Mervyn's set to expand cross docking operations.
The expansion of cross docking comes at a time when the entire Dayton Hudson organization, parent of Mervyn's, is embracing technology for the sharing of data. For example, the Minneapolis retailer is attaching all its retail divisions to a single value-added network for electronic data interchange.
At Mervyn's, the reconfiguration of receiving docks at the Salt Lake City distribution center is scheduled to get under way. It will enable the facility to accept shipments of cases and route them directly to stores without any processing or warehousing storage necessary. A more specific timetable for completion of this step was unavailable.
The retailer already is conducting cross docking at its two California distribution centers, its Texas facility and the import center located south of the port of Oakland.
Twenty-four to 30 percent of all products moving through Mervyn's distribution facilities are cross docked, according to Dennis Green, senior vice president of logistics.
Retailers in all classes of trade are accelerating their cross-docking initiatives to attempt to cash in on the potential benefits, which include speedier replenishment, lower labor and inventory storage costs and fewer errors because distribution center handling is greatly reduced.
To effectively coordinate cross docking, however, retailers and their manufacturer partners must have adequate information-systems technology in place to manage and share data in a timely manner.
Mervyn's is among those retailers investing in technology to exploit the cost savings and efficiency rewards of cross docking -- along with other supply chain projects -- to gain a competitive edge in the market.
Beginning next year, for example, Mervyn's and the entire Dayton Hudson organization will migrate toward a single value-added network for electronic data interchange of documents such as purchase orders, invoices and advance ship notices.
While most retailers rely on several value-added networks for this service, Dayton Hudson is consolidating with one: GE Information Services, Rockville, Md., in efforts to improve tracking of the data.
Green said software being developed internally, in combination with GE's services, will enhance the company's ability to track electronic information and more closely monitor progress of shipments in the supply chain.
Mervyn's will also enhance tracking of shipments en route to its facilities through the implementation of a freight management scheduling system, also provided by GE Information Services.
"It will all be EDI transactions so when a vendor ships to us we'll know when the carrier has it. The system will allow us to track incoming freight, so from a scheduling standpoint, we will then know when it's been shipped and when it is estimated to arrive.
"We'll be better able to flow [the merchandise] through the scheduling," he said.
Improving the flow of goods at all points within the supply chain is key to paring costs and gaining new efficiency. Green said the implementation of cross docking -- done with discretion -- has helped to reduce logistics costs for the company over the past five years, when the practice was first introduced.
"Our total costs have consistently decreased and cross docking has been a part of that," he said.
He cautioned, however, that the cross docking is not appropriate for all products and not all manufacturers are sufficiently equipped to handle it. "Some people do cross docking and the goods end up in the store's back room -- and you end up losing more" money than was saved because handling merchandise in the store is more costly than handling it in the distribution center.
Essential to the success of cross-docking initiatives at Mervyn's is the increasing volume of "floor-ready" shipments arriving at the distribution center, Green noted.
Floor-ready merchandise is prepared by the manufacturer in such a way as to speed its delivery to the store floor. For example, retailer-specific price tickets are applied and garments are hung on acceptable hangers before they leave the manufacturer's facility.
"When you have floor ready you are able to cross dock -- you then have the capability of moving a carton through your center in a matter of minutes," Green explained.
"As we have been able to increase the amount of floor-ready product that comes into our center, we have been better able to utilize the cross docking concept."
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|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Sep 22, 1997|
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