Advantages And Disadvantages of Cross Docking :
| Cross-docking is one of the many new techniques that have been employed to increase the efficiency of logistics operations. It can be broadly defined as unloading the materials from an incoming ship, trailer or a truck and loading it back on to an outgoing trailer or a rail car without involving any storage in between. |
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In a conventional process, all the materials that arrive from the vendors are received at the warehouse. These materials are then unloaded and properly stored in devices such as pallet racks or shelves. Whenever any customer requests for the material, it is then removed from the shelves and is then dispatched to the desired destination. A separate inventory is maintained during this process in order to track the supply of the material. The process is entirely different in cross-docking. Here, the vendor would have a prior request from the customer regarding the material. As soon as the material arrives at the warehouse, it is then immediately loaded on to an outbound trailer going to the specific destination.
Process of cross-docking virtually doesn’t involve requirement of any storage facility for the inbound material. However, in certain conditions storage becomes unavoidable. Some of the situations include change in the conveyance or transport of the material or combining materials bound for same destination but coming from different origins or for sorting materials.
Cross-docking can be classified based on when the customer is assigned to the product. In the case of pre-distribution, the vendor sends the product to the cross-dock along with the details of the customer to whom the product must be dispatched. Pre-distribution is a coordinated effort that requires large amount of information transfer and system integration. The vendor must be clear about the specifications of the product requested by the customer. In the case of post-distribution, the material is not assigned to any customer when it comes from the vendor. However, at the cross-dock site, it is later distributed to various outlets of the vendor.
There are various factors that influence the usage of cross-docks. Some of these include geographical details of the customer and the vendor, freight charges on the material being shipped, details and complexity of the loads, handling charges, logistics software, tracking the inventory and the cost of inventory in transit.
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