Cross-docking is a popular approach to logistics and supply chain management that helps businesses lower the costs incurred on storing goods. It focuses on sending the products from the manufacturer directly to the end consumers with minimal inventory storage. Thus, cross-docking solutions allow companies to expedite the shipping process and lower their inventory levels, material handling costs parallelly. One needs to use a dedicated warehouse management software since it requires synchronizing with the human resource availability, order management, and logistics partners on a real-time basis.
The products received from the supplier/manufacturer are placed at an accessible location in the warehouse where they can be loaded and unloaded easily. Instead of sending them for storage, the goods are left at the spot and then sorted for any repackaging and distribution purposes. The warehouse employees also perform quality assurance checks before dispatching the goods to the end-users.
Once these processes are executed, they are picked up by the logistics partner right away. The gap between unloading and re-distributing the cargo is kept as minimum as possible. The same human resources are used to unload, process, and reload the goods before they are utilized in other tasks. As a result, the shipment spends little to no time at the warehouse based on the complexity of material handling and QA procedures followed. This method is referred to as cross-docking.
Wondering How To Automate Tariff Agreement Creation For Your Transport Business? Get In Touch With An Expert At PL Solutions Now!
As we saw above, all processes need to be synchronized seamlessly for achieving minimal material handling and shipping the items accurately. Right from the unloading/loading staff, the quality assurance team, security, and administrative staff need to follow a tight schedule. It is also necessary to coordinate with the logistics companies to prevent the goods from stalling operations at your warehouse.
A warehouse management software (WMS) takes all of these factors into consideration and coordinates different resources required for the execution. This includes bi-directional data transfer with the order processing system, inventory management module, shipping management module, and accounts software. It also generates the number of human resources required and shares the schedule with the concerned personnel.
The WMS also helps you with the list of material handling equipment required. Thus, it helps you with planning and scheduling while also confirming the progress rate of the execution process. It uses the barcodes/RFID tags and manual inputs to track the progress and generate BI reports later.
The advantages of leveraging a WMS solution for executing cross-docking that lead to cost optimization are as follows:
- A considerable reduction the labor overheads
- Reduced material handling hazards and time
- Reduction in the time required to ship the product to the customers
- Greater control and visibility over the distribution process
- Reduced warehousing costs as well as ancillary costs like insurances
- Overall improvement in warehouse management efficiency
- Reduced risk of proliferation
- Increase in the warehouse facility’s utilization rate
- Reduction in transport costs as multiple packages with common destinations are shipped together
The below type of items benefit the most from cross-docking, but their palettes must be labeled with barcodes or RFID tags along with the stock transfer reports for individual boxes, palettes, and entire shipment:
- Time-sensitive products that need a controlled environment like food products and medical items.
- Products whose quality is guaranteed by the manufacturer.
- Goods with steady demand outlook.
- White labeled products.
- Goods sent under a dropshipping business model.
While there are numerous benefits of implementing cross-docking, one needs to be cautious with it. You will require a SaaS-based warehouse management software to coordinate the processes mentioned above and train your staff accordingly. Any inaccuracy can derail operations on the receiving end significantly, thus posing a big threat to your reputation as well as profitability.
PL Solutions is a leading logistics and operations consulting firm committed to delivering class-leading solutions globally. We have a diverse talent pool of subject matter experts that will devise tailored solutions for implementing cross-docking through your warehouse management software. To get expert insights into cross-docking and technical support required, fill this contact form and our client servicing representatives will get back to you.