Introduction
Insights from industry
Is there any magic in
cross-docking?
Ewen Kinnear
The author
Ewen Kinnear is the former Director, Operations Support,
Exel Logistics, Milton Keynes, UK. He is now Logistics
Director of Clarks International.
Abstract
Exel Logistics’ experience in a number of industry sectors,
product profiles, operational techniques and technology
suggests that the outputs of cross-docking can appear
magical, even though they result from fairly standard
operational inputs. Explains the origins of cross-docking
and explores the operational aspects of switching from a
traditional stockholding supply chain system to a cross-
docking system, using a case study from the motor
industry. States that key benefits resulting from the
adoption of cross-docking techniques relate to improve-
ments in service levels, inventory levels, stock returns and
unit costs.
Supply Chain Management
Volume 2 · Number 2 · 1997 · pp. 49–52
© MCB University Press · ISSN 1359-8546
49
In broad context, cross-docking is not magi-
cal. However, the technique is a very powerful
business tool for supply chain management. It
helps to achieve the key business objectives of
stock reduction, fixed resource reduction and
more responsive operating systems. As a
result, the practice is finding greater applica-
tion across many business sectors.
This article considers the following areas:
• What is cross-docking: who practises the
art?
• What are the basic cross-docking opera-
tional models?
• Why do businesses choose cross-docking as
a logistical alternative?
• What are some of the issues and opportuni-
ties for cross-docking, now and in the
future?
What is cross-docking?
A simple definition of cross-docking is as
follows: receiving product from a supplier or
manufacturer for several end destinations and
consolidating this product with other suppli-
ers’ product for common final delivery desti-
nations.
The key to the process is transshipping, not
holding stock. Equally important is the
process of turning expensive delivery consign-
ments into economic loads through consoli-
dation and resource sharing. For many busi-
nesses it is essential to keep track of product
consignments as they progress along the
supply chain. An increasingly topical theme
for many businesses is manipulating product
into a user-friendly form for the end user.
The term cross-docking has a maritime
and railway background. From the maritime
perspective, ships would discharge cargo
“over the dock” on to smaller ships, barges
and wagons for consolidated economic deliv-
ery. The practice became popular and preva-
lent with the development of the railway
system, and especially when railways began to
carry product for industrial and private use.
Simple features included manual labelling,
vehicle manifest, integrated delivery/collec-
tion/trunking, trolleys, destination boards and
timetables. However, key cross-docking
elements were apparent: integrated resources,
no stockholding, sequenced operational
process.
 Is there any magic in cross-docking?
Ewen Kinnear
Basic cross-docking operational models
From a technical point of view, it is worth
looking at the evolution of an “intermodal
transshipment centre” which has operated in
the rail system. In its original stage, product
would move through the rail network to a
transshipment shed, trains would pull up at a
loading dock, porters would read each con-
signment label and consolidate consignments
in delivery run order. Ultimately, drivers
would convey consignments to final delivery
location and obtain a written proof of delivery.
The delivery driver would also make consign-
ment collections so that product could flow
back through the network (Figure 1).
Key cross-dock features are evident in this
set-up:
• shared physical resources;
• timetables;
• no stockholding;
• consignment tracking.
The forerunner to Exel Logistics operated
several of these transshipment centres at sites
which included Stoke-on-Trent, Birmingham
and London Kings Cross. The company
continues to operate out of these sites,
although their procedures have, of course,
become far more sophisticated.
Most businesses share common financial
objectives. In short, a business usually strives
to increase profit and reduce working capital
(see Figure 2).
The cross-docking operational model,
allied to a capital reduction programme,
electronic stock transaction control and some
form of process re-engineering, will assist any
business in achieving its objectives. A cross-
docking strategy will help move most of the
key business ratios in the right direction;
however, it is important to note it is not the
Figure 1 Cross-docking: historic origins
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Volume 2 · Number 2 · 1997 · 49–52
Figure 2 Why is cross-docking important?
only logistical tool to achieve key business
objectives.
Over the years many terms, techniques and
supporting technologies have grown up
around cross-docking. For example: consoli-
dation, processing centres, just-in-time,
product customization, satellite tracking, bar
code tracking, etc.
Driven down to lowest common denomi-
nator the possible operational alternatives are
very simple. In the cross-dock arena there are
two classic consignment processes:
(1) product sort; and
(2) final destination sort.
Product can flow in and out of both processes.
Sometimes operations use both simultaneous-
ly. However, for definition and clarity the
following description is fairly common.
In the product sort model the original send-
ing location will despatch a complete consign-
ment of one product code covering all final
destinations. The transshipment centre will
receive a series of these product consignments
and break them down into common final
delivery order (Figure 3).
Frequently in the product sort model the
sending location lacks the time and/or space
to sort by final destination.
In the final destination sort model the original
sending location will pick and label each
consignment for the final destination at
source (Figure 4).
Clearly, if we know the final destination of
each consignment at the original point of
despatch, this can speed up the cross-dock
process. Usually a label or, at best, a bar code,
is attached to each consignment at despatch
and this label or bar code is read each time the
consignment is handled subsequently.
 Is there any magic in cross-docking?
Ewen Kinnear
Figure 3 Operating methodology: product sort
Figure 4 Operating methodology: destination sort
In their simplest sense these two cross-dock
models are applicable across almost all
business applications.
Why do businesses choose cross-docking
as a logistical alternative?
Cross-dock techniques are applied universally
across a wide range of businesses working in
many market sectors. Within the UK, specific
examples are found in the automotive, food
and retail sectors, covering products in a
diverse range, from fruit to headlamps, and
across all temperature ranges.
In each case similar basic issues recur, such
as:
• product labelling;
• containerization;
• product handling;
• information transfers;
• process timetables;
• product consolidation;
• resource utilization.
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The basic business motivations for utilizing
cross-dock techniques include increased stock
flow, reduced stockholding, improved
resource utilization and reduced delivery lead
times. Increasingly, cross-docking is used to
manipulate product into user-friendly final
delivery point order.
Case study: Goodyear GB Ltd
Goodyear Great Britain Limited is a good
example of a business which chose to move
from a traditional stockholding supply chain
operation to a stock-flow/cross-docking sys-
tem. It was combined with a version of
shared-user distribution unique in the tyre
industry.
Until 1994 Goodyear GB operated a fairly
traditional supply chain strategy. Product
entered the supply chain from the manufac-
turing location at Wolverhampton, and
through import into one of two central ware-
house facilities. Product then moved to
replenish stock held at one of four regional
distribution centres (RDCs) at Barnsley,
Bristol, Warrington and Borehamwood.
From the RDC, product was moved direct-
ly, or through one of seven outbases, to one of
the many hundred end-user delivery points,
including leading distribution networks like
Kwikfit, ATS, NTS and Charlie Browns.
The shortcoming of this operating system
was that it required a large commitment to:
• dispersed stockholding;
• capital assets – poor utilization;
• high levels of manning;
• low stock turn – high inventories;
• high administration and logistics costs;
• poor vehicle utilization.
Consequently, the supply chain was sub-
optimized in terms of cost and service
potential.
Goodyear GB, in conjunction with Exel
Logistics and others, developed some clear
business objectives which would derive from a
new stock-flow/cross-docking system:
• allow rationalized central warehousing;
• consolidate overall stock levels;
• maximize stock visibility;
• 100 per cent next day delivery;
• improve operating system flexibility –
especially high/low flows;
• develop core sales/manufacturing focus;
• deliver acceptable cost reduction –
warehousing and transportation.
 Is there any magic in cross-docking?
Ewen Kinnear
In short, the business decided that it would
work to improve the lead time from manufac-
ture to point of sale, at significantly reduced
unit cost and reduced pipeline inventory
costs, while improving future operational
flexibility.
Because of time and space restraints at the
Wolverhampton Central Distribution Centre,
Goodyear GB decided to choose the product
sort dock model at Break Bulk Centre level.
Each day the central warehouse would consol-
idate that day’s orders in product categories
covering all outlets within a distribution
region, and despatch bulk product loads to
other regions. The receiving cross-dock centre
would then break down and sort each bulk
consignment across all relevant final delivery
locations within that distribution region for
next day delivery.
Goodyear operates a central sales order
processing facility called Tyreline. Orders are
captured between 7.00 a.m. and 5.00 p.m.
each day. The traffic and warehousing func-
tions produce a provisional operational plan
between 2.00 p.m. and 4.30 p.m., considering
picking requirement, trunk requirement and
delivery resource requirement. This plan is
confirmed at 5.15 p.m.
After the operational plan is confirmed, the
central warehouse picks in product code order
between 6.00 p.m. and 10.00 p.m.. Tyres are
then moved in a series of scheduled night
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trunk vehicles to the relevant cross-dock
centre – Kings Cross, Bristol or Warrington.
The cross-dock centre will then systemati-
cally break down each product consignment
receipt across final delivery points between
1.00 a.m. and 5.00 a.m. for next day delivery.
The trunk vehicles collect return pallets and
product from each cross-dock centre, includ-
ing a high volume of work trunk casings for
reprocessing. At the cross-dock centre
Goodyear GB utilizes supplier property,
vehicles and human resources.
Against its initial objectives, Goodyear GB
has achieved the following outputs:
• Service level. Next day UK, from 87 per
cent to a mean average of 96 per cent.
• Stock hold. An overall inventory reduction
of 16 per cent on value.
• Stock return. An improvement of 14 per
cent.
• Property. The release of more than 12,500
square metres (135,000 square feet) of
warehousing.
• Vehicles. The release of all contract hire
commitments.
• Headcount. A useful reduction contribu-
tion.
• Unit cost. Reduced operating costs in real
terms by over 12 per cent.
Goodyear GB’s physical operations can now
handle volume fluctuations with less fixed
cost penalty and with improved service levels
and accuracy rates.