With the focus on customer service, companies
have moved away from a supply driven business
towards a demand driven business. Companies are
also constantly searching for ways to reduce
inventory and holding costs.
In today’s high speed world, shipping windows are
changing rapidly, as retail clients demand increased
speed to meet store requirements. To achieve
these goals, cross-docking has been pushed to the
frontline of the distribution strategy.
Cross-docking is a system that relies on speed and agility and is normally used in hub-and-spoke
operations. Cross-docking, in short, is the shipment and receiving of goods by bypassing the storage
facility. In the process of cutting out the need for a storage facility, inventory can move quickly from one
end of the supply chain to the other.
Cross-docking is a fairly simplistic way of handling inventory that involves loading and unloading inventory
from an incoming truck onto an outboard truck. During cross-docking, storage time varies–however, most
experts would agree that anything less than two days can be considered as cross-docking. In some cases
staging also takes place.
Cross docking lowers distribution costs and improves service
Cross dock distribution is a proven business strategy that benefits your business by lowering distribution
costs and improving service. Retailers, importers and other businesses use cross dock services to
increase distribution efficiency, to take advantage of inherent economies of scale and to facilitate the
receiving operation at stores.
Cross docking is utilized by the U.S. Army and Wal-Mart
Cross docking has proven to be a very valuable method of shipping goods. The US army realized how
much time and money this method of shipping goods could save, and so have adopted cross docking for
most of their logistical operations. In addition, retail giant Wal-Mart realized how they could service their
massive stores across the country much more effectively by shipping in this manner, and have done so
now for many years.
Additional benefits from cross docking
- Reduces handling costs, operating costs, and the storage of inventory
- Products get to the distributor and consequently to the customer quicker
- Cuts down or virtually eliminates warehousing costs
- Helps to increase available sales space
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