Cross docking: transport of goods on the spot

Without a doubt, reducing time, costs and increasing productivity of any company, whatever its type of business, is a vital need that is increasingly evident and demanding.

In a globalized and highly competitive world, which demands the coverage of multiple needs to be satisfied, it becomes more and more imperative, the action of corporate strategies, which allow to make the businesses more productive or at least, to comply with the processes with a greater control.

Receiving or sending merchandise or meeting a product need, of any kind, can cause great production losses, increase costs or even great frustration and headache for large companies and their customers or for individuals in their daily lives.

Applying new tools in operations logistics is vital. Every second of time counts and costs money, for you, for the company or for those customers or individuals who require services or products.

In this sense, we will refer to a way of consolidating and preparing your product shipments that avoids those high costs, reduces time and even helps you increase the productivity of your company.

What is cross docking?

Although it sounds like an extreme sport, it has nothing to do with exercise. Cross docking, as its Spanish literal translations indicate, is a technique in logistics that seeks greater efficiency in the supply chain. 

In the warehouses is a type or form of preparation of orders and shipments, without placing the goods in stock or inventory, or picking operation, avoiding the storage of products, in order to reduce operations in logistics.

The cross docking, is part of the structure of the processes to develop in transport logistics and storage of goods. It is conceptualized as the way to quickly take a product or merchandise, unloaded from an arrival transport, directly to a loading vehicle for its departure.

Key factors in cross docking

To increase significantly the performance in the reception of requests to suppliers, customer guarantees and movement of goods, as well as to reduce the failures in these activities are key factors, since in a warehouse the errors in reception of entries, sometimes are dragged to the shipment, to the final customer.

Executing, moving or receiving your merchandise in just 24 hours can avoid many inconveniences on a general level. Loss of merchandise, damage, theft, delays in production, cost increases due to time, in short, a chain of problems and possible errors that can easily be avoided, complying with the form of cross docking.

For this and other reasons, it plays a fundamental role, because it refers to consolidation and order preparation, where the goods are distributed directly to the user, without going through a previous storage period. 

Who is the cross docking for?

In this form of logistics relocation, the product, article or merchandise is indifferent. 

This type of process can be very well applied for large companies that require raw materials, such as those that request finished goods or components for factories, physical stores or final customers. It can be adapted to any production process.

One of the peculiarities of cross docking is that the goods do not remain in the warehouse for a long time - and are delivered expeditiously to the truck or transport where they will be moved to their final destination.

The same meaning from English to Spanish, refers to its shape, crossing springs or crossing springs, as it is a simple operation and direct delivery, without producing its placement in racks or picking.

Advantages of cross docking

This method of moving goods is not new. Already many companies and users have adapted and welcomed it into their supply chain. 

The main thing in such a case, before adding it as a strategy, is to analyze and verify its advantages and disadvantages in the company's activity or as a private client.

Its advantages of use can be referred to: reducing space in warehouses, costs and delivery times, optimizing the number of operations and cargo handling, increasing productivity generating efficiency, as well as, the faithful respect for the supply chain in the environment.

In short, it is aimed at improving the overall profitability of the wineries or distribution centers, reducing operating time, as well as optimizing resources of various kinds within the production chain.

Disadvantages of cross docking

As already mentioned, its use must be very well analyzed and evaluated, as to the type and form of business that the company carries out, how it develops it, or in such a case, under the needs of the client or user.

Among the potential risks that may arise, there are

  • Investment release, i.e. a redesign of the warehouse to reserve space for the conditioning area and/or the adoption or configuration of a warehouse management system to assist automation in this form of logistics.
  • An accurate and fully effective coordination of the entire supply chain, which implies: that the labelling system between suppliers and recipients is common and compatible, as well as, Relating the information environments of each unit (management programs, inventory and more).
  • Planning and coordination are basic laws for its effectiveness: without a synchronization between supply, demand and adequate planning, it is not advisable to make use of this form of logistics in the warehouse. It is for this reason that in the general application of cross docking, one must have the correct appreciation of time, in order to synchronize the operation of both strategies. 

What is needed to apply cross docking?

Putting this technique of transporting goods into practice can provide a company with various business opportunities, can increase efficiency and effectiveness rates, save money or minimize expenses and even provide better service to customers.

It can turn your business towards having a competitive advantage in a particular type of market, so it is necessary when choosing to take it into account:

  • Select the right products.
  • A design of the flow of goods and its relationship with the work area.
  • ICT support, for the dissemination of information, among those who will make the cross docker: suppliers and points of sale.
  • Staff training.
  • Appropriate suppliers to avoid non-compliance.
  • Effective transport management.
  • There must be perfect coordination between: suppliers, warehousemen, transporters and end users.

When should cross docking be used in the warehouse?

Although it is true that this way of transporting or storing goods must be very well analyzed by the company or the customer, there are exceptions or scenarios, which can lead us to take the decision of its immediate application.

These circumstances may be related to:

  • Massive purchase of goods with a stable demand: in this case the flows remain constant and can be "predicted", with a small margin of error. This allows good planning of cross docking operations and eliminates the need to store large amounts of safety stock.
  • Reduced shelf life or expiration date: in the case of the food sector, products must be in the most appropriate time, in order to maintain an optimal state for consumption. On the other hand, costs linked to refrigerated storage are saved.
  • Special promotion or discount products: this is an effective way to respond to peaks in demand quickly. This technique is commonly used in retails and discount stores, due to being a sector where mass consumption predominates.

Valuable goods with tight delivery deadlines: such as high output goods, for example furniture and white goods, in which it is necessary to comply with the deadlines established for customer satisfaction. In order to save costs or for the merchandise to depreciate or lose its competitive advantage, many distribution companies avoid having large quantities in warehouses or in their physical store, and instead make their orders and deliveries directly when the merchandise arrives.