Introduction
Cross-docking is an operational strategy employed widely in logistics and supply chain today. It involves unloading materials from suppliers and loading these materials to retailers or manufacturers in one consolidation centre or cross dock, without much storage in between. The focus on warehousing inventory traditionally is being switched to a quicker way to deliver goods from suppliers to end-users through flow in transit because of implementation of cross-docking operations. In addition cross-docking enables fast movement velocity and fast response as well as little inventory in order to improve performances of supply chains.
As speed and accuracy are the main concerns of customers’ it is necessary and inevitable to transform warehouse from a place for holding inventory to a processing terminal to distribute products as fast as possible at the lowest cost (Yang, Balakrishnan & Cheung 2010). Moreover increasing frequencies of orders, rising labour and fuel cost and growing number of distribution points contribute to the implementation of cross-docking to cut down pressures on supply chains. Therefore cross-docking operation is becoming more and more popular in logistics industry, especially for wholesalers.
In view of the vital role of cross-docking plays in logistics industry this report is to explore the reason for establishment of cross-docking systems, various types of cross-docking and benefits on distribution. Also the advantages and disadvantages are discussed in report.
Body
Definition of cross-docking
Cross-docking in logistics is defined as procedures in which products are distributed directly with keeping least inventory or storage time. Usually it is operated in a distribution terminal with inbound and outbound sides for receipt and transit. Products are received through an inbound dock before transferred to the outbound docks across a dock (Hagan et al. 2010). In a word cross-docking is an efficient way for shipment consolidation from inbound trailers and shipment deconsolidation including unload, sort and reload into outbound trailers with minimal or no storage in cross dock.
Purposes of cross docking
Four main purposes are for the implementation of cross-docking strategy. The first purpose is that Products are sorted in various categories in a central site so that the similar goods are combined to transport to different destinations in an efficient and fast method whereas the second purpose is that a number of small goods are consolidated into one big load for transport, which is also known as consolidation arrangements.
The third purpose is that large loads of materials get broken down into smaller one to make an easier method for delivery to customers and it is described as deconsolidation arrangements
Final purpose of cross-docking is to reduce cost of inventory, increase turns, consolidate product loads, increase throughput and decrease operation cost resulted from handling and storage (Vogt & Pienaar 2010). It provides a much more efficient method for rise of inventory velocity.
Importance to distribution and delivery
The key importance is to improve customer service. Fresh or perishable products are arranged particularly to customers over cross-docking on time or more quickly to preserve quality and freshness. It enables distributors and retailers to keep fresh product consistently (Gabreth, Hill & Handley 2008).
Another major concern is that Cross-docking is applied to get accurate mix of orders to the customer. In some cross dock in accordance with orders bulk goods is broken down into individual shipment of various product for one client by picking and packing in the dock. Thus preparations of store-ready order are done by suppliers before they are routed for delivery.
In addition cost control and
