Crossdocking

Some gyan after a long time.....hardcore knowledge. While going through the first chapter of the supply chain management book came across the term crossdocking....though heard a lot of times but had not got a clear idea of what exactly it is. So spent an hour researching on the same. So what exactly is cross docking..... huum before that
Traditional method of goods management :
goods from vendors----warehouse----retail outlets/customer
Here generally warehouse has 4 activities--receiving, storage, order picking and shipping.

CrossDocking helps in removing the storage and order picking activity from the above activities of warehouse. Crossdocks are essentially transshipment facilities to which shipments arrive in carriers(usually trucks) with goods that are loaded onto outbound carriers mostly within 24 hours.

In the traditional model warehouse maintains stock until a customer orders, then the product is picked , packed and shipped.When replacements arrive at the warehouse they are stored until the customer is identified. In crossdocking, the customer is known before the product gets to the warehouse and there is no need to move it to storage. Inventory holding costs also get minimized, space required is also less (warehouse Vs crossdock).

RETAILERS

VENDORS

Wallmart has executed it successfully and almost 85% of its products are crossdocked.One of its major competitive advantages against its competitors.

But implementing crossdocking has its own challenges. First coordination among all members, vendors and retailers/customers. Also establishment of system information system requirements is a major barrier in implementing crossdocking successfully. Hence still its not that famous but the trends are positive as the global competition increases and efforts to reduce down costs on all fronts increase.

Crossdocks generally have rectangular shape with some in L, H or T shapes.

Links Crossdocking Keeps A Knocking , Crossdocking