SAP ECC 6.0 Extended Warehouse Management Enhances Cross-Docking

  • by Ashish Saxena, Senior Manager, Supply Chain Execution, Amazon
  • August 15, 2008
Understand the concept of cross-docking in logistics and warehousing scenarios and find out its main benefits. Learn how SAP ERP Central Component 6.0 Extended Warehouse Management can help you simplify and improve cross-docking in warehouse operations with these tips.
Key Concept
Cross-docking is a goods flow-through process in which inbound goods are directly used for shipping outbound orders, eliminating the need to store them in the warehouse. Warehouse planners or supervisors can make cross-docking decisions either in real-time during the receiving process to meet an existing shipping demand or they can predetermine cross-docking decisions based on planning for select outbound orders.

With the increasing demand for shorter delivery times and reduced inventory costs, perhaps you are considering cross-docking as a viable option to improve your supply chain and warehouse operations. SAP Extended Warehouse Management (EWM) in SAP ERP Central Component (ECC) 6.0 offers a comprehensive cross-docking functionality that is integrated with your warehouse module. Cross-docking is a process in which goods are shipped to the customer or destination directly at the time of receipt based on appropriate linkages such as inbound receipts that can fulfill outbound order requirements. Without cross-docking, goods are stored in the warehouse instead of being shipped immediately upon arrival.

Cross-docking could benefit your supply chain in several ways. Here are a few key advantages of cross- docking:

Inventory cost reduction: Cross-docking offers the perfect opportunity to ship goods without storing them in a warehouse, consequently lowering the inventory carrying cost and allowing you to buy only what is needed. However, a great partnership with suppliers is essential to meet delivery windows with frequent shipments.

Material handling cost reduction: Cross-docking helps reduce material handling and movement costs within a warehouse. While a normal warehouse process takes receiving, putaway, picking, and shipping to deliver to customers, cross-docking reduces the process steps to receiving and shipping.

Warehouse storage space: With cross-docking, goods are moving directly from the receiving area to the shipping area, bypassing the warehouse storage and hence reducing the storage space requirement.

Cross-docking supports JIT (Just-in-time) operations in a distribution environment: While JIT aims to have the correct inventory at the right time, cross-docking enables a shorter cycle time to ship goods upon arrival in the warehouse.

In this article, I’ll introduce cross-docking features in SAP EWM and provide several settings you’ll need to properly employ cross-docking for your warehouse. Based on my experience, I’ll walk you through the main configuration steps and offer key considerations and tips to get the most out of cross-docking functionality.

Ashish Saxena

Ashish Saxena is senior manager, supply chain execution, at Amazon. He was previously a senior director at Cognizant Technology Solutions and associate partner at IBM’s Supply Chain practice. He has more than 14 years of experience, including working in supply chain strategy, planning, execution, and technology in multiple industries.

An SAP SCM planning and execution subject matter expert, Ashish has been working with SAP for more than10 years, and has successfully delivered several large-scale global SAP projects. He has helped transform supply chains in wide range of industries, including automotive, retail, energy, consumer products, third-party logistics, and pharmaceutical sectors. His most recent focus is on supply chain digitization and analytics. 

In addition to advising and contributing to SCM Expert, Ashish is a regular speaker at the SAPinsider SCM conference. For information on other SAPinsider conferences, click here.

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