The supply chain has various possibilities for improving and accelerating the flow of products between its individual links. Opportunities for improvement can be found in various spheres of its functioning: informational, communicational, or organizational. In the latter, organizational solutions related to the flow of products through warehouses, known under the general term of cross-docking, play an important role. However, its implementation goes beyond the sphere of warehouse organization. It concerns primarily its external relations, and the success of cross-docking implementation depends to a large extent on the mental sphere, as it requires far-reaching integration from trading partners, the ability to compromise in terms of sharing costs and benefits, and reliability in operation.
The essence of cross-docking
Cross-docking is a set of activities related to unloading, loading, sorting, or consolidating batches of goods carried out in a warehouse, directly between external transport means (semi-trailer of a truck, railway wagon) located at receiving and shipping docks. Cross-docking enables a direct, convenient flow of goods in a simple way, from receipt to shipment, with the elimination or reduction of all additional, intermediate activities related to storage and the amount of material handling in the warehouse. It constitutes a logistics strategy in the warehouse that eliminates activities related to handling products that generate costs. By eliminating product storage stages, unnecessary putting away, and picking in the warehouse before sending them further, it enables the reduction of expenses for handling and storage and minimizes the amount of product downtime on the way from production to the destination. Cross-docking is a distribution method that defines the relationships between suppliers, wholesalers, and retailers, as well as other specified participants in the supply chain, requiring internal and external synchronization in the movement of goods.
In the traditional warehouse model, inventory is maintained until a customer order for a specific product is received, which is then picked, packed, and shipped. Incoming replenishment stock is stored until it is ordered again by the customer. In the cross-docking model, the customer is familiar with a specific product before it is delivered to the warehouse, and therefore products do not require additional storage. In this sense, it constitutes a physical exchange of inventory between two partners within the supply chain. The cross-docking method is an important element for Quick Response (QR) and Efficient Consumer Response (ECR) strategies, offering alternative ways of delivery and product handling that can be directed to efficient distribution and enabling the reduction of inventory management costs in the distribution network. Consequently, this method leads to strong links between manufacturers, distributors, and retailers. It is addressed to high customer requirements in terms of delivery speed and service level.
Good service of the distribution network requires a direct flow of cargo along the supply chain, which depends on excellent planning and effective handling of internal and external shipments. The use of cross-docking requires the use of a Warehouse Management System (WMS) in real-time. Processing (sorting, consolidating) batches of goods from various suppliers into many diverse assortment sets, adapted to the current needs of the recipient, requires a large area for a staging platform, where incoming goods are temporarily set aside for preparation for release and loading onto external transport means.
Managing the logistics process by introducing cross-docking enables a radical reduction in the delivery cycle time to the recipient from one to 24 hours, mainly through:
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fast flow of information between the manufacturer, distributor, and retailer, through the use of appropriate information technologies (EDI, EPOS, barcode, etc.)
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changing the ordering system to a system based on delivery scheduling, allowing for better planning and coordination of transport
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interdependent scheduling of unloading and loading work in the warehouse
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simple and fast transshipment activities, appropriate to the form of the transshipped cargo.
As foreign experience shows, the cross-docking method is well accepted by supply chain participants. Appropriate, noteworthy benefits of cross-docking have been adapted to practice by manufacturing and distribution companies in the United States. Based on the opinions of 547 American companies, professional participants in the supply chain, Table 1 presents selected benefits obtained as a result of introducing cross-docking.
The article comes from the magazine “Logistyka” 1/2009.