If you are running a warehouse or a logistics supply line, you might want to consider cross docking warehousing. It’s important when working in the logistics industry and warehouse management that you keep processes efficient and fast. This ensures that you are offering the best solution to your customers and clients. At the same time, it helps ensure that costs are kept low. You can make sure that you are able to keep your processes simple and avoid issues with errors that can plague this type of business model.
Cross docking warehousing is a fulfillment and distribution process that involves unloading incoming trucks directly onto outgoing trucks. There is minimal storage in between. Cross docking is a way to keep costs low and provide quick solutions for customers and clients. It ensures that you don’t have to worry about problems with heavy costs or issues with deliveries.
This guide provides all the information you need to know about cross docking warehousing. That includes an expansive description, the benefits of this type of system and why you might choose to implement it into your own logistics business model.
What is Cross Docking Warehousing?
If you are exploring different logistics procedures, then you will almost certainly find cross-docking as an option. With this procedure, products from a manufacturer or a supplier go straight to the customer or the retail chain. This is going to depend on the individual business model in question. With this option there will be limited levels of handling and virtually no storage time.
With cross docking, there will usually be a place where the process occurs. This is typically going to be a distribution docking terminal. Usually, that’s going to include trucks and doors, again with little storage space. Usually, there will be doors on both the inbound and outbound sides to guarantee a smooth transaction. The name cross-docking is also a description of how products are received from the inbound dock. They are then transported through to the outbound area for transportation.
To put this simply, the products arrive through transportation such as trucks where they are placed in a dock that has been allocated. Any products can then move directly or indirectly to the outbound section.
A range of warehouse equipment can be used including:
- A forklift
- Conveyor belt
- Pallet truck
Why is Cross Docking Used?
It’s important to note that cross-docking is not going to be suitable for every type of warehouse. To determine whether it’s the right fit for your needs, you must consider the different benefits that it could bring. There are a variety of different situations where cross-docking warehousing could be an ideal solution. For instance, you might be transporting temperature-controlled items. In a case like this, making sure that the process of delivery is as rapid as possible could be a tremendous benefit. Alternatively, you might have products that are already packed and ready for transport to the customer. This is another key example of where cross-docking would be useful as there’s no need for them to be transported into the main warehouse. It leads to a process that is more effective and efficient overall.
Of course, there are a variety of reasons why cross-docking will be used. Some of the reasons include:
- Creating a central system - With a cross-docking warehouse, it is possible to build up a centralized system. Products can then travel to various destinations from this location in what is believed to be the fastest and the most productive method. Often, this is referred to as a “hub and spoke method.”
- Reducing transportation costs - With this option, significant transportation costs are greatly reduced. Indeed, a number of smaller transportations can be combined in a system where processes are consolidated.
- Breaking down product loads - Larger product loads can be broken down through this system. The aim here is to ensure that there is an easier delivery process that benefits the customer. The process is typically described as ‘deconsolidation arrangements.’
What is a Cross Docking Example?
It’s true to say that cross-docking is widely used in a variety of different industries. Some of the sectors that gain benefits from cross-docking include:
- Pharmaceuticals
- Food distribution
- Nutraceuticals
- Ecommerce
To explore an example, we can examine the pharmaceutical sector and specifically Roche Diagnostics.
The business is one of the leading pharmaceutical companies, particularly for hematological and Vitro diagnostics. They worked with a warehouse storage solution agency with the aim of increasing the efficiency of their distribution center. The center in question was located in Barcelona.
When exploring industries that are benefiting from cross-docking and making a strong push for this solution, the pharmaceuticals sector is near the top of the list. There are two main reasons for this.
The first is that medication needs to be held in an environment where the temperature is controlled. So, cross docking immediately helps avoid issues here. The other is that it ensures that the supply of stock can be managed quickly and effectively. This was particularly relevant for Roche Diagnostics because 60% of their items were perishable and required same-day deliveries.
The cross docking system designed as a joint venture between Roche and the 3PL warehouse solution included an automated system for pallet and box picking. This was created with installation of multiple stacker cranes as well as a min load system which was suitable for smaller orders. This was designed to be functional with a pallet racking zone, specifically for products of special sizes. Finally, there was an area set up for the process of cross docking itself. This was designed to ensure that products could move as rapidly as possible to the outer door. Cross docking is a good solution to expiring product fulfillment.
What is Cross Docking in Inventory Management?
To understand how cross docking fits as part of inventory management, it’s important that you know what this actually is. Inventory management is going to be a significant and crucial part of your supply chain. It will include key decisions and variables such as:
- Controlling and overseeing specific purchases - both from suppliers and storage
- Maintaining stock
- Controlling the amount of product for sale
- Order fulfillment
Inventory management is crucial to ensure that operations remain efficient and continue to function as they should in the long term. If you don’t ensure that you are engaging in inventory management correctly, then you will struggle with heavy costs, low profits and low levels of customer service. Ultimately, it could cause the failure of your business.
Cross-docking can be a part of inventory management, however, it also eliminates the need and indeed the option of extensive management in this area. With cross docking, there is a reduced amount of time and infrastructure that will be necessary to manage the inventory. This is due to the fact that cross docking does place a lot of pressure on logistics suppliers. It will be vital that they continue to ensure that there is a steady level of goods arriving at the inbound docking station.
Despite this, inventory management can be incorporated in a variety of ways. This includes supply chain management software as well as a warehouse management system or a transportation management system. Set up correctly, cross docking can also make managing and recording inventory an easy process that does reduce issues with errors and delays. It’s another way that cross docking can make processes far more efficient and thus effective.
What are the Benefits of Cross Docking?
As should be apparent now, cross docking is a popular choice in a wide variety of different industries and sectors. It has become a key option in logistics and many businesses feel that it provides them with an upper hand over their competition. But what is the thinking behind this and what benefits will cross docking bring for your company? Well, there are quite a few to keep in mind that could be apparent.
- The first benefit is that cross docking is going to reduce the size needed for your facility. That’s due to the fact that there’s very little storage. So, you reduce the footprint and any costs associated with this. Of course, this also means that the costs of storing inventory decreases as well.
- You are going to see significant reductions in material handling too. This is going to be limited to just staging loading and unloading. You won’t have to worry about high levels of putaway activity or picking.
- You can also ensure that customer product quality is also greatly improved through effective management. During the staging and unloading process, it’s possible for staff to inspect inventory and check whether it has suffered any damage during handling. This can help ensure that customer satisfaction levels are significantly improved.
- Since there is a lower level of material handling required with this type of setup, this translates directly to labor cost savings. As such, your business will be able to pass on savings to customers. In doing so, you can make sure that you don’t have to worry about issues such as customers facing heavy costs that could turn them away from your company and towards the competition.
How is a Cross Dock Different than a Conventional Warehouse Facility?
You might be wondering how cross docking is different from the typical warehouse storage facility or solution. Well, there are a few factors that you should keep in mind here. It’s perhaps worth beginning by thinking about size. As already mentioned, the typical cross dock facility is going to be significantly smaller compared to the standard warehouse.
Furthermore, with the typical warehouse, you will need a distributor on hand ready to take on the stock and move it to the customer or the retail business. Cross docking doesn’t involve a distributor like this and doesn’t have massive levels of stock on hand that need moving. Instead, it’s all completely streamlined and products move rapidly through the docking terminal. In the case of a typical warehouse, there’s a lot of handling of the products. In contrast, cross docking is a relatively simple system. However, it does need to be set up the right way. Cross docking will require a particular system to be put in place. This does include the use of the right tech. While a typical warehouse does require technology to function effectively, it’s nowhere near the level of the typical cross dock system.
Of course, the key difference to be aware of between the two different systems is the type. With cross docking, products move far more rapidly through the warehouse. With the typical warehouse, they can be left at the location for months on end. This is again due to the importance of having a build-up of stock that can readily be sent out to customers, even at short notice. There is a decreased time to ship items here. Particularly if you find the right logistics service that will help ensure that your system is set up to minimize time wastage.
How Does Cross Docking Reduce Storage and Handling Costs?
Above, we discussed the benefits of how cross docking is going to help you reduce the level of storage needed and eliminate handling costs. It is now worth exploring how this works and more importantly why it’s effective.
One of the reasons why there is a lower level of storage is due to the fact that products are moving so rapidly through the system. There is no chance for items to be stored for lengthy periods. The terminal won’t even typically be set up for this requirement. Instead, it’s far more likely for items to constantly be passing through from one terminal and shipped out. Again, this does bring the added benefit of less need for storage space. This will only work in a system where products are consistently ready to be shipped out to customers and clients.
How does this impact handling? Again, the products actually receive very limited levels of handling aside from being sorted and distributed to the appropriate terminal. With the right set up a lot of the supply chain can be fully automated. This is going to reduce the need for extensive levels of labor as well. It guarantees that businesses can benefit from a system that requires lower costs and actually helps increase profits. However, for this to work, you will need to make sure that you are investing in some of the tech that we mentioned above.
Cross Docking Advantages
There are many advantages of cross docking that you should be aware of when you are exploring this option for your business. As already mentioned costs are going to be significantly reduced. If you have a logistics partner, you will be renting space for the storage of your inventory. That means that the more time an item is kept in the warehouse, the more it’s going to cost you. With cross docking warehouses, items are constantly on the move, as long as you have a system where they can be delivered to customers immediately.
This also means that there are going to be faster shipping times. That’s going to be a huge benefit for your business and help you gain a competitive edge. Remember, there is a lower level of human interactions with products and this is often where errors are sourced that can slow your system down. With cross-docking, you can provide on-demand shipping that is going to impress your target audience and ensure that they are thrilled with your performance.
With warehousing, there are often multiple teams involved in the logistics process. This issue is almost completely avoided when you explore the option of cross docking. Instead of one time for trucking and another for parcel deliveries, it can all be handled by the same partner. They’ll take care of everything for you and guarantee that you have an efficient system that you can rely on. All you need to do is find the team that will provide the service that you need. It can be difficult choosing the right company, and it’s important to find one that will match your own standards of service.
Cross Docking with Transload Services USA
Are you looking for a business that can provide you with the ultimate cross docking solution? If so, then we can help. We provide 3PL warehouse solutions that will be suitable for businesses in a wide range of different businesses and sectors. Our aim is to offer the ultimate, stress-free solution that tackles all the issues that you may have been dealing with on the market.
As a 3PL warehouse solution, we can handle everything for you with ease. This includes:
As a cross docking warehousing solution, we can make sure that your products are delivered fast without delay. We will also provide a system that minimizes errors and guarantees a high level of customer satisfaction that you want in your business model. With advanced technology, a passionate team, and exceptionally high standards, we are the ultimate logistics partner you need for your business.
Contact us at (866) 757-1109 or get a quote online and get your products on the move.
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