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Transcript of cross-docking
Cross docking is a logistics procedure where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time. In simple terms, inbound products arrive through transportation such as trucks/trailers, and are allocated to a receiving dock on one side of the ‘cross dock’ terminal. When is cross-docking used?
The process of cross docking will not suit every warehouses needs, it is therefore important to make an informed decision as to whether cross-docking will increase the productivity, costs and customer satisfaction for your specific business. Advantages of cross-docking?
-Reduces material handling.
-Reduces need to store products in warehouse.
-No need for large warehouse areas
-Reduced labour costs (no packaging and storing).
-Reduced time to reach customer.
-Transportation has fuller loads for each trip therefore a saving in transportation costs while also being more environmentally friendly.
-Products are moved more quickly through a cross dock.
-Easier to screen product quality.
-Elimination of processes such as ‘pick-location’ and ‘order picking’
-Cross docking terminals are less expensive to construct than your average warehouse.
-High turnover of products with everything moving quickly through the cross docking terminal. Products usually spend less than 24 hours here.
-Products destined for a similar end point can be transported as a full load, reducing overall distribution cost. Disadvantages of cross-docking
-Much management attention, time and planning is necessary to make it work effectively.
-Setting up the cross docking terminal structures would take quite a bit of time and capital to start with.
-Some suppliers would not be able to deliver customer ready products to the cross docking terminal.
-A sufficient number of transport carriers are necessary for the cross docking terminal to run smoothly, therefore is mainly dependent on trucking.
-A high volume of product is necessary to be cost effective.
-The organisation has to have a confortable reliance that their suppliers will deliver the right product in its right amount to the cross docking terminal on time which doesn’t leave too much room for error. Speed and productivity of a supply chain has become an important factor of growth for organisations. Cross-docking is just one strategy that can be implemented to help achieve a competitive advantage. Implemented appropriately and in the right conditions, cross-docking can provide significant improvements in efficiency and handling times. The world biggest retailer, Wal-Mart, delivers about 85% of its merchandises using a cross-docking system.
"As measured in dollars, about 70% of our inventory goes through a cross-dock " Fed-Ex A presentation by:
Thomas, Cayla,Arielle and Hannah