Cross Docking
Written by Brian B

What is Cross Docking, and What Strategies Work in the Supply Chain

Are you a company that distributes goods in scale and seek to save money on your storage space in your storage warehouse and distribution costs? If you are a large-scale e-commerce company that handles all regional distribution work, then having a distribution docking terminal and a cross-docking facility will be very helpful. Here is how cross-docking takes place:

In a cross-docking operation, you will see trucks arriving at your cross-docking facility where trucks arrive directly to mate with dock doors involved in either inbound and outbound shipments. This usually happens if you have a storage with loading dock. Your workers, with various material handling equipment like forklifts perhaps, will take the pallets and place these on a temporary staging area for further processing. The goods will not linger in your cross-docking facility for long. They will either be sorted out or assigned to smaller vehicles for further distribution within minutes or a few hours.

Where can I find cross-docking as a material handling system?

The operations in a warehouse space have four main functions: Receiving, Storing, Collecting Orders, and the shipping process. Cross-docking works by limiting the storage function thereby requiring only minimal storage space while streamlining the collection of orders (which means the goods coming in and out are already have dispositions). Storage and collecting orders take up the most costs in a warehouse operation, and cross-docking saves on both of these are less inventory handling.

You may find cross-docking operations for the following operations deploying different forms of cross-docking operations:

Customer or retail chain: Walmart is the most famous user of a cross-docking supply chain. Its retail cross-docking system is perfected for almost three decades of use. Cross-docking decreases the time to customers which place substantial retail companies like Walmart a competitive advantage because of the savings taken from the speed and not having to maintain bigger warehouse facilities to handle their goods.

Supplier or manufacturing plant: Having cross-docking operations are essential for the implementation of JIT (Just In Time), and Kanban manufacturing principles where all the aspects of the manufacturing process and the entire supply chain are aware of customer orders.

Food and beverage industry: The supply chain management for the handling of perishable goods requires the shortest dwell time for goods as possible. For handling bulk shipments, saving time on the distribution center is essential to bring the goods to the customers quickly, while minimizing the time to allow for spoilage.

Ecommerce distribution center: Supply chains involved in e-commerce require goods to move quickly from the manufacturer to the customer. This may involve substantial cross-docking warehouses in a country distribution site where inbound shipments are dispatched to smaller outbound trucks for regional distribution sites.

What does it take to implement cross-docking operations?

The cross-docking definition means involving the delivery of products from a manufacturing plant directly without or with little material handling in between. To be able to do that, it takes all of the elements of your supply chain to coordinate closely. You will need effective warehouse management software hardwired to your CRM software (customer relationship management) to be effective. Everyone involved in the supply chains has access to these in some form. In theory, and in practice (for those who effectively implemented this), substantial savings in transportation costs and labor costs can be achieved giving their businesses a competitive advantage.

You will need an adequate transport fleet and cross-docking facilities located in strategic areas to facilitate a continuous cross-docking flow. Truckload shipments arrive in a receiving dock where smaller vehicles will take smaller loads for further distribution will arrive to pick the goods up.

What cross-docking strategies will work for my supply chain?

There are three primary methods or strategies that cover most of the cross-docking examples:

Case Level: This involves greater incoming loads on pallets and is discharged in smaller packages. The one central location has outbound transport carrying a smaller outbound shipment that was sorted out from the central site. A single SKU (stock keeping unit) will dictate the disposition and proper tracking of the goods. If you are an e-commerce distributor or a retail business handling multiple regional networks while keeping in touch with your suppliers closely, then this will work best for you.

Load Unit Level: This involves transferring, for instance, goods from inbound shipments for outbound shipping without opening the packages. Simply put, it is a matter of transferring goods from a central location to another distribution center or centers. Load unit level strategies are the simplest, but it is very effective.

Mixed Case Level: This is the most complicated strategy, and this requires creativity and close coordination with your entire supply chain. Incoming trucks arrive at your cross-docking facilities where unpacking and repacking operations are ready. The mixed-case level method saves, not only storage costs but also operations costs as well. You will require simultaneous implementation of other methods and technologies to work. Examples of these new technologies are mass customization, effective customer response, rapid response systems, and close coordination with third-party logistics are essential for this to work. The mixed-case level works for any large-scale manufacturing and retail operations that deal with national (or international) distribution networks.

Final Thoughts: Cross-docking is future proof

New manufacturing methodologies optimize the overall profitability of any business enterprise. As the world embraces e-commerce, we need to optimize our supply chains to meet the ever-increasing demand for goods. Cross-docking is a viable option for most businesses that aspire to grow and satisfy the ever-increasing demands of customers. To enhance your cross-docking operations, Storage Equipment Systems, Inc. has the necessary tools to ensure their smooth and safe flow. We have a loading dock and door equipment available, as well as other storage solutions equipment such as conveyor systems, loading aides, pallet trucks, and many more! To learn more about our products and services, you may contact us or call us at (602) 269 1188. You may request a quote so we can get started helping your business reach higher levels of success.

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