Updated: Oct 8, 2021
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Cross-docking is a technique of short-cutting the logistical processes in warehouses. This is done through making the incoming goods not going through the entire inbound-proces (ie the put-away in a storage locatie is for example skipped), and goods are moved immediately into the shipment process.
Let's start with building some more knowledge on cross-docking 👉
The benefits are a.o.'s:
✅ Less handling
✅ Shorter lead-times
✅No occupation of the storage area's and possible less occupation of some of the processing area's
There are different forms of cross-docking including the following:
1️⃣ "Transportation cross-docking" (TCD)
The goods are already marked at the original shipper for cross-docking at the receiving DC towards another receiver. In most cases the goods are already packaged to support the down-stream shipping (Including being separately packaged or in a way that the cases are easily separated from a combined shipment).
Focus here lies on reduction of the transport-cost by (partially) combining the goods during a part of the transport route instead of direct shipping sending the goods directly they are send through a cross-dock.
Remark: a common version of this type of cross-docking is the loading of many packages in one and the same container; where these are separated down-stream.
2️⃣ "Opportunistic cross-docking"
In a opportunistic way goods that are arriving are "matched" with open orders. If possible instead of going through the entire picking-process goods of taking goods out of the storage locations; instead "fresh" arriving goods that are leveraged to full-fill outbound needs.
The focus lies here typically on the reduction of the handling-effort.
3️⃣ Pick from goods receipt" (PFGR)
A special type of Cross-docking is the "pick from goods receipt". Here the goods needed for shipping are pulled out of the receipts before these are put-away. Possibly not the entire receipt (of all products or all of the quantity) is needed for this "advanced" picking.
The benefit lies here in the reduction of the lead-time; i.e. the faster push of the goods towards the customers.
In the case of 1️⃣ all goods are already allocated to orders at the time of the original shipment from the supplier. This in contrast to 2️⃣ & 3️⃣ where it can be that the orders are only assigned at the time of receiving them.
Now that we are familiar to a number of the different cross-docking operations we can have a look at how to get started with cross-docking. 👉
This is done through the following questions;
1️⃣ What is the potential (volume and added value) suited for cross-docking?
While the introduction of this additional and often disturbing process bares a cost (extra complexity, increased error-rate, etc) its needs to be reviewed if its a good idea to set it up or not.
So the first question is how large is the volume and what is the added value of this flow?
2️⃣ What is the effort towards executing the Cross-docking?
Basically this can be split in: the cost to setup the proces & the processing cost.
One of the main elements of setting up the process will be the IT-side. Cross-docking needs to be supported by Information-Technology systems. So to be able to execute the information (of receipts and orders) needs to be available at the right moment.
It's only possible to perform PFGR if the orders are known and can be matched with the incoming goods. Also notice that in many systems for the goods to be available (thus known) they need to be put-away fully.
If the administrative (IT) side is not ready to support Cross-docking then the question is what the cost is of adding this functionality. Additionally the proper information flow and steering towards the shopfloor needs to be put in place. In many cases the cross-docking process is even more time-pressed then the standard-proces making that the steering becomes even more important.
Secondly there is the cost of running the cross-dock; along with the execution of the cross-docking often an increased effort is needed compared to the standard proces.
An essential part in minimizing this this will be the proper setup of the proces incl. assignment of space, means and the organisation to optimize this element.
3️⃣ Final question: Does the addition of the cross-docking in total bring a benefit for the supply-chain/organisation?
The added value of adding the cross-docking (1️⃣) is compared with the additional effort (2️⃣). This comparison allows to make the call to set it up or not.
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