May 1999 | Commentary | Supply Chain Technology

Crossdocking: The Supply Chain Core

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Crossdocking has become a key technology in handling products and packages properly within the supply chain. For crossdocking to come of age, certain technologies had to be firmly in place, including portable and fixed bar-code equipment, data collection terminals, software applications, a dedicated database, a network or a combination of network and radio frequency devices. With this equipment and good practice behind it, crossdocking has become the place where supply meets demand head on.

This is particularly the case when a for-hire LTL carrier is looking for measurable benefits. American Freightways is just such a carrier—with more than 13,000 employees, 236 customer service centers, and nearly 25,000 pieces of revenue equipment. Crossdocking became the key to cost-efficient changes starting in 1993.

"With the old system, shipment identification, manifest information, and trailer numbers were input with manual keystrokes," says David Green, purchasing coordinator for American Freightways. "This was a time-intensive system that, when replaced, took nine minutes out of a 10-minute process."

The improvement was accomplished by using a rugged, wireless computer terminal with a bar-code connection from Kinetic Computer Corp., a fast-growing hardware manufacturer that does final assembly and testing in Billerica, Mass. Kinetic, founded in 1992, was based on its experience in ruggedized hardware for customers such as NASA. While the company's early products were known for their high reliability, high cost, and low volume, they are now available to the commercial marketplace. Kinetic's PC/Rover terminal can be placed at the docking station and within vehicles.

"Kinetic offers excellent warranties and superior customer service," says Green. "Yet, when we chose Kinetic, the two primary considerations were lower cost of the units—from both the installation and maintenance perspectives—and the units' durability."

Kinetic also built a prototype that fit American Freightways' bill. The prototype met all the company's requirements and, although closest to its legacy system, was clearly superior, outperforming units offered by competitors. American Freightways was able to use its proprietary software application at the crossdocking station, but the hardware changed radically.

"American Freightways typically sends trucks out from a customer center for pickups," says John Armstrong, director of manufacturing at Kinetic Computer Corp., and former manager of the American Freightways account. "AF picks up freight of different sizes and weights, not a full truckload from any one customer. The carrier could pick up, for example spool thread from one customer, and four pallets of machine screws from another. The trucks bring the freight back to the customer center, where it is broken down off the truck and redistributed for outbound delivery."

"American Freightways' goal is to handle its freight logistics in the most effective manner," Armstrong says. "It uses technology to track inbound shipments, determine the number of trucks needed outbound, and their geographical distribution. AF wants to maximize all its deliveries, and has been an early adopter of logistics information technology."

"The inbound materials get picked up, and a manual bill of lading, which has a bar-coded PRO number that identifies the picked up shipment, is created," he explains. "When the truck arrives at the customer center, there's a Kinetic Computer crossdock sitting at the door, with a bar-code scanner hanging off it. The forklift removes the first shipment off the truck and stops at the crossdock. The shipment is bar-coded, and the PRO number is logged in and appears on the computer touch screen."

The forklift operator has to answer many menu-driven questions about the shipment, such as: is it a pallet, a spool or a bucket? What is the quantity? Is there any physical damage? The computer screen tells the operator that the first piece delivered needs to be moved to Dock Door Six. There, a truck is set up for a particular destination. The shipment is placed and the outbound delivery is prepared. If a customer calls to find out the status of a shipment and when it will be delivered, American Freightways can provide real-time information, information that is always visible.

"Our crossdock acts as a wireless client," Armstrong says. "It talks back in real time to the server, where that routing information is calculated. It works like a PC on a network.

"We offer a wireless network through the use of a LAN radio card that has warehouse range. The Kinetic terminals talk to a number of access points throughout the warehouse while they are hardwired to the network connecting to the server. Kinetic is not a network installer but basically a box manufacturer."

The terminals (both an enclosure and the components inside) can withstand a broad range of temperatures—from a summer in an open docking station in Houston, Texas to a -10 degree winter in South Bend, Ind. The terminals' enclosure is measured as a NEMA 3, which Armstrong suggests, "can take forklift bangs, keep out moisture or resist heavy doses of carbon monoxide."

The PC/Rover terminals provide several other advantages. Their touch screen is popular in the environments within which they work. And, in addition to being an RF device, and working within an open architecture and with Windows, the terminals are capable of being ethernet enabled.

American Freightways uses Kinetic terminals at eight of its customer centers, and anticipates additional installations. David Green says he likes all of Kinetic's features, especially those that help him offer and maintain superior customer service.

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