What can cross docking do for you?
In the era of e-commerce, finding even a small advantage is key to keeping your organisation on an upwards trajectory. Competition is as fierce as ever and companies willing to evolve their supply chain methods will see the benefits of those improvements on the bottom line.
Cross docking is hardly a revolutionary idea but one a surprisingly low number of warehouse facilities put into action, despite the many advantages it can offer. Although not suitable for every type of business, cross docking suits companies that have a constant demand for particular inventory items that are consistently re-ordered.
Read on to see if this is the right solution for you and discover how to cross-docking could transform your supply chain.
What is a cross-docking facility?
Cross docking is a technique used within logistics to consolidate shipments arriving from various sources, before maximising the use of outbound transportation to reduce warehouse storage. It essentially reduces the need to hold significant amounts of stock within the facility without affecting negatively affecting the supply chain.
Broken down into its simplest components, cross docking sees the receipt of goods through incoming shipments on one dock, which are then unloaded and transferred directly across to the outgoing dock where goods are loaded and prepared for delivery. In the majority of cases, this means shipments spend less than 24 hours at the actual facility, and in some instances spend as little as an hour in the dock. The system can only work successfully if a WMS is in use as each package will need to be preassigned with the destination details. Without this, the cross-docking procedure will lose nearly all of the advantages it provides.
Benefits of cross docking
- Less reliance on warehouse services: Some customers will still rely heavily on warehousing due to the nature of their supply chain, however, cross docking allows you to make the most of the facility in other ways. What it helps to avoid is the need for long-term storage for other clients, which will reduce shipment time and be far more cost-effective in terms of operational costs.
- Labour efficiency: With less requirement for long-term storage due to the implementation of cross docking, this will make the workforce in the warehouse far more efficient. Time previously spent on unloading and reloading, either side of storing and retrieving products, is reduced and storage maintenance costs will also be considerably lower.
- Faster delivery process: Cutting down time spent storing and retrieving items means the goods are back out of the facility faster and into the hands of the customer in a shorter space of time. For perishable or seasonal products this is particularly advantageous, keeping them fresh so they arrive in as good as condition possible.
- Enhanced inventory management: Cross-docking in the warehouse means less time is spent handling the goods, lowering the risk of them being damaged. It should also lead to less overstocking as there is less need for products to be retained in the warehouse, making full use of the stock levels available.
- Better utilisation of space: With less standing inventory in the facility it will allow more space that can be utilised for the better of the business. You may be able to build those extra admin offices that have been needed for some time, create training areas, or purchase the automated machinery that wasn’t possible before due to lack of space.
- Improved customer satisfaction: The faster shipping facilitated by the introduction of cross-docking, along with lower prices due to reduced storage costs and better shipping safety of certain product categories, customers will be the ones who see the true value. The roll-on effect will be sustained customer loyalty, enhancing the brand reputation and the ability to grow the business.