Cross-dock process involves delivering products from a manufacturing plant directly to customers with little or no material handling in between. Cross-docking not only reduces material handling, but it reduces the need to store the products in the warehouse. Cross docking focuses on Just in time shipping process.
The process consolidates inbound products from different vendors into a mixed product shipment, which is delivered to the customer when the final item is received. For example, computer parts distributors can source their components from various vendors and combine them into one shipment for the customer.
Following diagram shows typical difference between warehousing and cross docking.
- Reduced labor cost, as the products no longer require picking and put away process in the warehouse
- Reduced lead time from production to the customer, which helps improve customer satisfaction
- Reduced warehouse space requirement, as there is no requirement to store the products
- Reduced inventory holding in supply chain, making supply chain lean
Types of Cross-Docking
Basis level of sorting or consolidation activity required, cross dock can be divided in to following types
- Pallet cross dock – following criteria are true for pallet cross dock
- Sorting / Order consolidation – Pallet level
- Inbound profile – Pallet
- Outbound profile – Pallet
- Case cross dock – following criteria are true for pallet cross dock
- Sorting / Order consolidation – Case level
- Inbound profile – Pallet / Case
- Outbound profile – Case
- Each cross dock – following criteria are true for pallet cross dock
- Sorting / Order consolidation – Each level, often ‘Put to light’ importation is used for order consolidation
- Inbound profile – Case
- Outbound profile – Each
Products Suitable for Cross-Docking
Following products are suitable for cross docking.
- Perishable items that require immediate shipment
- High-quality items that do not require quality inspections during goods receipt
- Staple retail products with a constant-demand or low-demand variance
- Pre-picked, pre-packaged customer orders from another production plant or warehouse
Risks Associated with Cross-Docking
As products aren’t put away in the company’s prescribed fashion during cross-docking, there’s an increased risk related to loss of inventory control.