Keep it moving
BY DAVID BIEDERMAN
6 February 2006
Journal of Commerce
Cross-docks. Mixing centers. Flow-through centers. These small, speed-based distribution
facilities are springing up nationwide. But while the concept is taking off, it's nothing new.
Cross-docking is the process of moving a finished product from the manufacturer to a retailer's
shelf with as little handling in between as possible. It's been around for as long as there have
been trucks, according to George Powers, president of logistics provider American Port Services
in Savannah, Ga.
The difference is that instead of merely a way to speed domestic goods to market, cross-docking
has become a cornerstone of global logistics strategies for some of the biggest retailers.
Driven by a flood of Asian imports, current cross-dock usage far exceeds what Powers saw when
he founded APS 20 years ago. "Imports are flooding in but not necessarily in the quantities and
configurations that people need to ship them to stores" and distribution centers, he said.
According to a Lehman Brothers global equity research report, 50 percent of Sam's Club network
volume flows through 19 company cross-dock centers that collectively handle some 19 million
pallets annually. The centers are part of parent company Wal-Mart's global strategy to increase
facility throughput as it moves from category-based to velocity-based networks.
A 2004 report by the Boeing Center for Technology, Information and Manufacturing comparing
the supply-chain practices of leading mass merchandisers said 75 percent of Costco Corp.'s
goods are cross-docked, spending on average only nine hours in a distribution center.
Scale is what enables mass retailers such as Wal-Mart and Target to employ ...