As a supply chain management business operator, you must have heard about cross docking and its magic. Many claim it’s beneficial in reducing costs. Others say it has a tremendous effect on making fast deliveries.
We will explore both of these claims. More importantly, we will see how cross-docking brings down the cost. Then, we will look into some other beneficial aspects of cross-docking.
Cross Docking and How It Reduces Your Costs?
Cross docking is a supply chain management practice where the storage process is eliminated. In cross-docking, the items are sorted as soon as the trucks or railways bring in the material. After this, the warehouse workers stay within the outbound transportation media. This is how cross-docking works.
Now we need to look into the part where it assists in reducing the cost. Most importantly, it is necessary to identify that cross docking reduces costs for whom and for what.
First, cost reduction works for businesses and warehouse management firms. The company that supplies its shipments saves money that otherwise would have been spent on storage.
Furthermore, warehouse management firms also reserve their resources in cross-docking and use the resources for storing other essential shipments.
Moreover, they also save themselves the efforts of cumbersome processes of unloading, storing, and loading the items back for the final supply. Thus the warehouse managers also keep many labor costs from the methods above.
Cross Docking and Other Beneficial Aspects
These are the following benefits of cross dockings other than reducing the shipment and labor costs:
- It Increases The Efficiency Of The Warehouse Management
Cross docking ensures the shipments are sorted before heading out for the outbound transportation medium. This way, much inventory gets freed up for storing other items. Moreover, it also reduces the damage to the shipment, ensuring it reaches the consumer intact.
- It Allows Micromanagement Of Shipment
Every cross-docking facility in a warehouse has sorting or distribution centers. These distribution centers are solely dedicated to sorting the shipments depending on the region and addresses.
These distribution centers ensure the loads stay consistent and the fragile ones are assembled. This distribution leads to better efficiency in the shipments’ micro-management and delivery.
- It Ensures Important Shipments Gets Delivered First
In cross-docking facilities, the sorting technology and the workers also look into the delivery deadline for each shipment. Depending on these deadlines, they ensure that loads with the earliest delivery deadline make it to the outbound transportation first. Hence, the shipments reach their destinations always on-date and on time.
- It Improves the Organizing Ability
It improves the organizing ability of the entire warehouse. A single cross-docking facility can turn around the working of the whole warehouse. The cross-docking itself is organized into three parts.
These comprise the inbound source, distribution centers, and outbound transportation units. While cross-docking makes immediate sorting and arrangements for shipment delivery, it prevents the stocking of inventories.
With more space in stocks, the warehouse put them into use for storing bulky shipments that are otherwise not urgent for shipment. Furthermore, it enhances the coordination among supply chain management units and their workers.
- It Brings Down The Overall Time Of Shipment And Delivery
The entire concept of cross docking is to bring down the shipping time and make on-time delivery. The shipment does not have to sit in the warehouse storage. It gets directly cleared out of the distribution centers through outbound transportation to the consumers or smaller retail shops. As a result, overall time management and efficiency also improve, thanks to cross-docking.
Conclusion
Cross docking is an innovation in the field of supply chain management. Many are yet to unravel its potential. Nevertheless, with so many upsides, it presents some downsides too.
The most plaguing issue in cross-docking is the implementation barriers and monitoring barriers. If the warehouse management personnel contain these issues, they will make huge profits as a significant player in supply chain management.