Supply Chain Profitability – Cross Docking for Increased Efficiency
Cross docking is an excellent way to save money for both warehousing and manufacturing companies for streamlining, efficiency, and when time is of the essence. It allows items for products on customer orders to be transported directly from the receiving dock to the shipping dock. The cross-docked product can either be shipped alone or added to an existing order. The key is that the product never leaves the dock area saving the time and labor of transporting the receipt from the dock to a storage location and then picking the product from the storage location only to be brought back to the dock area. Cross docking is not transporting received product to shipping doors on the other side of the building as one warehousing professional recently told me.
Many companies are attempting to reduce inventory levels or convert to a “just in time” inventory model. They are also selling more imported products where they have less control of supplier on time performance, where the product can be subject to delay either on the ocean or at export or import docks, and because there are more layers in the supply chain, each being a source of potential delay. Throughput speed achieved by cross docking can be the difference as to whether the customer’s order is manufactured or shipped on time or the customer is disappointed and possibly penalizing you with charge backs for being late or going to competitors. Proper software support is essential for successful cross docking.
Three Different Ways to Cross Dock:
1. Direct transfer:
a) Determine how many cases or pallets of each received item are required for each customer order on hand or for a given route
b) At the Receiving dock place the number of cartons for each on a separate pallet
c) Transport each pallet to the appropriate staging area at the shipping door for each customer order or route
d) For manufacturing the quantities would be needed for immediate manufacture and transferred directly to the appropriate work cell to begin production
2. Order Picking:
a) Determine how many total cases will be cross docked
b) Move pallets with that total to temporary picking locations at the dock
c) The picker will pick the rest of the order as usual and then pick from the temporary locations on the way to the staging area to complete the order
3. Temporary circumstances
a) Inbound items are staged short-term and accumulated at a location near the dock (not put away) for a defined period, then shipped out as required.
b) This is an ideal solution when receiving huge volumes of a product that This is an excellent application for temporary high volumes such as items on sale or high-volume seasonal items, especially for pallet in/pallet out quantities.
There are ways to perform operations comparable to cross docking to get similar results. When raw materials and supplies are received there are several options to short cut transporting receipts to a raw materials warehouse and then to manufacturing zones or cells. Materials can be moved directly to pre-manufacture staging zones which will shorten travel distances and reduce handling and time vs. the storage location. Again, proper software is required.
1. Direct transfer, receiving dock to manufacturing cell. This works best for just in time situations, when receipts are late, or when customers are waiting for their orders. The software will direct put away of each material to a specific work cell location
2. Direct transfer, receiving dock to a manufacturing cell dedicated zone. This works best when product is being manufactured but more will be needed soon and none is in inventory, or the materials received will be used for the very next job in the work cell. This zone is set up near the manufacturing cell(s).
3. Direct transfer, receiving dock to manufacturing group zone. This works best when the materials received are in short supply and can be used to manufacture numerous products or can be used in multiple work cells. This zone is set up centrally to the group of the manufacturing cell(s).
Cross docking is an excellent way to improve customer service and save time and money but must be done correctly and with the proper system support.