Coming Up Roses

March 15, 2007
On the spectrum of human needs flowers fall somewhere at the superfluous end along with chocolate truffles and $4 cups of coffee. Still, as winter's gray

On the spectrum of human needs flowers fall somewhere at the superfluous end along with chocolate truffles and $4 cups of coffee. Still, as winter's gray and dingy skies hang like a death shroud over much of the United States at this time of year, many of us gladly welcome any reminder that spring isn't far away.

Fresh cut flowers remain affordable in the dead of winter on the strength of a global logistics network that starts with growers in Central and South America for the North American market, and in the Middle East and Africa for European markets. To get these perishable plants into the hands of consumers requires a monumental effort and a huge investment in facilities, equipment and transportation, including air freight.

The Bloemenveiling Aalsmeer Flower Auction in the Netherlands, for example, covers 11 million square feet and has 523 shipping docks and 135,000 trolleys to whisk flowers from Schiphol Airport in Amsterdam through the auction process and back out into the hands of retailers all over the world. Just as flowers are an everyday luxury item made affordable by modern logistics, cross docking itself is a luxury inventory handling process that's gradually become more affordable.

At its most pure, cross docking describes a facility where goods flow directly from receiving to shipping without stopping or being put away into storage. Hence the alternative term "flow through." That's how packages move every evening through postal facilities and the hubs of UPS, FedEx and DHL. Like the flower auction, these operations require huge investments in conveyors and sorting equipment, sized to handle peak volumes, which sit idle much of the day.

But it's still cross docking, with the inherent benefits of reduced storage requirements and less working capital tied up in inventory, even if only 10% or 5% of incoming product can be handled this way. The key to making cross docking work in more conventional distribution operations is the ability, using the capabilities of today's software, to match up incoming goods—especially those in high demand— with known shipping destinations and quantities. This ability is supported by better forecasts from manufacturers as well as point-of-sale data from retailers.

Another trend improving the affordability of cross docking are facilities designed and laid out from the beginning to speed material flow, including lots of dock doors. This doesn't necessarily mean that goods come in one side of a building and go out the opposite side. It often makes more sense for receiving and shipping docks to be as close together as possible to minimize travel distances.

Corporate managers understand cost per piece, and they know that cross docking can help lower that cost. To take maximum advantage of cross docking, management teams need to focus better on how they receive and process orders, and how they allocate, purchase and handle products. It may seem complex, and can be difficult to implement, but the more fluid that processes are, the less handling that's required, and the more economical distribution is going to be.

Back to fresh flowers. As purely commercial as the daily transactions at the flower auctions in the Netherlands and elsewhere may be, there's something metaphorical about roses and lilies, which symbolize love and innocence, moving from developing countries to more industrialized nations. World-class logistics enables global trade, which unites people and economies and raises everyone's standard of living. It's a beautiful thing.

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