A guide to the risks and benefits of cross docking and how to do it better.
When done well, cross-docking will speed up deliveries, reduce your costs and lower your risk of damaging freight.
But cross docking needs to be done right. Or you risk losing goods, missing time windows, increasing labour and skyrocketing costs. So, how to strike the right balance?
Let’s take a closer look at the importance of cross docking and run you through five of our top tips for increased efficiency, time and profits.
What is cross docking?
Cross docking is the process of unloading inbound freight and loading it directly into an outbound shipment. This means that there’s little to no storage in between.
When operating on a cross docking model, a distribution center functions essentially as a sorting centre rather than a warehouse or storage facility.
The main function of the distribution centre is for goods to move quickly through to the next stage of the supply chain. This means storage space is minimal and the facility must be highly organised regarding inbound and outbound shipments.
Once sorted, inbound shipments are loaded directly into the outbound shipment (or shipments) and they should generally be processed and depart within 24 hours of arrival.
Advantages of cross docking
There are many advantages of cross docking. The main one is that it streamlines your supply chain because there’s no need for a true distribution centre. So, warehouse management and storage costs aren’t a factor and the product is usually moved on more quickly.
Reduced inventory handling means you’ll also reduce labour and inventory holding costs as well as potential damage. Additionally, reduced storage times and faster processing means that your goods get delivered faster.
Potential risks and disadvantages
There are also some disadvantages to cross docking, with some significant risks and considerations to appraise.
Thorough, highly visible tracking is absolutely vital. There are potential risks with the increased freight handling and labour too, but that’s usually balanced out by the reduced handling and labour associated with no longer needing warehouse storage. You’ll also need to consider the storage capacities of your supply chain partners.
The most significant consideration, though, is that an automated management system becomes essential.
You’ll need to invest in: automation, visibility, inbound/outbound logistics, and an appropriate transport fleet that are all able to communicate properly. Without this investment, you risk being too slow, losing freight and generally operating well under peak efficiency.
5 tips for better cross docking
Okay, so how do you improve your cross docking operations? Let’s run through our five best tips.
1. Choose the most appropriate platform shape for your business
Cross docking facilities are generally designed in an "I" configuration (an elongated rectangle). This shape maximizes the number of inbound and outbound doors in the facility while also keeping the floor area to a minimum. Research tells us that this shape is ideal if you have 150 doors or less, and if you have 150–200 doors, a "T" shape is more cost effective. For facilities with over 200 doors, the most ideal shape is an "X".
2. Allow a significant amount of space for staging
Available space strongly affects the efficiency of your cross docking facility, even for smaller operations. You’ll have at least two trailers present for every shipment because of the short transition between inbound and outbound loads.
So that there’s minimal disruption, you need to make a significant amount of yard space available. This means that both inbound and outbound trailers will have enough space to stage properly.
3. Use conveyor systems to move products within your facility
We’ve established that freight must be constantly moved from one loading dock to another in a cross docking model.
Carrying this movement out manually is neither the most efficient nor the safest method. Where possible, setting up conveyor belt systems will expedite your movement of freight from one dock to another.
Gravity rollers and other moveable conveyors are efficient options that don’t take up much space. These conveyor systems also help to reduce potential damage to your freight by reducing the amount of time it’s handled.
4. Utilise an automated management system
There’s no doubt about it, a cross docking operation has a lot of moving parts. You need to consider:
- Initial delivery
- Unloading the inbound shipments
- Transition to outbound (the literal cross docking)
- Preparation and loading into outbound vehicles
- Final delivery out of the facility.
Just one or two inefficiencies in this process can cause major delays or damage your freight. An automated management system will reassure you with optimal efficiency (and reduced damages).
We wrote a guide to implementing a TMS to help you decide what system is right for you, and learn how best to make the switch.
5. Keep your facility clean and organised
This one seems obvious, doesn’t it? But sometimes the most simple things are overlooked. Maintaining an uncluttered facility is vital to smooth cross docking.
If there are any obstructions, your staff won’t move freight efficiently from one dock to the next. Allow time and design their workflows so that this transition space is cleared a few times every day.
Over to you
We hope this article has given you a better understanding of the importance of cross docking (and getting it just right), and that you feel better able to implement more efficient cross docking practices in your business.
Has it got you thinking about where you can make improvements to run your facility more efficiently? We’d love to hear your thoughts. Get in touch or call for a chat today.