Cross Docking is to transfer the goods and materials from an inbound carrier to an outbound carrier without storing it at a warehouse. ( Ray Kulwiec)
It can help the company lessen the need for materials storage, speed deliveries and generally improve your supply chain management. In summary, Cross Docking helps improve the Inventory and Operation, to be more efficiency.
When a company implements a Cross Docking, the distribution operation would reduce normal processes to just:
- Advantages of Cross Docking including:
- Reduce the inventory and safety stocks.
- Reduce the cost of inventory on hand, as well as labor costs and the number of part damage
- Reduce the number of touches applied to materials, reducing the cycle time.
- Improve the flow of the material in the network
- Expediting the customer order
- Customer Satisfaction
Nonetheless, implementing Cross Docking is not easy, and needs a lot of consideration and preparation. It must be programmed and monitored carefully, and requires a good collaboration among all members of the chain.
The basic steps involved in implementation of Cross Docking are:
- An awareness of the demand at customer level (point of sale)
- Knowledge of the destination of incoming items even before their arrival at distribution centers, and
- The same unit of measure from both inbound and outbound carriers.
Be carefull, the Cross Docking should not be used to replace inventory. Late changes in customer order, disruption in production planning, and shipment disorder are all examples that make the inventory inevitable in supply chain network. But if it implements correctly then it improves the flow of goods in the network and will reduce the holding inventory.