Cross-Docking Distribution

Center (DC)

Three ways for the distribution

1. Traditional Warehousing/Distribution, in which
vendors ship goods to retail DCs, where the goods are
stored until store orders need fulfilled, where they are
then picked (often using a "wave" process" for batches of
stores) and delivered to the stores.
2. Crossdock DCs, in which shipments from inbound
suppliers are moved directly to outbound vehicles, with
very little if any storage in between. In the best possible
situation, products never touch the floor or a shelf,
though some amount of staging is often used.
3. Direct to Store Delivery, in which vendors ship goods
directly from their own facilities to retail store outlets.

The trade offs of crossdocking

Traditional

Crossdock

Direct to Store Delivery

Cross-Docking
Cross-docking favors the timely
distribution of freight and a better
synchronization with the demand.
It is particularly linked with the retail
sector (often within large retailers), but
can also be apply to manufacturing and
distribution.
Cross-docking is mainly dependant on
trucking.

Advantages of Cross-Docking
Minimization of warehousing and economies of
scale in outbound flows (from the DC to the
customers).
The costly inventory function of a DC becomes
minimal, while still maintaining the value-added
functions of consolidation and shipping.
Inbound flows (from suppliers) are thus directly
transferred to outbound flows (to customers)
with little, if any, warehousing.
Shipments typically spend less than 24 hours in
the distribution center, sometimes < 1 hour.

Direct to Store Delivery

LTL Less than Truckload

Cross-Docking

TL Full Truckload

Cross-Docking DC
Suppliers

Receiving
Sorting

Shipping

Customers

Pre- and post-distribution

In pre-distribution cross-docking, the
customer is assigned before the shipment
leaves the vendor, so it arrives to the crossdock bagged and tagged for transfer.
In post-distribution cross-docking, the crossdock itself allocates material to its stores.
For example, a cross-dock at a Wal-Mart
might receive 20 pallets of Tide detergent
without labels for individual stores. Workers
at the cross-dock allocate 3 pallets to Store
23, 5 pallets to Store 14, and so on.

Comments
Pre-distribution is definitely more difficult
to implement because the vendors of the
cross-dock must know which customers of
the cross-dock need what before they
send the shipment.
This involves quite a bit of information
transfer, system integration, and
coordination.

The Cross-docking requirements

The systems for a successful crossdocking on a large scale include:
automated material handling,
warehouse management systems
(WMS),
order processing systems,
quality controls systems,
strong relationships between supply
chain partners.

Automated material handling systems

An automated cross-docking system typically
consists of a series of conveyors for receiving
and sorting cases.
Barcode scanners read an identification code
on each case to track the product through the
cross-dock system and, based on information
from a WMS or an order system, the
automated system sorts the cases to trucks or
pallets for shipping.
Bartolini Roma Sorting.wmv

Warehouse management system

Controlling the flow is critical in cross-docking.
A WMS accomplishes this by receiving
product information via WEB or EDI and
keeping track of product movement.
It supports the real-time requirements of
cross-docking, receiving order details from
customers and later informing them of the
shipment's carrier and arrival date and time.
The WMS also tracks warehouse
performance, including labor and dock
utilization.

Importance of tracking performance

Cross-docking demands a reallocation of
resources, shifting the emphasis away from
storage and order picking to receiving and
shipping.
For example, peak workload may intensify
because it's more difficult to evenly
distribute workload in cross-docking.
Thus, the peak workloads length and when
it occurs must be studied to utilize labor
and dock equipment most effectively.

The software
Business systems may require special
functionality to efficiently allocate inbound goods
to existing orders, matching supply to demand.
Some WMS permit opportunistic cross-docking
functionality to allocate received product to
current demand in real-time.
And there is little stress on software systems
when buyers predetermine distribution for
special purchases or seasonal items.

Quality control (QC)

Stringent yet agile operations are
increasingly important as the volume of
cross-dock business increases,
especially when handling new suppliers.
Good QC is essential to avoid delays,
bottlenecks, or the costs associated with
shipping inferior product.

Partner relationships
Failing to establish a good working
relationship with your supply chain
partners can lead to failure in a crossdock endeavor.
The sharing of information, clear
communication, confidence in the quality
and conformance of goods, and product
availability are a few characteristics that
produce effective cross-docking.

The plan
Although the concept of cross-docking is
simple, its implementation is complicated.
Careful preparation is a must.
Logistics managers who want to switch to
this rapid system have to first establish a
formal plan, including starting a crossdocking pilot program and evaluating its
effectiveness.

The implementation
Once the plan is set, logistics managers
must partner with other members of the
supply chain to implement the system.
Since cross-docking affects the entire
supply chain, everyone's cooperation
must be gained and adjustments made
wherever necessary.

The cost structure adjustments

For example, if manufacturing has to pay
extra costs to enable cross-docking
through the supply chain, then the
manufacturing cost structure must be
readjusted appropriately.
This applies to every member of the
supply chain, such as trucking and
packaging.