Merchandise Distribution: Processing Methods
Use
The processing method determines how merchandise is to be treated in a distribution center immediately after goods receipt.
Cross docking method
Cross-docking is an efficient consumer response (ECR) concept used to improve logistics, in particular in the distribution center. The goods are taken from goods receipt to goods issue without being placed in storage in the meantime. You can use the cross docking method to increase inventory turn, move the goods through the distribution center more quickly and reduce the costs for processing and storage.
You can also use the cross-docking method in SAP Retail even if you do not use a warehouse management system. Cross-docking includes the following processing methods:
The shipping units are not unpacked or repacked between goods receipt and goods issue.
Once they have been received, the goods are transported to a repacking zone, where they are repacked. They are then taken to goods issue. The following types of flow-through exist:
After goods receipt, the merchandise distribution data is evaluated and the relevant deliveries are created for the recipients. The articles for these deliveries are then picked.
The goods are picked in the distribution center using a distribution order. When a handling unit (e.g. a pallet) is full, a delivery is created containing the content of the handling unit. You can only use this method if you use Lean WM.
A pallet of boxes of red wine is delivered to goods receipt. A distribution order is created for the pallet when the goods receipt is posted, and is printed in the form of a distribution list. A member of the warehouse staff takes the pallet to the distribution zone, where there are a number of pallets, each assigned to a different store. Other articles have already been placed on these pallets for the stores.
The warehouse staff use the information on the distribution list to put the boxes of red wine on the store pallets, e.g. 6 boxes on pallet 1 (Boston store), 4 boxes on pallet 2 (Cambridge store) etc. Once a store pallet is full, a delivery is created for it in the system. The goods on the pallets are then secured, and the pallets transported to goods issue.
Putaway
The goods are placed in a particular storage bin. At a later date, deliveries are generated, the merchandise is picked, and the goods issue is posted.
Optimizing methods
Often, some recipients receive large quantities, and therefore also large handling units (e.g. whole pallets), while the requirements of other recipients are smaller, and they therefore receive deliveries in a smaller unit (e.g. box). Despite these differences, you are able to procure all merchandise in large handling units by combining the distribution methods.
All handling units that can be forwarded completely to a recipient are processed using cross-docking. If a recipient is to receive a quantity smaller than that contained in a handling unit, the merchandise is processed by flow-through and split into smaller quantities.
All handling units that can be forwarded completely to a recipient are processed using cross-docking. If a recipient is to receive a quantity smaller than that contained in a handling unit, the merchandise is split into smaller units. These smaller units are placed in stock, and removed from stock when they are to be delivered to the recipient.
You can use this as an alternative to the cross-docking/flow-through method if you do not use flow-through in your distribution center.
How is the processing method determined?
The processing method is contained in the following data:
You can enter a distribution profile in the logistics data in the article master. This indicates the processing method to be used for a distribution center. You can assign a processing method to the distribution profile in Customizing for Merchandise Distribution.
During merchandise distribution planning, you can have the system propose the processing method from the distribution profile, and change this if required. You can process this in the details screen for the distribution center in allocation tables. When you create a collective purchase order, you can maintain it in the worklist or individual processing.
If you create a procurement document as a follow-on document for an allocation table or collective purchase order, the processing method is copied to the procurement document (indicator for relevance to allocation table in additional item data) and the merchandise distribution data.
If you adjust merchandise distribution online, the system proposes a processing method. You are no longer able to change the indicator for the processing method. However, you are able to change the method indirectly by copying the full or partial merchandise quantity to the quantity fields for other processing methods.
However, if you do this, you must remember that the merchandise quantity already exists as stock in the storage location of the original method. As a result, as with quantity changes, you must carry out a transfer posting for the stock in the storage location(s) of the other method.
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At goods receipt, you posted 100 pieces, for which cross-docking was defined, to cross-docking storage location 0001. When you adjusted the distribution online, you reduced the cross-docking quantity to 60, and set the flow-through quantity to 40. You must therefore carry out a transfer posting for these 40 pieces from storage location 0001 to flow-through storage location 0002.