What is Cross-Docking?
Cross-docking is one of the more unusual aspects of the supply chain that many businesses are not taking advantage of nearly as much as they should. It might be because many companies don’t even know what cross-docking is. This article will provide information and insight to answer the question, “What is cross-docking?”, as well as the benefits this model can bring to your business.
So, what exactly is cross-docking? It involves delivering products from a manufacturing plant directly to the consumer or retail store without a lot of handling in between, or storage time.
Here is an explanation of what cross-docking is in simple terms: Goods come in to the receiving dock of the cross-dock terminal. They are then screened and sorted before being loaded to trucks on the outbound side of the cross-dock terminal. There is minimal handling of the goods or storage in between the time they come in, and when they leave to be shipped to the retailer or customer.
Here is an example of cross-docking:
Retail store A has ordered 10 fridges, and retail store B ordered 20 fridges from the same manufacturer. A truck arrives at the docking station carrying 30 fridges.
The items are sorted on the cross-dock terminal; there are two trucks waiting on the receiving end of the dock terminal. One truck is heading to retail shop A, and the other is heading to retail shop B. Truck A is loaded with 10 fridges, and truck B is loaded with 20 fridges.
Why is cross-docking used? Now that you know what cross-docking is, let’s move on to the reasons why is it used. Cross- docking is utilized for three reasons:
- To combine different products into one method of transport, as in the example above, to save on time and transportation costs.
- To provide a central site where goods can be sorted and combined so they are easy to deliver to multiple destinations quickly and effectively.
- To break down large products so they are small enough to be transported to the consumer.
What are the benefits of cross-docking? Cross-docking offers the following benefits:
- Reduces delivery time significantly, as goods are not stored.
- Reduces shipping costs, since there is no storage or other warehouse services involved.
- Builds a strong shipping relationship for your business with one company.
- Reduces risk of damage to the product, as it is being handled less.
How does cross-docking affect warehouse design? For cross-docking to be effective, the warehouse must be designed to facilitate this process. It should have different inbound and outbound dock doors, so that trucks can dock accordingly, to either deliver or receive goods.
The warehouse size, shape and layout should be considered when setting up across-docking warehouse. Also, the technology used to move the goods is an important consideration in determining the layout of the warehouse.