One of the most significant costs a firm has during the life of a product is inventory storage. Storage costs can account for up to 67 percent of overall warehousing costs, especially if the product is excess inventory or dead stock. Cross-docking comes in handy here, saving you both time and money.
Cross-Docking Definition
Cross-docking is an operational procedure where products are directly transferred from incoming to outbound transport. Unlike traditional warehousing, you do not typically handle or store any product. Cross-docking reduces inventory and operation costs by eliminating unnecessary handling and storage.
Cross-Dock Warehouse
Cross-docking is an operational procedure where products are directly transferred from incoming Cross-docking is most commonly done in a warehouse or distribution docking station, where trucks can come and leave at will. Inbound and outbound shipments are usually separated on two sides, with a dedicated central area for sorting and packing merchandise. Simply put, trucks, ships, and airplanes deliver shipments to the inbound dock. They are then taken to the center area to be sorted and inspected. They are immediately placed on outgoing transport and dispatched to consumers once completed. The majority of goods spend less than 24 hours on a cross-dock before being sent to their final destinations.
Types of cross-docking
- Continuous
This is the fastest type of cross-docking. It consists in providing a central area for products, so they are transferred at that very moment from the inbound truck to an outbound one. The only way to keep this product is if trucks keep arriving and going fast. So, a high level of coordination is needed.
- Consolidation Arrangements
This process consists in loading several merged small products. Or one big load in the dock area. This way, incoming cargo is combined with products that are stored at the terminal to arrange full truckload dispatch.
- Deconsolidation Arrangements
Instead, this last process is the opposite of consolidation arrangements. It consists in splitting large loads of products into smaller ones. This way it is easier to deliver them. Usually, since these are small, the goods go directly to the customer.
Products Suitable for Cross-Docking
Cross-docking is an operational procedure where products are directly transferred from incoming
There are materials that are better suited to cross-docking than others. The list below shows a number of types of material that are more suited to cross-docking.
- Perishable items that require an immediate shipment.
- High-quality items that do not require quality inspections during goods receipt.
- Products that are pre-tagged (barcodes, RFID), pre-ticketed, and ready for sale.
- Promotional items and items that are being launched.
- Staple retail products with a constant-demand or low-demand variance.
- Pre-picked, pre-packaged customer orders from another production plant or warehouse.
How to Know if Cross Docking Is Right for You
Cross-docking necessitates effective planning, optimized transportation operations, current technology, high turnover, and short lead times. Cross-docking is right for you if you can do it yourself or find a 3PL who can. If you can’t handle those issues, you might want to stick to a more traditional warehousing strategy.
Cross-docking necessitates effective planning, optimized transportation operations, current technology, high turnover, and short lead times. Cross-docking is right for you if you can do it yourself or find a 3PL who can. If you can’t handle those issues, you might want to stick to a more typical warehousing strategy.
Of course, if you go with a more traditional method, you’ll likely need an inventory management system as well as a few other tools to run your business effectively – in which case, Elmasys will be required.
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