Cross Docking involves receiving and sorting items from several suppliers for many retail stores on outbound trucks.
In the 1980s, Wal-Mart employed this approach. Two types of goods will be procured, commodities sold every day, called staples, and large quantities of products sold once and not normally stored again. This second method of procurement is called direct goods, and Walmart keeps warehouse costs as little as possible by using cross-docking.
What is cross Docking?
Cross docking is a warehousing strategy that involves the transfer of goods from inbound trucks or trains directly to outbound trucks or trains, without the need for intermediate storage. This approach is designed to reduce the time and costs associated with traditional warehousing by eliminating the need for long-term storage and reducing the handling of goods.
One example of cross docking in action is in the retail industry. Retailers often receive large quantities of goods from multiple suppliers, which need to be sorted, consolidated and then sent to individual stores or distribution centers. With cross-docking, retailers can receive the goods from suppliers directly at a cross-docking facility, where the goods are sorted and consolidated before being sent out to individual stores or distribution centers. This eliminates the need for long-term storage and reduces the handling of goods, which can save retailers time and money.
Another example of cross docking is in the manufacturing industry. Manufacturing companies often need to receive raw materials and components from multiple suppliers, which are then used in the production process. With cross docking, the raw materials and components can be received directly at the manufacturing facility, where they are consolidated and then sent directly to the production line, reducing the need for intermediate storage and handling.
Cross docking is not suitable for all types of goods or businesses, as it requires a high degree of coordination and planning to be successful. But when it is implemented correctly, it can provide significant cost savings and improve the efficiency of the supply chain.
Cross docking can also provide other benefits such as reducing inventory costs, reducing labor costs, reducing transportation costs and reducing the risk of stock outs. It also provides better control of the supply chain and helps to improve the customer service level.
What is Hybrid Cross Docking?
Hybrid cross docking is a warehousing technique that combines the benefits of both traditional cross-docking and warehouse storage. Cross docking is a logistics strategy where incoming goods are immediately sorted and shipped out to their final destinations, without being stored in a warehouse. This reduces the need for warehouse space and allows for faster turnaround times.
However, not all goods can be immediately shipped out, and some require additional processing or storage before they can be sent to their final destinations. This is where hybrid cross-docking comes in.
In a hybrid cross-docking warehouse, incoming goods are still sorted and shipped out as quickly as possible. But, if they cannot be immediately shipped, they are temporarily stored in a designated area of the warehouse until they can be processed or shipped out.
One example of a company that utilizes hybrid cross-docking is an e-commerce retailer. The company receives a large number of orders daily, and a portion of these orders can be fulfilled using items that are already in stock. These items are immediately sorted and shipped out to customers. However, some items may be out of stock or require additional processing, such as gift wrapping or custom engraving. These items are temporarily stored in a designated area of the warehouse and processed as needed. Once they are ready, they are shipped out to customers.
Hybrid cross docking allows for the fast turnaround times of traditional cross docking while also accommodating the benefits of warehouse storage. This allows companies to handle a high volume of orders while still providing a high level of service to customers.
In conclusion, cross-docking is a warehousing strategy that involves the transfer of goods from inbound trucks or trains directly to outbound trucks or trains, without the need for intermediate storage. It can provide significant cost savings and improve the efficiency of the supply chain. Hybrid cross-docking is an efficient warehousing technique that combines the best of both traditional cross-docking and warehouse storage, allowing companies to handle a high volume of orders while still providing a high level of service to customers. The e-commerce retailing industry is one example that uses this technique to improve the logistic process.