Understanding Cross Docking in Supply Chain Management

Understanding Cross Docking in Supply Chain Management

Cross docking is a common practice in the supply chain logistics aimed at eliminating storage and excessive goods handling to ensure more efficient operations. Cross docking happens in a cross docking warehouse. In the cross dock facility, warehouse staff unload goods from an incoming truck by use of modern machinery such as conveyor belts and load them onto an outgoing truck.

The practice is common among businesses that want to minimize storage time because of the nature of their products, those that handle small shipments from different places, and for products that require some specialized manipulation before they reach their end customer.

How a Cross Docking Warehouse Works

A cross docking warehouse is a quick pass-through for goods. It deals with goods that require little to no storage, with goods spending less than 24 hours in a docking terminal. A docking terminal has inbound and outbound lanes. Goods that have arrived go through the receiving dock through the inbound lane.

They are then moved to the outbound lane by use of conveyor belts, fork lifts, and other equipment to an outgoing vehicle.

The Different Types of Cross Docking Services

Various activities take place in a crossdock facility. Below are the different aspects of crossdocking:

1. Continuous cross docking

Continuous crossdocking is just as the name suggests. It is the fastest type of crossdocking where goods spend the minimum time in the crossdock facility. Once the inbound truck arrives, goods are transferred immediately from one truck to another. Most of these terminals are designed in the form of a line which makes loading and unloading much faster.

At times, the inbound truck will arrive earlier than the outbound truck or vice versa. In such cases, there will be some waiting time involved before goods are dispatched to their final destination.

2. Consolidation cross docking

Some businesses operate by merging small loads of goods from different locations. For example, if a large retail store has ordered supplies from different places, it would be costly to transport such goods as different shipments especially if they consist of small batches that can be put together to form one large shipment. Such a store can combine the shipments from the different suppliers into a single shipment to benefit from economies of scale.

The store will find a crossdocking warehouse that is closest to all the supplier locations, where the shipments from different trucks can be consolidated and transported to the required destination.

Some items can also come in via different transport systems such as road and rail. These goods need to be combined as well before the final shipment

3. Deconsolidation crossdocking

Deconsolidation crossdocking is the opposite of consolidation. It happens where goods from one large shipment are unloaded and repacked into several small shipments for transfer to different destinations.

Deconsolidation happens when a truck contains goods that require sorting before being transferred to the final destination. It is a good supply chain strategy to use as it enables customers to receive their goods on time. It also reduces the costs and losses that would result from handling goods at the various destination points for the different customers.

4. Hybrid crossdocking

This is whereby the crossdocking warehouse needs to blend materials that are already stored in its warehouse with incoming ones before loading them into an outbound truck. Some incoming goods may also be stored in the warehouse for a short period before being delivered to the end customer.

5. Short-term storage

A cross dock facility can also store goods for a short time as the goods await their appointed delivery time. Short-term storage can happen with promotional goods, seasonal goods, or goods which have been rescheduled for delivery because of missed appointments.

Who Can Use Cross Docking?

Cross docking is an effective supply chain strategy that most businesses can use. It is, however, more beneficial for particular types of businesses. These include businesses that:

  • Handle perishable goods such as foods and beverages.
  • Deal with medical and pharmaceutical products which are in high demand and also have expiry dates.
  • Require a constant supply of key raw materials for production.
  • Want to transport on-demand promotional materials
  • Have readily packaged or already sorted and labelled goods such as custom parcels.

How Cross Docking Can Benefit Your Business

Cross docking is the best strategy to use when you want to save transportation cost. It reduces the cost of storage, inventory management, and labor costs associated with handling of goods. Goods also reach customers faster, which results in happy customers.

Successful implementation of crossdocking operations requires cooperation among all members in the supply chain.  If you are a manufacturing firm, you need to work well with your raw material suppliers so that they deliver goods on time. The practice also requires visibility of the entire supply chain for better control.

At XoLogistics, we provide all types of cross docking services to suit your needs.

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