Cross-docking is the process of planning distribution so that as soon as materials come into a warehouse they are immediately shipped out to the consumer. The point is to ensure the inventory never has to be stored for long periods.
Timeline Logistics, professional courier and warehouse provider, highlighted several benefits to this type of process. If a company doesn't need permanent storage, it will spend less on overhead. Cross-docking reduces the risk of inventory damage or loss. Also, a large stockpile of merchandise can fall victim to changing markets.
Cross-docking, however, can be difficult. If a company would like to take advantage of this distribution process, warehouse managers need to ask themselves these questions:
Is your facility ready?
In order to cross-dock, a warehouse has to be ready to accommodate incoming and outgoing transportation vehicles quickly.
Material Handling & Logistics stated more than 50 percent of companies that cross-dock use facilities specifically designed for the process. A loading dock that can accommodate two large trucks at the same time is ideal. A warehouse won't need room for storage but there should be an area for unloading items and preparing them for transport.
If a company is planning to utilize cross-docking procedures, it should design a layout that facilitates speed and functionality. The inventory preparation space needs to be close enough for easy loading, but far enough away as to not interfere with the operations of the vehicles. If managers are looking to renovate an old space, have a definite plan about how to put old storage area to use.
Are your products in demand?
A company that is shipping out products as soon as they receive them had best have a destination for the goods. Cross-docking cannot be used for merchandise that is not in demand.
It's not enough the product is popular right now; the item has to have stable demand. Supply Chain Digest stated cross-docking is best used for merchandise immediately pushed to retailers. A company with a client who needs a consistent stream of products is a great candidate for immediate distribution turnaround.
Other products may be better served with an inventory backup. If a company faces a huge consequence from stock-out, that business may wish to put storage to use.
Do you have dock visibility?
Products zooming through company facilities have to be tracked. Managers and customer service reps can't be on the shipping dock all day, but they have to be able to account for merchandise.
Knowing the time merchandise arrived, the condition it was in and how fast it was sent back out is crucial for projecting inventory performance and answering customer inquiries. If dock workers are just jotting the information down, though, it may be hours or days until the entire company is aware of what happened during the cross-docking process.
Tools that work in conjunction with data software – like barcode scanners or mobile devices – can eliminate common recording mistakes. They are also faster. A barcoding system allows information to be captured with the click of a button. The details are reported to the software and every user in the company has visibility.
Microsoft Dynamics NAV is an ERP solution for companies seeking fast and efficient process reporting. The software is implemented throughout the company to give complete visibility.
Managers can read the whitepaper "Warehouse Management for Microsoft Dynamics NAV" for more distribution solutions.