery, and compromised customer relationships. It can be daunting.

The solution is letting an expert manage the process with a well-designed, customized retail consolidation program. Here are a few tips to help you find the right consolidator for your business.

1. Find the right transportation provider.

• Make sure the provider you are interviewing has a good track record and extensive experience in consolidation with major retailers.
• Is the provider currently working with any similar vendors or retailers? If they already have a good working relationship with some of the same contacts, this can be beneficial.
• Can they provide intermodal, truckload, LTL, managed solutions, cross-docking, and final mile solutions? Do they understand the required lead times for each? Be sure to ask what other value-added services are offered that can reduce overhead costs and turnaround times.

2. Harness the latest technology.

• Finding a provider that has the latest transportation and warehouse management systems, as well as onboard monitoring equipment for all their modes of transportation, is essential. Real-time visibility can help avoid problems, resulting in better vendor-, customer-, and carrier-relations by keeping everyone informed at all stages of the journey.
• New technology also helps avoid human error, including OS&Ds and unnecessary delays due to missing or unsigned paperwork.
• A top retail consolidator uses reporting and analytics to help forecast freight needs and monitor processes, as well as detect recurring issues for easy improvement.

3. Does the consolidator have a favorable compliance record?

On-time scheduling is one of the biggest hurdles for retail shippers. Meeting tight deadlines, following strict guidelines for appointment making, delivering, unloading and inspection require tenacious oversight. All these measures must be stringently executed and enforced to keep the wheels turning and costs down. A sound and customizable retail consolidation program with managed solutions does just that.

4. Efficient use of capacity saves money.

Truckload shippers who end up paying for empty cargo space can benefit from a well-thought-out consolidation program. Less-than-truckload shipments and partial shipments are also prime targets for reaping the benefits of such a solution. Consolidation means better use of space in a trailer and less handling.

5. Strategic planning and execution are key.

Strategic planning, execution, and final on-time delivery are the ultimate goals of any retail consolidation plan. Doing so correctly can result in a more efficient order process, improved compliance metrics, and full end-to-end visibility that provides all stakeholders with great peace of mind.

These tips for finding a retail consolidation program can be the springboard for a more efficient, cost-effective, and scalable supply chain process.

Contact Hub Group at 800-377-5833 to get started today.

Marty McFly and the rest of the “Back to the Future” crew predicted that this year—2015—would be the year for innovative vehicles like hover-boards. And though we’re still waiting on that, we can make phone calls without touching a button, print images in 3D, and start our cars without ever putting a key into the ignition. Flying DeLoreans can’t be that far away.

Why, then, has it been so difficult to find new and innovative ways to move physical goods from one place to another?

The problem is putting all the pieces together. Shipping managers deal with various procedures, carriers, equipment, destination types, and expectations. How do we synthesize a system that comes with so many variables and changing pieces?

Certain market leaders such as Stamps.com, Neopost, and Pitney Bowes have tried to create a single end-to-end logistics solution by acquiring various smaller companies that each provide solutions for different parts of the picture. Unfortunately, this is not enough.

Can we connect the technological dots? We have already bridged the gap, for instance, between carriers and e-commerce shopping carts, ERPs, and salesforce. But can we create a complete solution that brings the shipping industry into the digital age, making moving A from B to C as easy as 1-2-3?

In order to create a consistent end-to-end logistics system fit for an innovative and demanding society of customers who are used to one-click results, the solution needs to solve a multitude of issues:

Pricing. In 1980, President Carter signed the Motor Carrier Act, deregulating the trucking industry. This opened the door for carriers to set their own prices, spurring competition and lowering both prices and margins. This resulted in some incredibly complex pricing schemes. In short, it often takes a degree in advanced calculus to figure out how much it is going to cost to ship something, and that shouldn’t be the case. Simple, transparent pricing is imperative to the evolution of this industry. End-to-end solutions can’t exist without it.

Packaging materials. Every commodity is different, which means packing supply companies continue to print new boxes for every tiny order we process on e-commerce sites such as Amazon. Some e-commerce businesses claim they will consolidate orders to reduce materials, but the problem remains: If you need a box, a new one usually has to be printed. That’s slow, cumbersome, costly, and inefficient. We need an intelligent packing material that is inexpensive to manufacture, automatically protects the commodity, and is flexible enough to be adjusted to fit the most viable dimensions for the product being shipped.

Network re-balancing. As we mentioned, packing materials are expensive, bad for the environment, and usually wind up stuck at the destination until they are taken to the dump. We need an efficient network to recirculate reusable materials to reduce costs, improve their availability, and cut down on pollutants.

Independent crossdocking. Crossdocking supports the hub-and-spoke distribution model by allowing carriers to move goods from truck to truck efficiently. This allows carriers to ensure service to any destination. New startups diving into the logistics space are often limited by their inability to crossdock whereas one startup player, Cargomatic, is using local terminals within their network to crossdock so they can service more destinations and better serve their customers’ pickup and delivery needs. A complete solution must include crossdocking for the end-customer to have a positive experience.

Universal tracking. In this day and age of limited attention spans, we can hardly sit through a 30-second commercial, let alone wait for days or even weeks for a box to arrive at our doorstep. Thankfully, many carriers offer package tracking. This is important to keep us in-the-know in order to ease our impatience, but all the different systems to track packages being delivered via different carriers make it hard to follow. A one-stop shop to track all shipments, regardless of destination or carrier, is crucial.

Logistics systems are complex, and complex issues require complex solutions—in other words, time and hard work. Luckily, technology and innovation mean the promise of a complete shipping logistics system is much closer than a car that can go back to the future.

1. Know your business requirements. Before you design your facility, examine your books. The data will show you what to expect in terms of stock turns, returns, and volume, which is the starting point for determining the size of the warehouse, the storage capacity required, and the number of dock stations needed.

2. Be prepared for an onslaught of intermodal traffic. Look at the length and type of trailers coming in and out of your warehouse, and pay attention to whether or not intermodal traffic is increasing. Intermodal chassis are often a different height than standard trailers and may have an obstructed rear impact guard. It is important to make sure docks and restraints can accommodate both.

3. Allow extra space in the receiving area. The receiving area is one of the most important parts of the warehouse, and is often a hive of cross-docking activity. Working in a cramped space can cause injuries, and other profit-sapping mishaps.

4. Don’t make interior doors too big. Why waste energy? Don’t make your facility’s doors any larger than they have to be—particularly in cooler or freezer areas. If you occasionally need a larger opening, put one larger door into your layout and keep the others smaller.

5. Design safety in from the start. You don’t need to decide between safety and efficiency—they can go hand in hand. Make sure safety signage is always visible, but don’t rely on it alone. Provide foolproof products and processes such as impactable doors or interlocked dock controls.

6. Ensure the yard supports the warehouse. Warehouses require schedules for inbound and outbound shipments. Congestion outside the warehouse, caused by parking area constraints, will affect these activities. It is important to understand the capacity of your yard to avoid potential bottlenecks.

7. Separate pedestrian and forklift traffic. Signs and painted lines aren’t enough. About 110,000 forklift accidents occur each year, many involving pedestrians, according to OSHA. Physical barriers, both permanent and temporary, keep pedestrian and forklift traffic apart.

8. “Button up” your dock stations. Seals, shelters, and doors prevent contaminants from entering the building. A seal around dock stations saves energy, protects cargo, provides employee comfort, and improves the bottom line. Food manufacturers may consider vertical levelers in a “drive-thru” application. This allows trailer doors to remain closed until the trailer is positioned at the loading dock, providing an uninterrupted cold chain and additional level of security.

9. Take advantage of mezzanine opportunities. When a warehouse’s physical footprint is limited, it can be expanded upward using mezzanines to add capacity. New forklift technology and safety equipment designed specifically for elevated platforms—such as reciprocating barriers that can’t be open in both directions at the same time—make mezzanines a better and safer bet.

10. Protect your cargo from tampering. Trailers at the dock become an extension of your warehouse, so be sure to consider cargo security issues. Use interlocked controls that sense external tampering, and implement restraints that automatically “re-fire” if they lose proper engagement with the trailer’s rig.

Effective crossdocking requires continuous real-time visibility of shipments from supplier to end customer. Unfortunately, typical enterprise resource planning (ERP) systems don’t provide granular details specific to crossdocking transactions.

Tracking individual parcels—even between trucks within the same warehouse—is a must. Low visibility risks duplicate or delayed shipments, excess inventory, and added overhead from processing rogue shipments. Companies need to know the status of crossdocked items to control product flow and effectively troubleshoot problems.

Keep Your Priorities Straight

Operations aiming for best-in-class crossdocking performance need a solution that addresses these priorities:

• Visibility. Real-time shipment status, location, and delivery time information must be available to customers, suppliers, and 3PLs.
• Traceability. Solutions must provide up-to-the-minute historical records of shipping activity, down to the individual parcel level, to isolate errors and bottlenecks, and simplify troubleshooting.
• Compliance. Rules and standards need to be enforced, ensuring accuracy, timeliness, and approvals.
• Agility. Companies must be able to quickly reroute material in transit to meet changes in demand.

Know What to Look For

The following checklist will help you choose a solution that enables continuous key performance indicators:

• Advanced labeling. Labels must meet customer and 3PL requirements, and should include unique identifiers or parcel tracking numbers to facilitate visibility.
• Distinct tracking database. Information on crossdocked shipments should reside in a distinct database that provides an audit trail, including individual shipment status and a view of shipping activity spanning all suppliers.
• Mobile data collection devices. Crossdocking requires a coordinated team, so mobile data collection technology is essential. Handheld devices enable personnel to scan shipments slated for crossdocking, and the devices directly update the database.
• Supplier sweep support. Organizations with extensive distribution networks often want to extend the receiving process to suppliers to manage pickup, ensuring just-in-time receipt to the crossdock. Ideal crossdocking solutions support supplier sweep pickup of inbound materials.
• Validation and reporting. The system must enable a central administrator to perform end-of-day validation of materials on-hand and delivered, and support consolidation of information across suppliers and customers, down to the individual shipment.
• Returns. An ideal crossdocking solution creates unique identifiers that provide visibility and traceability for the returns process. Handheld data collection devices must also enforce compliance with returns policies.

Crossdocking follows the same basic rule as other data-driven supply chain practices: You can’t improve what you can’t control. To optimize performance, companies should complement their existing ERP system with integrated visibility, traceability, compliance, and agility capabilities. Otherwise, they risk multiplying the very inefficiencies that crossdocking is intended to address.

Tremendous pressure from global competition and just-in-time (JIT) operations in the marketplace has spurred many manufacturers to adopt a lean production philosophy—and a lean supply chain that supports that philosophy. An important element in the identifying and designing such supply chains is an effective line-haul/crossdocking end-user operation.

Crossdocking involves processing inventory or goods on incoming shipments so they can be easily sorted at a terminal, warehouse, or landing pad for outgoing shipments based on final destination to end user or distributor. The items are line-haul cleared as one shipment; moved from the incoming-vehicle docking point to the outgoing-vehicle docking point; then transported to the end user or distributor.

For example, business units headquartered in either Canada or the United States within 500 miles of the border should consider moving shipments by line-haul to crossdock facility and on to the end user. Many companies manufacture product in both the United States and Canada, duplicating their effort, risking product integrity, sourcing raw material and components from the same suppliers, and adding endless inventory to the bottom line—never mind the labor cost in managing that inventory.

Seamless Distribution

As companies strive to be more effective and cost conscious, many have taken distribution and crossdocking to another level by eliminating their current cross-border manufacturing and warehouse facilities. This allows them to secure product integrity and reduce major overhead expenses such as buildings, maintenance, and labor costs, while servicing the end user through seamless distribution. Having total control of customer orders and the ability to invoice the orders and control end-of-month target figures makes this operation favorable to many organizations.

Note that not only outbound shipments can be crossdocked, but also inbound raw materials and supplier components can be handled in this manner, resulting in a cost-effective and controlled distribution environment.

Inbound raw materials and components that are centrally crossdocked, then line-hauled to final destination, support Lean manufacturing and ensure JIT inventory for the organization’s needs and procurements goals.

A major consumer goods manufacturing organization based in Seattle, Wash., had major issues with inbound raw materials and component shipments being released by their East Coast suppliers. These orders were entered by purchasing, then released and tendered to common carriers with basically no tracking or correspondence from the supplier as to when the manufacturer could expect the product.

This organization was in the process of moving to JIT manufacturing, and the lead times of the raw materials and components weren’t going to further those goals. The costs of multiple LTL shipments were also adding up, and the lack of communication was a major factor.

The Seattle company identified where these valued suppliers were located, and developed a crossdocking operation. Suppliers released orders based on manufacturing requirements, and shipped goods directly to the crossdock location in Chicago. The crossdock facility documented the order details, then relayed them back to the company’s purchasing team, providing flexibility in loading the line-haul releases from Chicago to Seattle. The new process saved time and transportation spend, and gave the company more control.

Thinking Bigger

The landing pad concept can be used in strategic geographical locations, not only domestically but also internationally. These locations can service multiple needs, such as warehousing short-term product for tender; acting as a will-call destination serving a company’s field sales force or master distributor; and staging small and low-priority inventory for future needs.

In this economy, organizations are being forced to think outside the box for not only effective distribution practices as a cost-effective way of operating, but to be more efficient and customer-focused on service needs and staying far enough away from the competition.

Crossdocking is the process of breaking down a large shipment into smaller shipments and/or combining shipments for delivery, ideally within 36 hours. The more typical supply chain model of “store and rack” holds inventory in the warehouse, then in transit, and finally on the store shelf. Assume this cycle takes 90 days. Imagine the efficiency and savings if you could reduce this cycle to 60, 30, or 22 days. The bottom line can improve dramatically.

Operations teams need to be aware of what to expect, however, as they redesign their supply chain approach. Attention to lean methodology and metrics is critical to the longer term sustainability of managing inventory at reduced costs.

To achieve consistent and reliable performance, identify and benchmark your metrics. Benchmarking can include comparison to other internal metrics to eliminate unintended consequences in performance from an improvement in another area. It also includes external comparisons to peer groups, competitors, and industry standards.

The following five steps allow supply chain directors to define and compare performance against some of the strongest operations in the country.

1. Determine the right drivers. Focus on the two primary drivers that influence excellence: efficiency and quality.
2. Measure and monitor over extended time frames. Good weeks or months do not indicate excellence. Quarter-over-quarter and, ultimately, year-over-year data is the only way to measure sustainable performance.
3. Define efficiency. Select the most important factors that define operations efficiency, such as pallets per hour or case per hour. Avoid settling for more basic metrics— cost per pallet, for example. Many variables can skew cost-per-pallet results, so it is not the best indicator of operational excellence— although it is a popular piece of data among some managers.
4. Categorize efficiency factors. Efficiency drivers include: product shipped within 48 hours of receipt; live unloads processed in less than two hours; percentage of loads processed within must-arrive-by date. Other factors in the efficiency quotient include availability to unload beyond commitments, and building capacities set correctly to match throughput demands. A word of caution: the longer the metrics list, the less emphasis placed on drivers. Focus on drivers.
5. Define quality. Defining quality is more straightforward than defining efficiency. Most shippers and 3PL managers agree that there are two quality drivers: accuracy and damages. The concept of zero is the total focus: zero missed shipments, zero damages, and zero mislabeling. Stock shortages and inventory variances clearly indicate how well the inventory is being managed.

Associated advantages of managing a well-documented crossdocking operation include gainsharing with suppliers, legitimate incentive pay programs, managed transportation costs, and reduced footprint for unnecessary warehousing.

Finding the right logistics leaders who can manage at this level of sophistication can be a challenge, as shippers, distribution centers, and 3PLs embrace diverse approaches. Qualified partners do exist, however, and they make the supply chain infrastructure even stronger.

To improve throughput, you must minimize travel, footsteps, material handling distance, and freight touches. Discover how to increase cross-docking efficiency with these tips from Nelson Bettencourt, senior vice president, domestic products, at Houston, Texas-based global logistics company CEVA Logistics.

1. Handle each piece of freight only once. Moving the shipment directly from the source to the outbound load area eliminates wasted effort and time. As an added benefit, reduced handling also minimizes opportunities for product damage.

2. Make dock layout as compact as possible. Even if extra room exists, you do not want to increase travel time by using space that is not absolutely necessary.

3. Line up outbound loads effectively. Outbound load staging areas should be organized with the heaviest outbound loads on either side of the inbound freight source location. The next heaviest points should be just outside of the heaviest, and so on to the lightest outbound loads.

4. Consider timing. Just because an inbound truck arrives does not mean that it must be processed immediately. Work backward, loading the earliest outbound trailers first. Determine which inbound shipments to process based on the outbound schedule.

5. Keep freight visible. Store freight that won’t go out in the current load directly behind the staging area so dock workers can quickly and easily locate shipments.

6. Always review the inbound product quantity. Sometimes the heaviest load out from a particular vendor will be what is normally a light load out and you need to adjust an unload location for a short time. One of these adjustments can save 25 to 40 extended distance trips.

7. Match staff to shipment volume. Track direct labor productivity numbers along with pre-alerts of freight due to arrive. This can help create more efficient worker schedules.

8. Configure TMS properly. For transportation management systems, properly configuring shipping schedules, routing, and key performance indicator measurements creates benefits such as route and load optimization.

9. Keep the dock floor clean and organized. An orderly loading dock is imperative to maximize forklift speed without sacrificing safety. Minimizing the amount of freight on the dock provides forklift operators easy access to loading doors.

10. Use materials handling tools to speed movement. A section of gravity conveyor will allow cartons to travel directly from the unloading trailer to the loading trailer, eliminating travel time and extra handling.