Cross Docking in SAP Pavan Kumar Kulkarni (361787)

Contents

1 Introduction............................................................. ................................3 2 Features................................................................. ..................................3 2.1 Advantages of CrossDocking.................................................................. ............3 2.2 Disadvantages of CrossDocking.................................................................. ........3 3 Types of Cross Docking.................................................................. ..........3 4 Cross Docking in SAP warehouse management.......................................4 4.1 Benefits................................................................. ................................................5 4.2 One-Step Cross Docking:................................................................. .....................5 4.3 Configuration Steps for One step cross docking..................................................6 4.4 Two-Step Cross Docking:................................................................. .....................8 4.5 Configuration for two step Cross Docking...........................................................9 4.6 Cross-Docking Monitor.................................................................. .......................9 4.7 Transactional Process.................................................................. .......................10

1 Introduction

Cross-docking is a practice in logistics of unloading materials from an incoming semitrailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between. This may be done to change type of conveyance, to sort material intended for different destinations, or to combine material from different origins into transport vehicles (or containers) with the same, or similar destination. 2 Features

.. Cross-docking operations may utilize staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship.

2.1 Advantages of Cross-Docking

.. Streamlines the supply chain from point of origin to point of sale

.. Reduces handling costs, operating costs, and the storage of inventory

.. Products get to the distributor and consequently to the customer faster

.. Reduces, or eliminates warehousing costs

.. May increase available retail sales space.

2.2 Disadvantages of Cross-Docking

.. Potential partners don't have necessary storage-capacities

.. or an adequate transport fleet to operate Cross-Docking

.. Need of adequate IT-System

3 Types of Cross Docking

There are a number of cross docking scenarios that are available to the warehouse management. Companies will use the type of cross docking that is applicable to the type of products that they are shipping. Manufacturing Cross Docking This procedure involves the receiving of purchased and inbound products that are required by manufacturing. The warehouse may receive the products and prepare sub-assemblies for the production orders.

Distributor Cross Docking This process consolidates inbound products from different vendors into a mixed product pallet, which is delivered to the customer when the final item is received. For example, computer parts distributors can source their components from various vendors and combine them into one shipment for the customer.

Transportation Cross Docking This operation combines shipments from a number of different carriers in the less-than-truckload (LTL) and small package industries to gain economies of scale.

 Retail Cross Docking This process involves the receipt of products from multiple vendors and sorting onto outbound trucks for a number of retail stores. This method was used by Wal-Mart in the 1980's. They would procure two types of products, items they sell each day of the year, called staple stock, and large quantities products which is purchased once and sold by the stores and not usually stocked again. This second type of procurement is called direct freight and Wal-Mart minimize any warehouse costs with direct freight by using cross docking and keeping it in the warehouse for as little time as possible.

Opportunistic Cross Docking This can be used in any warehouse, transferring a product directly from the goods receiving dock to the outbound shipping dock to meet a known demand, i.e. a customer sales order.

4 Cross Docking in SAP warehouse management

The term cross docking refers to moving product from a manufacturing plant and delivers it directly to the customer with little or no material handling in between. Cross docking not only reduces material handling, but also reduces the need to store the products in the warehouse. In most cases the products sent from the manufacturing area to the loading dock has been allocated for outbound deliveries. In some instances the products will not arrive at the loading dock from the manufacturing area, but may arrive as a purchased product that is being resold or being delivered from another of the companys manufacturing plants for shipment from the warehouse.

http://www.pwhfz.com/wp-content/uploads/2009/01/cross-docking.jpg

4.1 Benefits

Many companies have benefitted from using cross docking. Some of the benefits include: .. Reduction in labor costs, as the products no longer requires picking and put away in the warehouse.

.. Reduction in the time from production to the customer, which helps improve customer satisfaction.

.. Reduction in the need for warehouse space, as there is no requirement to storage the products.

Cross Docking Movements: When cross docking decision is made before material arrives, the movement can be processed as a one-step or two-step cross docking process.

4.2 One-Step Cross Docking:

Movement process directly from the inbound goods-receiving area to the outbound goods issuing area. For one-step cross docking to be active, check the configuration for the warehouse to ensure that the two-step cross docking indicator is not set. So there will not be any Cross-dock storage type required. This can be a opportunistic cross docking, transferring a material directly from goods receiving dock to the outbound shipping dock. After due configurations for one -step system process steps are.. You need to create either Put away TO/Pick TO and then system checks the cross doc

config and cancel the TO and create a new TO from 902 to 916. and also updates in the document flow. This you can do without Cross dock monitor.

http://help.sap.com/erp2005_ehp_02/helpdata/en/4d/f48a3eacd49076e10000000 a114084/TEMPLATE_image002.gif

4.3 Configuration Steps for One step cross docking

Material with this movement indicator can be directed to different interim storage type. SPRO..LE..WM..Master Data..Material..Define Special Movement Indicator.

SPRO..LE..WM..Master Data..Material..Define Storage type V_T3010

SPRO..LE..WM..Interface..Define Movement type This is used to ensure that reference movements with the special movement indicator can be assigned to warehouse movement types eg 968.

Activate storage type search SPRO..LE..WM..Strategies..Activate Storage type search..Define search Sequence

V_T334T

With this config system will search for source storage types to pick the requested quantities. 4.4 Two-Step Cross Docking:

When a link is created between an inbound and outbound delivery as part of a cross docking decision. If system active for two-step process, the system will create two transfer orders: 1) A transfer order for the inbound delivery materials from the goods receipt storage type (902) to the cross docking storage type (XCD). 2) A transfer order from the cross docking storage type(XCD) to the goods issue storage type(916). http://help.sap.com/erp2005_ehp_02/helpdata/en/32/47503e30a9d549e10000000 a114084/TEMPLATE_image002.gif

4.5 Configuration for two step Cross Docking

Configure for planned and opportunistic cross docking for the warehouse and the storage type. IMG> Logistics Execution> Warehouse Management> Cross Docking> General Setting> Maintain Warehouse Level settings. The next configuration step is to confirm that a movement type that is to be used for cross docking is set to allow cross docking. IMG> Logistics Execution> Warehouse Management> Cross Docking> General Setting> Define Cross-Docking Relevancy for movement Types. The CD Relevant indicator should be set for movement types to be used cross docking. Create a storage type relevant for cross docking. Logistics Execution . Warehouse Management . Master Data . Define Storage Type

4.6 Cross-Docking Monitor

Transaction: LXDCK or SAP> Logistics> Logistics Execution> Cross Docking> Cross Docking Monitor

This process uses the cross-docking monitor, a tool to match incoming and outgoing materials. After logging onto the cross-docking monitor, you will see the most current warehouse situation and can choose the warehouse in which to work as well as which documents to consider for cross-docking options.

Inbound delivery displayed in the cross doc monitor.

Outbound delevary in the cross doc monitor.

4.7 Transactional Process

... .. Create outbound delivery.

.. Create inbound delivery.

.. Plan with cross-docking monitor.

Use the planning tool of the cross-docking monitor to analyze the crossdocking opportunities for selected planning documents and create cross-docking decisions. These cross-docking decisions may or may not be based on the system recommendation. You can either accept the system-recommended decisions or view more details. Cross-docking decisions are carried out in normal processing within the warehouse. If FIFO is important, there is a configuration option to ensure FIFO rules are not violated. .. Post goods receipt for inbound delivery.

For more information on cross-docking planning, see the SAP Library under SAP R/3 Enterprise . Logistics . Logistics Execution . Inbound Process . Goods Receipt for Inbound Delivery . Goods Receipt . Goods Receipt Posting. .. Create transfer order for inbound delivery.

A transfer order (TO) based on cross-docking decisions is executed in the same way as a standard TO. When the Transfer Orders are created, the decisions are executed. .. Confirm transfer order for inbound delivery.

A warehouse worker moves the relevant goods to the cross-docking storage type and confirms execution. .. Create transfer order outbound delivery.

A transfer order (TO) based on cross-docking decisions is executed in the same way as a standard TO. When the Transfer Orders are created, the decisions are executed. .. Confirm transfer order for outbound delivery.

A warehouse worker moves the relevant goods to the cross-docking storage type and confirms execution. .. Post goods issue.