CROSS-DOCKING RESOLVE

David Merrefield

As we embark on the week of New Year's Day, I'm glad to report that I haven't heard too much about New Year's resolutions. That's good: The less that's promised, the smaller is the scope for disappointment.

But there's one industry issue that requires a lot of resolve to get accomplished and that won't disappoint if well accomplished. That's the matter of moving from the receive-and-put-away style of warehousing to a quick-turning cross-dock facility.

Several major industry entities are experimenting with cross docking now, and are learning of associated pitfalls, such as those surrounding labor issues, trade relations and long start-up time.

One major industry player deeply involved in cross docking is the Dutch-American retailer Ahold. That Netherlands-based company now generates worldwide sales of some $24 billion and is rapidly expanding into Asia and elsewhere. (For a lot more about Ahold, see the Page 1 news feature.)

When it comes to cross docking, Ahold has solved many of the problems, at least in its home country: In Holland, Ahold funnels nearly all products through cross-docking facilities and has virtually eliminated direct-store-delivery.

In this country, Ahold is inaugurating a cross-dock facility near Buffalo, N.Y., which is intended for the eventual supply of some products to many of its supermarkets along the Eastern seaboard.

But such a project isn't easy, especially when it comes to labor. Organized labor recognizes that cross docking could not only reduce Ahold's work force, but that it also may reduce headcount at support facilities, such as third-party transportation suppliers. So Ahold has agreed with the Teamsters to sponsor a study, now being done by Cornell University, to determine the effect of cross docking on employment.

As Robert Zwartendijk, president and chief executive officer of Ahold USA, told SN editors, "If cross docking creates unemployment in our direct company, then of course that's our final responsibility.

"The discussion with the Teamsters was whether it creates unemployment outside our company, at the independent transportation companies delivering to a number of companies, including our stores.

"So we've agreed to look at that problem, and we've agreed to find out if, and in what way, we could help. We will share results of that study with the Teamsters."

But labor isn't the only problem: "Cross docking is not something you switch on overnight. It's a gradual development, and it takes long negotiations with suppliers," he pointed out.

And efficiency raises other questions too: "We used to have six distribution centers that were scattered around town, so we made a new, bigger one. And then the discussion arose about reducing DSD, or not. In Holland, we have 100% cross docking. There is no DSD except for newspapers and bread. Everything is through our distribution centers. "We invited the Teamsters to Holland and showed them our distribution operation there so they could see that this is where things will be going in the future. And they were impressed."

This change to future methods is impressive, and it's upon us now. But this is a future that calls for a lot of resolve to translate it into a reality that won't disappoint.