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Managing Cross-Docking in Retail with the Celonis EMS
Cross-docking has been used for nearly a century and plays an important role in the success of companies like Walmart - the world's leading retailer and poster child of cross-docking success for anyone involved in supply chains.
Walmart has developed an incredibly flexible and efficient warehouse model based on cross-docking combined with key technologies and targeted automation. Cross-docking is at the heart of the model: it eliminates “the middleman”, deals directly with manufacturers, and ensures a steady flow of inbound and outbound items in the warehouse so that minimum storage capacity is required. Strategic warehouse technology and automation made the system even more efficient by including suppliers in inventory management.
For suppliers, this means consistent business; for customers, faster service and lower prices; and for the retailer itself, lower costs and greater efficiency. A win-win-win situation every retailer dreams of. But most retailers don't have all the necessary systems connected and working.
The risks and challenges of “just-in-time”
Despite the promised benefits, the potential risks and challenges of cross-docking should not be underestimated, especially when the system is not fully implemented or relies on many manual steps.
Cross-docking may sound like a seamless solution, but if not properly planned and executed, it can become a disruptive nightmare of epic proportions. (That, and if a global pandemic happens to come along, for instance.)
The key to efficient cross-docking is real-time operations. This requires a flow of materials without interruption and goods that are consistently available "just-in-time". Especially in the retail sector, where there are many mixed shipments of goods, companies need to be absolutely sure that suppliers can deliver the right product, in the right quantity and quality, to the right cross-docking terminal at the right time. There is no room for error here. Companies cannot reliably fulfill their orders if suppliers regularly fail to deliver the right products or quantities. And any delay will put customer trust and satisfaction at risk, while the retailer wastes time and money.
According to a survey by Deloitte, true supply chain resiliency is one of the major industry trends in 2022. And the way to make that happen lies in more credible real-time information, technology upgrades and agile systems.
Cross-Docking promises agility but its inherent design makes it highly susceptible to supply chain disruptions. When inbound and outbound shipments are disrupted, the entire flow in a cross-docking warehouse suffers. Just one outbound truck held up by a late delivery translates into either underutilized container space and additional shipping, or further disruptions in the supply chain due to the delay. In either case, it means extra costs and extra work.
Real-time information on vehicle locations and delivery status is critical to minimize risks and react quickly to intercept damage. The challenge here is to keep track of real-time information from all stakeholders throughout the supply chain, prioritize accordingly, and coordinate fleet and warehouse in the most effective way.
But how can retailers bring all the information together without completely overhauling their systems? And how can they upgrade those systems without disruption?
Making cross-docking happen with the Celonis EMS
Celonis helps retailers to get a real-time overview of their logistics processes. The Celonis EMS acts like a layer on top of a retailer’s transactional systems, combining three core capabilities: real-time data, process intelligence and targeted action.
In terms of cross-docking, this means retailers don't have to disrupt their business to enhance the performance of their existing technology landscape to optimize for the effective and on-time delivery of their supply chain.
Real Time Data
The Celonis EMS integrates real-time data across systems, desktops, documents and event streams. Within the EMS, all data converges and can be viewed and analyzed. Retailers can adapt to changes in real time, for example, by managing delays, dynamic changes and peaks in demand without serious impact on efficiency, or by ensuring the most efficient use of limited assets such as loading bays.
Process Intelligence
Celonis x-rays processes for inefficiencies and recommends improvements. Using process mining technology, Celonis generates a living, moving picture of the as-is process. A further deep-dive into the process helps retailers to reveal and fix inefficiencies and problems. This enables them to continuously maximize throughput, streamline operations, reduce costs, and monitor performance, including supplier reliability.
Targeted Action
The EMS automatically responds to insights and orchestrates existing technologies. For example, it can assign tasks, notify employees, or release orders based on individual specifications. Retailers can use the EMS to reduce manual steps and interventions, make their processes faster and more reliable, and allow employees to focus on higher-value tasks.
Ready to build every retailer's dream warehouse? Find out more about Celonis for Retail.
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