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Cross Docking in SAP S/4HANA EWM

Updated: Jun 9, 2023

What Opportunistic Cross Docking?

  • In opportunistic cross-docking, you first work with standard inbound and outbound deliveries and start the standard goods receipt process or goods issue process. You determine the cross-docking relevance after the goods have entered the warehouse or before they leave it.

  • Cross Docking is a lean Supply Chain Model that involves the immediate to faster transfer of finished goods directly from supplier to manufacturers to customers or retailers with no handling or storage. For example stopping a truck at distribution center to put it another truck without storing inventory within warehouse,

  • Cross docking enables faster replenishment, reduce middle and last mile shipping costs by delivering goods inventory closer to end customer (for example using a distribution model) and better servicing to the end customer.

  • Cross docking could be fast track the retail fulfillment process for bulk shipments and eliminate the need for long-term (or sort-term warehousing)

Benefits of Cross Docking?

Cross docking enables a leaner supply chain and ideal business looking to accelerate the order fulfillment process.

There are few benefits of cross docking for e-commerce.

1) Faster Shipping & Receiving Time

Since labor to store products can be reduced or eliminated entirely, goods reaches to final destination in time. Shipping efficiency increases as the bigger batches are break down into a smaller shipments and loaded to fright going in the same direction.

2) Reduced Costs and Time Savings

Cost of goods sold (COGS) accounts for significant portion of inventory expenses. Not only does a business have to purchase product, they also required to pay for first-mile to last-mile shipping and carrying costs as well.

But with cross docking, a business does not need an extensive ecommerce warehouse to cost-effectively get product to their customers. Cross docking makes for a more efficient inventory-management process to support faster replenishment such as just-in-time inventory.

3) Provides a Central Site for Handling Products

When last-mile delivery occurs from one central location, known as the cross-dock warehouse, it can help optimize your supply chain.

At the cross docking location, product is stored and then assigned to multiple carriers based on shipment destination.

4) Reduce Material Handling

Cross docking operations involves less material handling, for example less need to track movement, facilitate storage and protect and manage multiple SKUs. With cross docking you are able to maintain a high inventory turnover.

Types of Cross Docking

1) Pre- Distribution Cross Docking

  • With pre-distribution cross-docking, goods are unloaded, sorted, and repackaged based on predetermined distribution instructions.

  • If the warehouse staff is aware of the end-customer even before the supplier ships out the goods, then as soon as the shipment reaches the dock it is unloaded, sorted, and repacked according to pre-agreed upon distribution instructions.

  • In this pre-distribution method, inventory spends very little time at the cross-docking warehouse. It is best suited for retailers that manage their own warehouses and have direct insights into all of their own customer and supplier relations.

2) Post- Distribution Cross Docking

With the post-distribution process, goods are stored in the cross-docking facility until the next leg of the journey is clear, i.e., the demand is mapped and customers are identified. This type of service would result in inventory staying at the cross-docking warehouse for a slightly longer period of time.

Configuration Steps

Customizing Settings in the ERP System

For a description of the Customizing settings in the ERP system for transportation cross-docking, see the Implementation Guide (IMG) for the ERP system under Logistics Execution -> Service Parts Management (SPM) -> Transportation Cross-Docking (SPM) -> Basic Settings for Transportation Cross-Docking.

Customizing Settings in Extended Warehouse Management (EWM)

  • We deliver BC set /SCWM/DLV_TCD, which makes settings in EWM for transportation cross-docking in the delivery. You must deactivate SAP Global Trade Services (SAP GTS) manually.

For more information, see the documentation for BC Set /SCWM/DLV_TCD.

If you do not want to use the BC set, you must make the following settings:

Note the following when mapping partner roles:

In transportation cross-docking, ERP transfers the additional partner EC (next cross-docking warehouse). In EWM, you map ERP partner role GR (ship-to party) to EWM partner role STPRT (receiving partner), and ERP partner role EC (next cross-docking warehouse) to EWM partner role STPRTF (final ship-to party). Since EWM in TCD, as ship-to party, always uses the next cross-docking warehouse, EWM switches the assignment of ERP partner roles GR and EC at runtime, meaning EWM maps ERP partner role GR as final ship-to party.

During the TCD process, TCD stock still belongs to the issuing warehouse, from a stock perspective. Only when you post the inbound delivery in the receiving warehouse in EWM goods receipt, does EWM send this information to SAP APO. SAP APO updates its stock information correspondingly.

For each TCD stock, use your own stock types, since the stock also corresponds to your own storage locations in the ERP system.

  • Define your own TCD routes in the routing guide.

On the SAP Easy Access screen, choose Extended Warehouse Management -> Master Data -> Shipping and Receiving -> Route Determination -> Maintain Route.

  • You have set No TCD GTS Check if required. For more information, see the IMG for EWM under Outbound Delivery -> Manual Settings -> Define Document Types for Outbound Delivery Proces

1) Define Cross- Docking Profiles

Cross docking profile specify the rules and criteria for identifying cross-dock opportunities based on factors such as product characteristics, demand patterns, inventory levels, and customer orders. Multiple profiles can be created

2) Configure Inbound Delivery Type

Assign the appropriate inbound delivery types to cross docking profiles.

3) Define Activity Areas

Activity areas represent the physical locations within the warehouse where cross-docking activities occur. You need to create activity areas for both inbound and outbound docks. These areas will be used to control movements of goods during cross docking process.

4) Setup Warehouse Process Type

Warehouse Process types define the procedures and rules for handling goods within warehouse. Create Warehouse process types specifically for cross docking operations. Configure the process types to incorporate cross docking logic and link them to respective cross docking profiles.

5) Configure Process Oriented Storage Control (POSC)

POSC determines the storage and handling of goods during cross docking. Configure the storage control settings to ensure that cross-docked items bypass storage areas and are immediately directed to outbound.

6) Define Warehouse Process Definitions

Warehouse process definitions (WPD) outline the sequence steps and actions are involved in various warehouse process. Create WPD specifically for cross docking. Define the required process steps, like goods receipt, put away and goods issue.

7) Enable Process- Oriented Inbound Delivery Splitting

In order to split inbound deliveries for cross docking, enable process-oriented inbound delivery splitting. This functionality allows the system to analyze the contents of an inbound delivery and split it into multiple cross docking opportunities based on the defined profiles and criteria.

8) Activate Cross Docking Storage Control

Activate cross docking in the storage control settings to enable the system to identify and process cross-docking opportunities. This ensures that the system considers cross-docking rules when determining storage and handling decisions.

9) Integration with Transportation Management System (TMS)

If you are using TMS in conjunction with SAP EWM; configure the integration between the two systems to exchange relevant information. This integration helps facilitates the identification and execution of cross-docking opportunities based on transportation events and requirements.

10) Test and Validates

Once the configuration is complete, thoroughly test the IDOX functionality to ensure that it operates and expected. Test different scenarios, including inbound deliveries, cross docking eligibility, and the overall process flow. Make any necessary adjustments and retest as needed.

Rajesh Sharma

SAP WM/EWM Functional Consultant

§ Linked in profile: https://www.linkedin.com/in/rajesh-sharma-204910278/

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