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Cross-Docking & Its Benefits

Due to a variety of factors including rising costs, competition, and customer demands the supply chain and logistics industry continues to see a rise in the trend of cross-docking. That said it’s important for supply chain and logistics companies to understand these trends and the technology that can help them to exploit their benefits.

Let’s start by discussing what cross-docking is. Cross-docking is a procedure by which logistics companies and warehouses process inbound items that are first unloaded, sorted and then transferred to outbound trucks which transport them to their final destination. Essentially it is an in and out process where storage is taken out of the equation. By reducing or even eliminating the need for long term storage warehouse operations can increase efficiency and reduce fulfilment times.

Cross-docking processes can vary from one warehouse to the next but generally involve the following steps:

  • Inbound items are unloaded/received at designated inbound loading docks.

  • The items are verified against the expected quantities and labeled with barcode labels for scanning verification.

  • Items are sorted according to their destinations and brought to the outbound dock that corresponds to the outbound load the item will be transported on (this is where the barcode labels are useful as they will indicate the outbound load and dock the items should go to).

  • The items are then loaded onto the truck at the designated outbound dock and depart for their destination (again barcode labels can be scanned at this stage to do one last verification and ensure no items are accidentally loaded onto the wrong truck).

Generally speaking, the inbound and outbound trucks are scheduled in close proximity to one another to make the above operation run smoothly with little delay or downtime. All of this requires that a warehouse has real-time visibility across all points of their operations as well as immediate accessibility to information for workers on the ground. This is where a warehouse that is performing cross-docking activities need an infusion of technology to help them be successful. A robust WMS with cross-docking functionality will help in this regard.

Akatia Technologies’ WAM solution for Salesforce is an example of such a solution. WAM provides key cross-docking functionality and provides real-time data visibility and access to all part of the warehouse operation. The WMS will coordinate what items are coming in, at what times, and where they are going. As well in cross-docking activities communication with transportation providers is crucial to organize and direct incoming carriers. WAM covers this aspect by providing yard management features so that carriers and trucks can be scheduled in an organized way, and then have this information communicated to drivers before they arrive at the warehouse. This avoids confusion and congestion at the warehouse and allows cross-docking to be performed smoothly.

Furthermore, barcode scanning and mobile devices are another technology that can be leveraged to support cross-docking. As we discussed in our example barcode labels can be generated from the WMS with the inventory information, destination, outbound dock, and so on, which then can be applied to the items as they are unloaded and received. Once applied they become a unique identifier which can then be scanned at other stages of the cross-docking process. This not only improves efficiency by making the entire operation mobile but also greatly reduces errors from occurring. And with Akatia’s WAM solution real-time mobile scanning is a functionality that has already been built out through our WAM Mobile application.

The appeal of cross-docking for many warehouse operations, especially in the 3PL space, is quite significant. Cross-docking helps to reduce transit time and minimizes the time product sits in storage. In circumventing storage, the product can instead be immediately directed to its destination. This avoids steps like unpacking, putaways, movements, picking, packing, and so forth, making for a much leaner operation. As well, by reducing storage time a reduction in the risk of damage occurs since the warehouse is only in possession of the inventory for a limited time.

Of course, these types of gains in efficiency have a direct impact on cost savings. Storage costs money. The longer a product stays on a shelf the more expensive it becomes for the business. In cross-docking the product is immediately sent on its way. This not only reduces costs for the warehouse but also the owner of the inventory. Cross-docking also reduces labor costs as less people and tasks are required, and the focus now becomes turnaround.

Cross-docking also reduces transportation costs. With cross-docking transportation can be precisely coordinated so that it arrives when it’s required. This avoids idle times where trucks sitting and waiting empty. Also, inbound trucks (depending on the situation and scheduling optimization) can be immediately directed to outbound docks to take on new loads and transport them, thus maximizing the trucks on site and reducing the miles trailers drive empty. Furthermore, loads can be consolidated with cross-docking where items and loads going to similar or same destinations along a particular route. This maximizes the transport and reduces the costs for every customer’s load.

As we can see cross-docking is process that can help supply-chain, logistics and warehouse businesses save both time and money. By being aware of these types of industry trends and the underlying technology businesses can set themselves up for success, become more competitive, and meet customer demands more effectively.

If you’re thinking of introducing cross-docking to your inventory management or simply looking to do it better, click the link below to get in contact with us. We’d be happy to speak with you!


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