Do you manage large volumes of cargo with stable demand? Do you handle perishable goods? Is the time between when you receive an order until it is delivered to the customer too long? Do you need to cut your logistics costs?
If the answer to any of these questions is yes, implementing a Cross Docking strategy in your company can help you improve the efficiency of your warehouse and reduce storage, distribution and personnel costs , guaranteeing your deliveries on time .
However, its successful implementation requires effective integration and coordination between all the actors involved in the supply chain , and may involve redesigns in the warehouse and the acquisition or updating of a suitable EMS . That is why it is important that, before trying to use this tactic, you know in depth what the Cross Docking model consists of and what the necessary conditions are for its effective implementation . A bad synchronization in the process could have effects contrary to those desired and bring great economic losses to the company.
What is Cross-docking?
Cross-docking is a logistics chain optimization in which the merchandise remains in the warehouse for a very short time or is distributed directly to the end customer after receipt.
This more agile or immediate transfer of the product only requires crossing the warehouse's entry and exit docks. Hence the origin of the term in English: cross the docks (cross the docks) .
In the traditional supply chain , the flow between suppliers and the final customer is discontinuous, since supply and demand are not synchronized and the warehouse holds the products until it registers an order to be dispatched.
Instead, in the cross-docked supply chain system , there is a direct integration between supply and demand that reduces storage to little or no time. Basically, we can simplify the main phases of cross-docking in the following operations:
1- Planning of the arrival of trucks with the supplier.
2- Assignment of entry dock for the reception of goods in the warehouse.
3- Unloading, consolidation and quality control of loads, prior to their transfer to the departure dock (indirect cross-docking).
4- Unloading and transfer of goods to the departure dock (direct cross-docking).
Cross-docking storage makes it possible to avoid or minimize the inventory and picking process of merchandise , speeding up product rotation, reducing costs and risks of handling errors, and improving delivery forecasts.
Types of Cross-docking
In general terms, cross-docking can be:
-Direct/pre-distributed: the merchandise arrives prepared by the supplier so that it can be dispatched as soon as possible, without the intervention of warehouse personnel.
-Indirect/consolidated: includes the handling of goods to adapt them to the client's requirements, prior to being sent to the outgoing dock.
-Mixed/hybrid: orders are prepared with the goods received and part of those already in the warehouse.
In turn, there are different types of cross-docking depending on the type of product that your company sends:
- Manufacturing Cross-Docking: This process covers the companies that send inputs required for the manufacture of products. In this case, the warehouse receives the orders and prepares subassemblies for the production orders, prior to dispatch.
- Distributor Cross-Docking: if your company distributes components from several suppliers, through this system the warehouse receives the products from each of them to combine them in a single shipment to the customer when the final component is received.
- Transport Cross-Docking: this operation consists of grouping small packages from different carriers into a single shipment, to optimize its cost and achieve economies of scale.
- Retail Cross-Docking: This system is ideal for retail chain stores, as it involves the receipt and sorting of products from multiple vendors, for dispatch and batch delivery to each store.
- Opportunistic Cross-Docking: it is the most traditional model, applicable to any warehouse. It involves the direct transfer of the product from the entry dock to the exit dock, without handling or storage.
Cross docking examples
Cross-docking can be used for different types of merchandise and final recipients , whether they are raw materials, finished products or manufacturing components, shipped to factories, physical stores or final consumers.
However, there are specific benefits for companies depending on the type of industry they belong to, for example:
- Groceries: businesses that distribute food products, such as restaurants, often experience problems in their fast delivery service, running the risk of their products spoiling. With cross-docking, these types of companies can ensure a constant flow in the food supply chain to operate smoothly.
- Retail: Retailers demand flexibility and immediacy, to guarantee excellent customer satisfaction throughout their shopping experience. By implementing cross-docking, brands that offer consumer goods can optimize their logistics chain , delivering their products quickly and reducing storage costs.
- Healthcare: Healthcare organizations require a strong operational capacity to ensure that their complex deliveries arrive on time. Your products have specific storage requirements, making them expensive and critical at the time of shipment. Cross-docking allows them to send their products directly, reducing the risk of incidents due to the slightest handling of the products.
- Automotive: this industry is based on on-time deliveries , since the production process begins only when an order is registered and the stock is supplied on demand, with which it is not necessary to store it and it is possible to dispatch via the cross-docking system.
conclusion
Cross-docking offers numerous benefits for companies , allowing them to save inventory storage costs and personnel, as well as speeding up the necessary processes to guarantee deliveries in a timely manner.
Key to the success of this strategy is the effective coordination of all the links in the logistics chain , through a TMS system that can be easily integrated with existing order and warehouse management systems.
Tools like VONZU are quickly integrated via API and allow all warehouse inputs and outputs to be controlled from an interactive dashboard, facilitating the forecasting of merchandise arrivals and dispatch management. Join free.
