Cross-docking is a supply chain management strategy that can help businesses achieve a competitive advantage. This article aims to show how cross-docking can improve the efficiency of material transports when implemented in the right way and under the right conditions.
1) What is a cross-docking?:
Generally speaking, cross-docking is a logistical procedure in which products are delivered directly to a customer by a supplier or a production site. This process is achieved through the immediate processing and conversion of incoming deliveries into outgoing shipments, a distribution center ultimately functions rather as a sorting center and not as a warehouse.
2) Types of cross-docking solutions:
In cross-docking, three methods are primarily used:
The first and simplest application is the continuous cross-docking, in which products and materials are continuously moved via a central location directly from incoming to outgoing consignments. This process, also referred to as opportunistic cross-docking, serves the rapid fulfillment of customer orders and proceeds largely uninterrupted, apart from the occasional waiting times that occur when trucks arrive at different times.
Another method is the consolidation process, in which several smaller products or cargo loads are combined into one larger load in the cross-docking plant. Certain items stored in the site's minimum warehouse can also be combined with the goods included to form full truckloads for transportation and to achieve great benefits. This also applies to retailers who compile the products of various suppliers before delivery to the customers for a shipment.
The last procedure is the deconsolidation, in which a large load is divided into several smaller ones, in order to facilitate the transport. This is usually used in retail and in direct deliveries to the consumer, where the incoming products are sorted by multiple suppliers on departing trucks, in order to reach a number of destinations, such as. B. store shops, to be delivered.
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3) Cross-Docking Vs. Stockholding
While a traditional warehousing system requires a retailer to have inventory to meet deliveries to customers, the focus of a cross-docking system is on just-in-time delivery (JIT), where the products are directly from the incoming to the outgoing transport, without leading to a long-term temporary storage, if at all.
4) Benefits of Cross-Docking
Reducing the bearing surface
According to Warehousing and Fulfillment, companies spend an average of $ 6.53 per square foot of storage space. By reducing the need for storage space, cross-docking can not only reduce the long-term storage costs, but also reduce the costs of the equipment and supplies and thus also minimize the ecological footprint.
5) Reduction in labor and subsistence costs
Due to the disappearance of long-term stock and the reduction of goods movements within the plant, which is associated with cross-docking, the staffing cost for the warehouse management and the material turnover is significantly reduced. The resulting savings can be passed on to customers or put into other process improvement projects.
6) Which companies are suitable for cross-docking?
Cross-docking brings numerous benefits, but is actually expensive in the introduction. How can you determine if this strategy is ideal for your business? We recommend that you make an assessment based on your industry, as some industries benefit from cross-docking more and faster than others. If it's in your industry around JIT manufacturing (e.g. in the automotive industry), a high volume of fast-moving goods (e.g. in the food and beverage / consumer goods industry) or a high maintenance stock (e.g. in of the chemical industry), cross-docking could be suitable for you.
In Conclusion:
Whether you want to expand your services, or you're looking to streamline your supply chain. Success of cross-docking can depend on the ability to integrate technologies that are fast, accurate and precise. -
Geek + offers intelligent logistics solutions for a wide range of supply chain scenarios that can be installed for flexibility and scale.
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