Setting Up Cross-Docking

Objective

After completing this lesson, you will be able to set up cross-docking.

Reasons for Cross-Docking

Cross-docking is the practice of unloading materials from an incoming vehicle and loading these materials directly into outbound vehicles, with little or no storage in between. You can use a cross-docking process in a distribution center or warehouse to process products and handling units (HUs) efficiently and to minimize unnecessary load transfer activities. Reducing the time in storage in the warehouse reduces stockholding costs.

Using cross-docking enables you to find and fulfill urgent sales orders or reduce processing and sales costs.

Cross-docking: Find and Fulfill urgent Sales Orders or reduce Processing and Sales Costs

Cross-Docking Possibilities in Extended Warehouse Management

There are several possibilities in SAP EWM for cross-docking. First, you must distinguish between planned cross-docking and opportunistic cross-docking.

Distinguish between planned cross-docking and opportunistic cross-docking

Planned Cross-Docking

For planned cross-docking the cross-docking relevance is already defined before stock arrives, and before you post the goods receipt or release the outbound delivery. You can use TCD or merchandise distribution.

Transportation Cross-docking (TCD)

TCD supports the transportation of HUs across different distribution centers or warehouses, up to the final destination. This can involve switching the means of transport, consolidating multiple deliveries to new transports or processing export activities centrally. If the final destination is a distribution center or warehouse at the customer site, a sales order in SAP Customer Relationship Management (SAP CRM) or SAP ERP forms the basis for TCD. However, you can also use TCD to transport HUs to your own final warehouse. In this case, a stock transfer order forms the basis for TCD.

When you pick a TCD-relevant HU, SAP EWM uses a stock removal HU warehouse task (stock removal HU-WT) to update the corresponding inbound delivery and the corresponding outbound delivery order simultaneously. In SAP EWM, you can use the warehouse management monitor to display the TCD-relevant inbound deliveries and outbound delivery orders. The monitor only gives you information about the current process status. However, the transportation cross-docking monitor in SAP ERP offers an overview of the complete process up to that point.

The restrictions of TCD are as follows:

  • TCD does not support returns.

  • If you use nested mixed pallets in TCD, a subordinate HU can contain either TCD-relevant delivery items only or non-TCD-relevant items only.

  • Non-domestic locations in the supply chain in TCD can only be supported if they are the final place of destination.

  • Transportation planning in SAP ERP and SAP Transportation Management for outbound deliveries and outbound delivery orders foreseen for cross-docking is not supported. The same applies to transportation planning in SAP ERP for inbound deliveries in the cross-docking facilities.

Merchandise Distribution

You can use merchandise distribution to plan and control your flow of goods flexibly, enabling you to move goods efficiently through a warehouse. For the merchandise distribution, you use the following warehouse-internal processing types:

  • Merchandise distribution cross-docking

  • Recipient-driven flow-through

  • Product-driven flow-through

Note

The requirements for Merchandise Distribution are as follows: you are using SAP enhancement package 4 for SAP ERP 6.0 with business function Retail, CD/FT_EWM Integration, and your system is configured as SAP Retail.
Merchandise Distribution Cross-docking

Merchandise distribution cross-docking allows you to plan, control, and process the flow of goods from the vendor through a warehouse to the recipients, such as stores or customers. Merchandise distribution supports the push and pull method in SAP ERP, and enables cross-docking in the warehouse.

Flow-through

When you receive goods, you may be unable to send the goods to a final ship-to party completely. This can affect products that are delivered in an unpacked state, or whole HUs. Here, you can move the goods after goods receipt to a cross-docking storage type that you are using as a repacking area.

  • Recipient-driven flow-through:

    In recipient-driven flow-through, you put together one pick HU for each customer. As a picker, you pick up the pick HU, and go to the storage bins. You put the products into the pick HU, and take the entire packed pick HU to goods issue.

  • Product-driven flow-through:

    In product-driven flow-through, you distribute the contents of the incoming HUs to customer-specific pick HUs. As a picker, you pick up the delivered HU, and go to the pick HUs into which you have to distribute the products. You therefore perform deconsolidation and fill the pick HUs. You then perform picking and take the completely packed pick HUs to goods issue.

Opportunistic Cross-Docking

In opportunistic cross-docking, you 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.

Push deployment (PD) and pick from goods receipt (PFGR) are opportunistic cross-docking processes. When you post the goods receipt, SAP EWM checks whether the warehouse process type and stock type are relevant for putaway delay. If they are relevant, SAP EWM delays the generation of the warehouse tasks for putaway. SAP Advanced Planning and Optimization (SAP APO) defines whether an inbound delivery is PD-relevant or PFGR-relevant after posting the goods receipt.

Process Variants

The following process variants exist for determining the cross-docking relevance and additional process steps.

Push Deployment (PD):

You can use PD to execute stock transfers for delivered products from one warehouse to another at short notice, without having to put away the goods.

Pick from Goods Receipt (PFGR):

In PFGR, you can confirm a sales order that is not yet confirmed using the Availability-to-Promise (ATP) check by posting goods receipt for an inbound delivery. You can perform this picking from directly within the goods receipt area. Unlike the standard pick procedure, you do not have to put away the products.

SAP EWM-triggered Opportunistic Cross-docking:

This process takes place entirely in SAP EWM. When SAP EWM generates putaway or pick-warehouse tasks, it defines whether opportunistic cross-docking is to take place, that is, whether the inbound delivery or outbound delivery order item is relevant for cross-docking. You can activate this cross-docking procedure for the inbound and outbound delivery process separately at the warehouse or product level.

Transportation Cross-Docking

The decision to use transportation cross-docking is made by SAP EWM during the route determination of the outbound delivery order. For this, special routes called cross-docking routes are required. The SAP EWM route determination determines all suitable routes between the starting point and the destination (which can be a customer or another warehouse). The result can either be a linear route, which is direct, or a cross-docking route. A cross-docking route may be faster than a linear route as departures on the linear route may be infrequent, while departures on the cross-docking route may occur daily.

Transportation cross-docking scenario showing route optimization from plant to customer, and from warehouse to warehouse, enabling efficient delivery to final destination.

When a cross-docking route is assigned, the ship-to-party in the outbound delivery request is replaced by a cross-dock warehouse and the original ship-to party is assigned to the partner role final ship-to party.

The goods issue is posted by SAP EWM for the outbound delivery order and transferred to SAP ERP (with the cross-docking route and final ship-to party). SAP ERP then creates a pair of deliveries: an inbound delivery into the cross-docking warehouse and an outbound delivery from the cross-docking warehouse to the final location. When the goods arrive in the cross-docking warehouse, the handling units are unloaded from the truck and moved directly from the inbound area to the outbound area.

Nested Handling Unit

This basic scenario can be extended by using storage control if you are working with a nested handling unit. You receive an inbound delivery with a nested putaway HU that contains two further products. SAP EWM determines that Transport Cross-Docking (TCD) is necessary for an HU (TCD HU) and that the other HU is for putaway (putaway HU). SAP EWM determines a goods receipt (GR) storage process for the highest-level putaway HU. The highest-level putaway HU correspondingly runs through all steps of the GR process, including deconsolidation. During deconsolidation, you unpack the TCD HU and the lower putaway HU from the highest-level putaway HU and then pack both of them into a further HU. You move the TCD HU to the goods issue (GI) zone after deconsolidation. If EWM determines a storage process for process-oriented storage control in GI for this TCD HU after deconsolidation, EWM processes the individual steps according to the warehouse process. You perform the further steps of putaway for the putaway HU.

Organizational Structures and Additional Settings

During TCD, the stock remains in the ownership of the sending plant. Only the final goods issue posting from the last cross-docking warehouse removes the stock from the triggering plant. Therefore, TCD requires special cross-docking storage locations for each plant that can trigger a TCD process.

Explore the organizational structure of transportation cross-docking

Supplier Cross-docking

Supplier cross-docking allows you to integrate a cross-docking warehouse into the inbound delivery process from the supplier to the destination warehouse. It is assumed that information about the cross-docking warehouse to which the goods from the supplier are to be shipped is provided by customer-specific enhancements in the ASN IDoc submitted by the supplier.

Additionally, you have to implement the PARSING_IDOC and GN_DELIVERY_CREATE methods of the /SPE/INB_ID_HANDLING Business Add-In (BAdI) to retrieve the information about the receiving cross-docking warehouse from the IDoc and to transfer this information to delivery processing. As an alternative, you can implement PROPOSE_CD_PLANT method of the /SPE/BADI_DETERMINE_CD_PLANT BAdI to determine the receiving cross-docking information internally. For both methods, you also have to implement the FILL_OUTBOUND_DELIVERY method of the /SPE/CD_FILL_OUTBOUND_DELIVERY BAdI to determine essential data needed for creating the cross-docking outbound delivery.

EWM-Triggered Cross-Docking

EWM-triggered opportunistic cross-docking does not need any other application or system for the cross-docking decision. You activate this cross-docking variation with the usage of product groups and product group types, which means it is generally product controlled whether cross-docking is relevant or not.

Additionally you have to implement one or two BAdI, depending on your requirement. The /SCWM/EX_DC_OPP_INBOUND BAdI is for controlling the cross-docking relevance for inbound deliveries, /SCWM/EX_CD_OPP_OUTBOUND for outbound delivery orders. For both BAdIs, SAP supplies example implementations, which you can use to implement your own. The example implementation, when active, use cross-docking whenever it is possible (if all other conditions are met), without regards to First In First Out (FIFO).

This diagram illustrates the cross-docking process, showing direct transfer of inbound goods from receipt area to outbound delivery via EWM without intermediate storage.

EWM-triggered Cross-docking in the Inbound Delivery Process

SAP EWM defines whether the inbound delivery is relevant for cross-docking. You can use this process when you generate warehouse tasks for the putaway. SAP EWM checks whether the inbound delivery suits an existing outbound delivery order item in terms of the following criteria:

  • Product
  • Batch
  • Quantity, including stock separation characteristics, such as party entitled to dispose or the sales order stock

The process can be performed with or without storage control.

Process Steps

The process steps for the inbound delivery process are as follows:

  1. SAP EWM creates an inbound delivery.
  2. You post the goods receipt.
  3. You generate the warehouse tasks for putaway. At the same time, SAP EWM looks for suitable delivery items in existing outbound delivery orders based on the active Business Add-In (BAdI) implementation. SAP EWM checks whether delivery items of an outbound delivery order exist whose outbound delivery stock is suitable in terms of products or batch and quantity.
    • If SAP EWM is unable to determine any delivery items of this kind, it continues with the standard goods receipt process and generates the related warehouse tasks for putaway.

    • If SAP EWM is able to determine delivery items of this kind, it checks whether it has already generated pick warehouse tasks for these delivery items, which are assigned to the RF environment.

      If open pick warehouse tasks of this kind exist, SAP EWM cancels these without violating the first in, first out (FIFO) principle. SAP EWM generates relevant new pick warehouse tasks and assigns to these the stock that you want to put away. This enables you to pick the stock directly, without having to perform putaway. If the outbound delivery stock found by SAP EWM is less than the delivered stock, SAP EWM generates a warehouse task for putaway for the remaining delivery quantity.

  4. You perform picking or putaway and confirm the pick warehouse tasks or warehouse tasks for putaway.
  5. SAP EWM updates the inbound delivery and the outbound delivery order.

EWM-triggered Cross-docking in the Outbound Delivery Process

SAP EWM defines whether the outbound delivery order is relevant for cross-docking. When you generate warehouse tasks for the outbound delivery order, you can use this process to have SAP EWM check the stock in the goods receipt. In this process, SAP EWM checks whether stock exists in the goods receipt, which is more suitable than the stock in the warehouse. Here, you can take the stock directly from goods receipt to goods issue. You can only perform the process without using storage control.

Process Steps

The process steps for the outbound delivery process are as follows:

  1. SAP EWM creates an outbound delivery order.
  2. You generate warehouse tasks for the stock removal.

    At the same time, SAP EWM looks for suitable warehouse tasks with reference to an existing inbound delivery, based on the active BAdI implementation. Here, SAP EWM checks whether the goods receipt contains stock that is more suitable for fulfilling the outbound delivery order item than the stock in the warehouse.

    • If SAP EWM is unable to determine any delivery items of this kind, it continues with the standard goods issue process and generates the related warehouse tasks for stock removal.
    • If EWM is able to determine delivery items of this kind, it checks whether it has already generated putaway warehouse tasks for these delivery items, which are assigned to the RF environment. If open putaway warehouse tasks of this kind exist, SAP EWM cancels these without violating the FIFO principle. SAP EWM generates relevant new pick warehouse tasks and assigns to these the stock that you want to putaway. This enables you to pick the stock directly, without having to perform putaway. If the stock found in the goods receipt is less than the required stock, SAP EWM generates additional pick warehouse tasks for the open quantity, which refer to stock in the warehouse.
    • If SAP EWM only determines open putaway warehouse tasks, which you process on paper only, SAP EWM does not take these into account, thereby avoiding data inconsistencies. If you print out putaway warehouse tasks, and confirm the putaway on the printout, you do not save this data immediately in SAP EWM. In this case, no current data for the status of the putaway warehouse task is available to SAP EWM, from which it can trigger a cross-docking process.
  3. You confirm the pick warehouse tasks.
  4. SAP EWM updates the inbound delivery and the outbound delivery order.

Stock Determination

The standard documentation for EWM implementation scenarios describes the use of two storage locations: ROD (received on dock) for the goods receipt process, and AFS (available for sales) for the outbound process. In if you wish to use cross-docking with these storage locations, you must enable that the outbound delivery order (which tries to pick stock which belongs to the storage location AFS), can use stock which still belongs to the storage location ROD. This is done by setting up the stock determination.

The stock determination is used during warehouse task creation and enables you to optimize the use of different stock types / owners and stock removal strategies.

For the stock determination, you first need to define a stock determination strategy:

  • Stock Determination has Priority:

    During stock removal, SAP EWM considers the warehouse number stock characteristics Owner and Stock Type as defined by you. In doing so, it uses the stock removal sequence to check the existing stocks for the corresponding stock.

    The stock removal sequence arises from prioritizing individual stocks according to the valuation you have defined. SAP EWM first searches through existing stocks according to the stock characteristics that have the highest number of points. If the required stock is larger than the stock found, SAP EWM searches the existing stocks according to the stock characteristics that have the next highest number of points. SAP EWM continues this process until it finds enough stocks for the required stock, or it notifies you that it can only find a portion of the required stock.

  • WM has priority:

    During stock removal, SAP EWM considers all allowed stocks, regardless of the stock characteristic of the warehouse number. It picks the required quantities and in so doing, only takes into account the stock removal rule defined in SAP EWM, such as FIFO. In this case, SAP EWM removes the oldest quantity from stock, irrespective of whether this is an own stock or a consignment stock. You can also use the stock determination’s number of points as sort criteria in the stock removal rule, so that for example, the stocks found per storage type are removed from stock according to descending number of points.

Example

You want to use the stock determination strategy during picking to pick stock which belongs to three different storage locations, LO01, LO02, and LO03 (and the stock types are F01, F02, and F03 accordingly). During the creation of the outbound delivery in SAP ERP, the system uses the pick location determination to determine the storage location LO01.

  • You define the stock determination group 01 for your warehouse
  • You set the following stock determination:
    Stock Det. GroupStock CharacteristicInbound ValuePermitted ValueValuation
    01Stock TypeF01F0250
    01Stock TypeF01F0310

During the warehouse task creation the system uses the stock determination strategy of your stock group 01:

  • If you have defined the strategy Stock Determination has Priority, SAP EWM first searches the warehouse for stock with the stock type F01 according the set stock removal strategy. If SAP EWM cannot find the complete required quantity with this stock type, it searches for stock with the stock type F02, then with the stock type F03.
  • If you have defined the strategy WM has priority, you search inside a storage type or a storage type group by sorting the stock by the Score - Points for Stock Determination, in addition to your sort criteria like the goods receipt date or the self live expiration date. The originally requested stock attribute always receives the valuation 100, the alternatives according the table with the permitted values you defined.

Besides the Stock Type, the attribute Owner can be replaced. This is relevant in case of multiple suppliers and consignment stock.