Cross-docking can help your eCommerce company streamline its fulfillment processes, increase customer satisfaction, and reduce order fulfillment cycle time. This post explains the cross-docking process, how it works with full truckload (FTL) and less-than-truckload (LTL) inbound shipments, and how cross-docking services can improve your on-time delivery metrics.
What is cross-docking?
This just-in-time (JIT) fulfillment technique for order handling is a method of labeling products at the inbound docking terminal of a fulfillment warehouse, then moving orders directly to the outbound dock. Your 3PL provider serves as a sorting center, saving storage space and routing orders to the end customer more quickly. A dedicated cross-docking warehouse eliminates storage costs. However, even if you use the technique only occasionally, it can help streamline your fulfillment, leading to cost savings.
Why cross-dock?
The normal receiving process for an inbound shipment in a fulfillment warehouse is:
- Unload pallets
- Check actual inventory received against the advance shipping notice to ensure that all inventory is received
- Log SKUs into the warehouse management system for inventory control
- Use a forklift to move pallets to their designated spots in the warehouse
- Send pickers to pull SKUs as needed to fill orders.
Moving items into the warehouse can take a day or two, and picking can take an additional day. But what if every unit in a shipment is already spoken for because the product is back-ordered? Cross-docking can shave days off the time it takes to fill orders by moving goods straight to the outbound dock without logging them into inventory.
Cross-docking works well in eCommerce fulfillment for products shipped to the end consumer in the manufacturer’s packaging without the need for an additional box. Warehouse workers add labels to fill orders and move packages directly to outbound trucks, skipping picking and packing.
At Red Stag Fulfillment, our warehouse management system supports cross-docking for backorder management. We can turn around a full truckload in a day, in many cases, getting orders to their final destinations more quickly.
Types of cross-docking
Companies need to move outbound shipments quickly in fulfillment warehouses and distribution centers. Traditional warehousing can utilize cross-docking operations effectively in combination with other inventory management and storage strategies. A dedicated cross-docking facility will be laid out to efficiently move inbound pallets directly from the receiving dock to outbound trucks.
When used as a distribution method, cross-docking can be pre-distribution or post-distribution.
Retail distribution
Cross-docking is common in retail distribution centers, where trucks loaded with goods from manufacturers come in, and trucks carrying assortments of goods for retail locations go out. The inventory distribution strategy is a good fit because retail distribution generally operates on JIT inventory management. Therefore, products are re-sorted for outbound transportation shortly after they arrive in the warehouse.
The process in a retail distribution center might look like this: Three trucks arrive, bringing sofas, tables, and lamps from three different manufacturers. The cross-docking facility reorganizes the products, consolidating inventory from all three manufacturers into mixed deliveries for furniture showrooms.
Manufacturing
Cross-docking in manufacturing works in a similar fashion to retail distribution and makes material handling more efficient. A cross-docking warehouse receives materials and components and sorts them into sets before sending them to the factory. The process is also called a post-distribution consolidation arrangement. The distributor delivers the consolidated materials to factories, giving each facility exactly what it needs to complete the manufacturing process.
ECommerce fulfillment
In an order fulfillment warehouse, the process may be called opportunistic cross-docking because it’s typically used as needed. However, rather than a dedicated cross-docking facility, some fulfillment warehouses have the capability to use the process as needed to fill orders, in addition to more traditional warehousing operations.
Benefits of cross-docking
This product handling technique can reduce the number of touch points your products experience during shipping, reducing transportation costs and time in transit. Here are some of the benefits:
- Reduce costs by lowering warehouse storage costs, labor costs, and other expenses associated with inventory storage.
- Speed up package handling by bypassing pick and pack fulfillment during the shipping process.
- Improve shipping times because you remove the need for warehouse storage by unloading, repacking, and shipping products on the same day.
- Optimize your supply chain and simplify inventory management.
Cross-docking challenges
A cross-docking solution isn’t appropriate for every situation. Here are some cons of cross-docking:
- Demands on warehousing for increased docking space and layout changes to create clear cross-dock pathways.
- Added complexity during shipping due to the need to track individual products as they move from truck to truck.
Cross-docking FAQs
What is the meaning of cross-docking?
Cross-docking is the process of moving inbound inventory directly from the receiving dock to the outbound dock in a warehouse or distribution center. It is also used for material sorting and consolidation or deconsolidation prior to transfer to another leg of the supply chain. The cross-docking process moves goods in and out of the warehouse quickly without the need for inventory storage.
Why is cross-docking used?
Cross-docking streamlines the transfer of goods in distribution centers and warehouses. Warehouse managers can use the technique to move pallets of goods from one transportation mode to another. It’s also useful for the consolidation or deconsolidation of merchandise or to prepare materials for use in manufacturing. In eCommerce fulfillment, cross-docking reduces the time it takes for products to travel from the receiving dock to the outbound dock, often for processing backorders.
How does cross-docking reduce inventory, and what does it mean for supply chains?
Cross-docked shipments spend no time on warehouse shelves. That reduces inventory handling, though it’s critical to maintain tight inventory controls on these stock transfers. Cross-docking services form critical supply chain links, adding speed and efficiency to transfer points.
Who uses cross docks?
Retail distribution centers, wholesale distributors, manufacturing supply warehouses, eCommerce fulfillment centers, and multi-modal shippers may use cross-docking.
Red Stag Fulfillment: Your efficient order handling solution
Red Stag Fulfillment can often turn around an FTL shipment in a day using cross-docking. That helps our clients process backorders swiftly, increasing customer satisfaction. With our highly-trained logistics experts and innovative tracking systems, we can track your products from truck to trailer.
You need a partner that can help make sure your products get to your customer in a timely, efficient manner, and Red Stag Fulfillment is here to help. Find out how we take the worry of supply chain management off your shoulders.
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