Warehouse operations consist of receiving, stocking, picking, and shipping of items. Generally, the storage and picking procedures comprise the majority of costs involved due to the labor involved in execution. From a distribution management viewpoint, implementing the lean principles inherent in cross docking, drop shipping, and Just-In-Time (JIT) strategies generates the ability to substantially reduce holding costs and improve customer service, increasing the efficiency of these labor intensive processes.
To understand how intelligent cross docking can improve inventory and production processes, companies must understand the differences between traditional stocking and shipping and applicable types of cross docking. It is very important to recognize the supply chain processes required to successfully implement cross docking.
Absent Inventory Warehousing Operations
Cross docking refers to shipping and receiving operations that occur without storage and picking. This transaction is accomplished at specific “docks” that enable receiving, product sorting and consolidation, if required, and reloading shipments for delivery to other cross docking locations, retail outlets, or manufacturing facilities.
There is no picking in a cross docking workflow. Goods are delivered just-in-time for distribution of a previously identified order. When properly executed, cross docking eliminates the soft costs of storage and reduces handling expenses.
The rapid consolidation and shipment of products from inbound supplies can be applied to production assembly lines, component distribution, and small package carriers. Each specific operation contends with different supply chain obstacles and requires a tailored software solution to maximize productivity profits.
Manufacturing companies can employ JIT and cross docking to coordinate reception of supplies and generate production kits for simplified and expedited product assemblage.
Distributors can consolidate inbound supplies and components at merging centers before delivery to customers, and small package carriers and other retail operations can implement cross docking to reduce excessive inbound transportation costs and facilitate receiving at outlet locations.
Supply Chain Considerations
In order to maximize the potential benefits, precise coordination is required between the distributor and the vendors. Your distribution software must support the use of bar codes. Reliable vendors are a necessity.
C-docking includes the immediate transfer of products to outbound delivery trucks, eliminating stock inventory. Since there isn’t time to perform product quality inspections, enhanced communication and visibility is also required to drive accurate purchasing and maintain critical delivery times.
Intelligent cross docking plans that utilize distribution management software programs have the ability to generate significant labor and inventory savings, transforming warehouse procedures and increasing production capabilities without adding operational costs. Want to get Better Inventory Control in 15 Minutes? View our Free On-Demand Webinar today!