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Using Cross Docking to Cut Costs
Written by Steve Hudgik
What is Cross Docking?
Cross docking is a method for moving materials or product with little or no warehousing during the process. It involves unloading incoming shipments; sorting and consolidation; and then immediately loading them on outgoing trucks or rail cars. Instead of warehousing, the distribution center is essentially just a sorting center which materials quickly pass through.
How does Cross Docking Work?
A typical cross docking facility might look like a long, narrow building with loading docks on both sides. The objective is to maximize the number of loading docks and minimize the amount of floor space. Materials arrive on one side of the building; are sorted and consolidated in the middle; and loaded onto trucks and shipped out from the other side of the building. Whenever possible materials are moved directly from an inbound truck to an outbound truck.
With cross docking incoming materials have already been assigned to a customer. There is no reason for them to sit in the distribution center waiting to be "sold." They may be transferred directly to an outbound truck. In some cases materials spend less than an hour in the distribution center. A longer residence time might be need at times to allow time for enough materials to come in to make a full outbound truck to certain destinations. However, materials rarely spend more than 24 hours in the distribution center.
The spoke and hub systems used by airlines might be considered a cross docking system for moving people. People arrive at an airline's hub airport from a large number of individual locations. The people are sorted and consolidated onto outgoing planes and delivered to their destinations. Ideally they spend a minimum amount of time in the airport, although when traveling to or from less popular locations there may be longer airport wait times. In a simplistic view the planes just move back and forth along the same routes. They collect and bring people into the hub, then reverse direction and distribute outgoing traffic back along the same route.
What are the Benefits of Cross Docking?
The advantage of cross docking include:
- Cross docking minimizes the need for warehouse space.
- Cross docking reduces inventory carrying costs.
- Cross docking reduces labor costs for putaway and picking.
- Cross docking reduces material handling, reducing costs and reducing the opportunities for goods to be damaged.
- Cross docking reduces the time span from product production to delivery to customer.
- Cross docking consolidates shipments, better utilizing transportation resources and allowing smaller quantities to be economically shipped.
- Cross docking produces an increased throughput using less resources.
While cross docking is not appropriate for all industries, it provides powerful economic, quality, and customer satisfaction benefits that make cross docking a compelling approach to handling movement of goods and materials.
Cross Docking Systems
There are a number of cross docking scenarios that can be used.
- Retail Cross Docking – This is the most common application of cross docking. A distribution center receives product from a number of suppliers. The products are sorted, combined and sometimes repacked onto pallets, and then sent out to multiple retail locations.
An simplistic example of retail cross docking would be: Three trucks arrive each carrying a full load of a different product: a truck load of laundry soap; a truck full of facial tissue; and a truck loaded with light bulbs. An hour later three other trucks leave the distribution center each headed for a different retail store. Each truck has a full load of a combination of laundry soap, facial tissues and light bulbs.
- Manufacturing Cross Docking – Cross docking in manufacturing works when a centralized distribution point receives incoming materials and products, then sorts and configures them to be shipped to various manufacturing locations. Each manufacturing location receives just what is needed for a defined amount of production. Manufacturing locations might be within a single facility or located in a number of facilities or locations.
- Transportation Cross Docking – This type of cross docking takes in shipments from numerous locations, sorts them, and then sends them out to their final destinations. For example, a truck from Chicago might bring shipments going to St. Louis, Denver and Nashville. Each of those shipments goes out on separate truck to each location. The truck from Chicago is filled with shipments going to Chicago and returns to Chicago.
Successful cross docking requires excellent communication, and that means having a DuraLabel printer to make needed labels and signs. With DuraLabel you can easily make highly visible, tough, durable signs and labels. Call DuraLabel at 1-888-326-9244 today.
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