The precise definition of cross docking is “a logistics procedure where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time.”
Seems simple enough, but there are several factors to consider that make cross docking in warehousing a challenge—the first of which is distance to the customer or retailer. To lower the handling time, suppliers must be located in somewhat close proximity to those locations. What this has typically meant for businesses is that they set up warehouses in densely populated areas so they can quickly deliver on demand.
While this works for customers or retailers in heavily populated areas, it still presents a problem once you move on to areas that are outside of city limits. The entire cross docking concept is predicated on setting up a cross dock warehouse in more remote areas so demand is still met at a reduced travel time and with as little handling in storage facilities as possible.
How Does Cross Docking Work?
Now that we’ve answered the question of what is cross docking, we can move on to the next question: how does cross docking work? In any business where you are selling products, those products are transported via truck, ship, airplane, or whatever other type of transportation you can think of. Typically, products are transferred to a warehouse where they are stored for a period of time before being shipped to the retailer.
When doing a cross docking, products are taken from the original mode of shipment—truck, ship, airplane—and immediately repackaged and loaded back onto another mode of transport to be sent to the retailer. Sometimes there are products that are staged at the warehouse, but the goal is to move the product with minimal storage or handling.
When Is Cross Docking Used?
Cross docking is used in many situations because there are many benefits for a business. Particularly for e-commerce businesses, crock docking in warehousing should be considered a fulfillment solution. Some of the immediate benefits of cross docking include the following:
Simplifying the loading process allows for quicker turnarounds. Products are able to reach their destination in less time, which improves customer satisfaction. The efficiency of the cross docking system creates a competitive advantage for businesses looking to keep up with increasing customer demand for faster and more reliable delivery.
What cross docking in warehouse management does is reduce the need for any long-term storage of products. The reduction in long-term storage minimizes the costs of picking and packing, along with inspecting the products. These savings can be significant for businesses if they are able to partner with a fulfillment company that can effectively execute cross docking procedures.
Reduced Inventory Management
Another benefit of cross docking is that it decreases the time spent on managing inventory. Fewer hours spent on dealing with inventory means that time can be allocated to other tasks, which in the long run is another means of saving money through efficiency.
Is Cross Docking the Solution for My E-Business?
This is a good question and you have to know if and when doing cross docking makes sense for your e-business. Traditionally, the most suitable times for implementing a cross docking system are when there is a known demand for a specific product or group of products.
This demand can present itself in different promotional offers, or it can be guided by a particular season. For instance, if your business is having an extended Groupon sale of a specific product, or a product that has been historically been successful has just hit the market, then this would be a good time to consider cross docking.
As far as seasons go, the holidays are a top-selling season for many retailers. If this is the case for your business, then organizing some cross docking for that period of time would be advantageous. Remember that speed is the primary benefit of cross docking. You want to be able to manage the demand for your product and get it out to customers as fast as possible. Cross docking ensures that retailers are happy and that most importantly, your customers are satisfied and their demands are being met.
And that is one of the main reasons why businesses are turning to cross docking more often. E-commerce has given customers all the power when it comes to choice. Companies need to be able to distinguish themselves any way they can, and often that is in the manner in which they deliver their products. Customers want their products quickly and they want them cheap, and lower delivery times and costs are synonymous with cross docking.
APS Fulfillment Inc. is a leading order fulfillment service company that operates out of Miami, Florida. Our integrative approach tackles supply chain management, real-time inventory management, warehousing services, shipping, and everything else needed to ensure your goods get to their destinations. We’ve stored, sorted, delivered, and quality-assured products of all shapes and sizes for all kinds of companies across a wide variety of industries. Contact us by phone at 954-582-7450 or reach out to us by email at [email protected] for more ways our fulfillment services can support and grow your business.