Page 4 - Logistics News May 2016

cross-docking
Bridging the ‘Final Mile’
In a time when consumer demand is forcing
retailers to get their products to market faster,
a growing number of cargo owners are
looking to non-traditional practices to help
reduce the amount of time it takes to
process orders and route products. As
eCommerce and omni-channel have
become key focus points in the retail industry,
the need for streamlining warehouse
and distribution centre (DC) operations is
becoming more evident.
Acknowledgement to Ryder System
One practice used in the supply chain industry is cross-
docking – a distribution system where items received at the
warehouse or DC are not placed into stock, but instead are
prepared for shipment to another location, for retail stores more regulated labour costs are some of the top gains
or for direct-to-customer delivery. Once received at the
warehouse or DC, the materials are sorted, consolidated,
and loaded immediately onto outbound trucks, trailers,
railway wagons, or local delivery vans. Often viewed as an
alternative to traditional warehousing, cross-docking uses
the DC as a ‘sorting centre’ where materials pass through
but are never held in inventory. Cross-docking can realise
a cost reduction by skipping stocking and retrieval steps.
Roughly half of today’s cargo owners use
cross-docking, but another 40% either have no
plans to use it, or are unfamiliar with the practice. The
strategy can be used in various applications and settings.
From the manufacturing perspective, cross-docking
consolidates inbound shipments and supports just-in-
time assembly strategies. For distributors, it is used to
more efficiently receive incoming shipments and then
orchestrate deliveries once the last of those shipments
is received. This has particular significance for direct-to- on ‘Last Mile’ deliveries becomes significant – if managed
customer delivery.
Many of the world’s largest retailers are employing
cross-docking practices in their supply chain operations.
With speed, productivity, and efficiency becoming
increasingly important to all organisations, cross-docking
provides a viable option for companies intent on reducing
labour costs and handling times, eliminating the need
for picking and packing, and saving valuable order
lifecycle time.
Cross-docking processes come into play for the
management of outbound shipments with the majority of
companies using truckload (TL) and less-than truckload
(LTL) for outbound shipments. Other modes employed
include local small package, ocean, intermodal and
air cargo.
Through the use of cross-docking, organisations are
realising significant operational benefits that lead to
4 May 2016 • Logistics News
improved customer service and lower supply chain
costs. Shorter processing and delivery timelines, reduced
standing inventory, lowered storage capacity, and
that companies are seeing from the implementation
of cross-docking.
Operating an effective cross-docking strategy does not
come without its challenges, particularly in a business
climate where new transportation and related issues
surface almost daily. Rising freight costs and an inability
to adjust activity levels brought on by seasonal spikes
or special sales promotions, top the list of challenges
that can arise. Other problems include scheduling and
dock availability, a lack of process visibility, and limited
storage capacities.
Bridging the ‘Final Mile’
As increasing consumer demand is putting more pressure
on companies to speed products to market, there is a
stronger movement to employ cross-docking to improve
warehouse and DC efficiency. The impact of cross-docking
correctly.
Implementing cross-docking processes allows retailers
to increase efficiency and speed to market. One of the
main challenges facing retailers is that cross-docking is
not a core competency. Cross-docking also introduces
inherent issues and risks, especially for those organisations
that haven’t considered it in the past. Cross-docking
requires personnel skilled in the co-ordination of inbound
and outbound transportation.
Operating in a climate where customers demand
on-time and accurate orders every time, the use of
cross-docking gives companies a distinct advantage over
those that rely on traditional warehousing practices.
By outsourcing this function to an experienced third-
party logistics provider, retailers can reduce costs, meet
customer expectations, lower inventory investments, and
reduce processing and delivery times. •