Cross dock fuels growth at Dots

By banking on a combination of cross-docking and flow-through distribution to rapidly provide its customers with the latest fashions at affordable prices, the retailer has emerged as a force to be reckoned with in a highly competitive retail landscape.
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VIEW THE SLIDE SHOW and see how the combination of cross-docking and flow-through distribution fuels growth at the Ohio-based fashion retailer Dots

By Maida Napolitano, Contributing Editor
February 24, 2011 - LM Editorial

KEYS TO SUCCESS
According to Akey, installation of the automated equipment and software was only half the battle.


The true key to a successful cross dock is the automated exchange of information through EDI between Dots and its many vendors even before the product physically arrives at the receiving door.

Dots’ IT department had the unenviable task of getting its many vendors and suppliers onboard with EDI. “The EDI team has now transitioned a significant portion of our vendors to EDI, representing about 50 percent of the units processed with the goal of impacting 80 percent of units this year,” reports Akey.

Dots also dedicated a substantial amount of resources on extensive training and building job aids for its internal allocation and merchant teams. “These job aids guide the vendors to identify the best way to pack a purchase order (PO) based on a category and allocation plan,” says Akey. “Everything begins with the correct PO. If the PO is not written correctly or if the vendor ASN does not match, everything stops.”

Opportunities to build cross-dock cartons are also identified at this point. Akey lists denim, fall sweaters, outerwear, footwear, and other bulky items that tend to quickly fill store cartons as naturals for cross docking.

HOW THE DOTS SYSTEM WORKS
The new operation is a blend of the most advanced conveyor and mechanical technology with the latest systems in information processing and control software. It is this combination of hardware and software that allows the retailer to achieve its goal of same-day distribution.

A vendor ASN is received either via EDI or e-mail 24 hours in advance of the physical merchandise arriving. Once allocations are received, cartons are unloaded onto one of six receiving conveyors. They flow easily through the system with either the vendor-applied License Plate Number (LPN) or, in the case of manual ASNs, LPNs that have been printed onsite and have been manually applied.

Cartons then flow quickly to the merge and shipping sorter where they can be diverted to one of 14 possible destinations: eight shipping lanes, one automated print-and-apply lane, two unit sorter induction lanes, one VAS lane, one new store/storage lane, and one no-read lane.

In the old system, Dots had been cross docking more—up to 45 percent of its unit volume. With the new unit sorters in place, however, it became a strategic decision to more precisely flow merchandise to stores based on specific needs up until the point of allocation while still creating an efficient, cost effective outbound carton.

“As we’ve done more analysis of each store and its sales history, we’re replenishing only what that store actually needs,” says Akey. “That may sometimes be less than a cross dock carton.” As a result, there is now a smaller ratio of units being cross docked, from 45 percent in 2005 down to 20 percent in 2010, and more units (up to 80 percent) being processed through the unit sorter.


Cross docking in the year 2011

 
 Steve Haskell, VP,
SDI Industries, Inc.

Q: What technological developments have enabled the adoption of cross docking today?
A: “The mechanics for automated cross docking have always been there. It’s just become faster and cheaper. The technological development is more on the IT side than on the mechanical side.  Information capabilities are so amazing now that you can communicate with suppliers easily, quickly, and commonly and that allows you to be able to tell them exactly what you want and when you want it.”

Q: What is the key to successful cross docking?
A: “You have to have good relationships with your trading partners. First, you have to be able to tell them how to pack what you want. Second, the partner has to be able to document what they’ve done and get it to you, so that when you see the product at the door you know what to do with it.”

About the Author

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Maida Napolitano
Contributing Editor

Maida Napolitano has worked as a Senior Engineer for various consulting companies specializing in supply chain, logistics, and physical distribution since 1990. She’s is the principal author for the following publications: Using Modeling to Solve Warehousing Problems (WERC); Making the Move to Cross Docking (WERC); The Time, Space & Cost Guide to Better Warehouse Design (Distribution Group); and Pick This! A Compendium of Piece-Pick Process Alternatives (WERC). She has worked for clients in the food, health care, retail, chemical, manufacturing and cosmetics industries, primarily in the field of facility layout and planning, simulation, ergonomics, and statistic analysis. She holds BS and MS degrees in Industrial Engineering from the University of the Philippines and the New Jersey Institute of Technology, respectively. She can be reached at .(JavaScript must be enabled to view this email address).


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