Cross Docking

1) Definition

Cross-docking is particularly used in the retail sector, but it also applies to other sectors as manufacturing and distribution. Cross-docking consists in receiving products from various suppliers on a logistics platform, sorting them directly to be shipped to various customers. There is thus no storage operation. The customers orders are constituted by parcels from various suppliers.

2) Types of cross-docking

We can distinguish 3 kinds of cross-docking:

• the supplier prepares "one-customer and one-item" or "one-customer and multiple-items" palets. Sorting operations (allotment) are realized by the supplier.

• the supplier prepares "multiple-customers" palets. Sorting operations (allotment) are realized by the logistics platform.

• the supplier prepares neutral palets: identification, marking and sorting operations (allotment) are realized by the logistics platform.

3) Advantages of cross-docking

The advantages of this technique are:

• no storage (reduction of the inventory ownership cost, reduction of the storing cost: See Spec Sheet Free-Logistics.com © Procurement and Supplying Costs ),

• no handling in relation with order picking (reduction of the storing cost: See specification sheet Free-Logistics.com © Procurement and Supplying Costs),

• better reactivity (no time in relation to put away and order picking operations), products stay generally no more than 24 hours on the logistics platform,

• better shipment consolidation : optimization of the upstream transportation means filling rate.

4) Key success factors for cross-docking implementation

In order to guarantee the success of the operation, it is fundamental to control totally the following functions before setting up this technique:

• Suppliers: the suppliers must be able to realize the orders preparation necessary for cross-docking process realization,

• Supply planning: the supplies have to allow perfectly synchronized upstream (from various suppliers ) and downstream ( towards customers) flows,

• Logistics Operations on the platform: handling operations must be also perfectly synchronized, the receiving / shipping processes must be adapted,

• Information System: the information system has to allow the allotment management (and especially the allotted order), the products traceability when in transit on the platform, the synchronous supply in relation with downstream flow needs, the platform transit operations organization. It is ideally totally integrated with suppliers, logistics platform and customers,

• Location of the cross-docking platform: it is fundamental to locate it judiciously. Any cross-dock must be geographically positioned so as to minimize the global transportation cost from suppliers – to customer. A barycentric approach is often used as prepositioning method (See Spec Sheet Free-Logistics.com © Barycenter technique to locate Warehouse ).

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