In order for organizations to grow, the productivity and speed of their supply chain must be considered, and cross-docking is a strategy that many companies use to their advantage. When used correctly, it can help to decrease handling times and improve efficiency. Today we’re going to look further into what cross-docking is, how it works, and the benefits it can have to your organization.
What is cross-docking?
Cross-docking helps to remove the “storage” link in a supply chain, and if used correctly, it will result in a leaner and more efficient supply chain. Products are taken from a supplier and directly distributed to the customer with minimal or no handling and storage time. This process usually takes place in a docking terminal for distribution, and the procedure involves receiving products from an inbound dock and then transferring them to the outbound dock.
How does cross-docking work?
There are two different forms of cross-docking; pre-distribution and post-distribution. In pre-distribution cross-docking, the goods will be unloaded and repacked to identify the customer before they leave the supplier. On the other hand, post-distribution cross-docking waits to sort the goods at the proper facility, where customers are selected by demand. The benefit of this is that suppliers can make more informed decisions based on current figures and forecasts, although it does mean the goods may spend more time in the cross-docking facility.
The Advantages of Cross-Docking
Cross-docking offers many advantages, thanks to reducing the “storage” link of the supply chain. If you are looking to have a more efficient and leaner supply chain, it can help you make smarter decisions when shipping goods. Your goods will generally reach your customers much faster than the competition and save you storage and handling costs during the process as the goods spend little to no time in a warehouse. Finally, almost any product can be shipped using this process, thanks to various temperature environments on offer.
Examples of Companies who Successfully use Cross-Docking
Cross-docking is suitable for a wide range of industries and is particularly popular in the automotive industry, which has been using this system for decades and was first introduced by Toyota with their Toyota Production System. Consumer goods are another industry that reaps the rewards of cross-docking and allows companies such as Amazon and Wal-Mart to offer customers the goods they want at a low-cost and with quick delivery. The food and beverage sector must constantly keep on top of their menu ingredients, and so cross-docking reduces the chance of spoilage thanks to the temperature-controlled environments it offers to users. Another area that also benefits from these controlled environments is the handling of chemicals, which need to be treated with care due to the dangers associated with handling these goods.
Evansville Cold Storage has utilized cross-docking for years as a means to expand our organization and improve our supply chain productivity and speed. Every working day we reap the cost-saving benefits of minimal handling and offer our customers a vastly more efficient service.