Cross Docking Case Study
2.1.1.1 Definition and advantages
Among the four most common functions of warehouse operations which include importing, storing, collecting and exporting, two of the costliest functions are storing due to inventory cost, and collecting due to labor costs. Cross docking is a logistics technique that eliminates the storing and collecting functions of a warehouse, but still allows the importing and exporting functions. The main idea of this technique is to move the goods directly from the incoming trailer to the outgoing trailer - bypassing the intermediate storage process. Shipments usually take about a day at the cross-dock at most and sometimes less than one hour. Cross docks are the feeder facilities where classified trucks primarily get in
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In these cases, cross docking is considered as a way to reduce inventory holding cost. Second, to some other retailers or carriers specialized in small freights, cross docking is a way to reduce transportation costs. For example, retailers can receive shipments directly from carriers that use LTL or bulk shipments. However, this has led to a significant increase in the cost of input transportation of goods due to the high volume of vehicles that is associated with the increase of costs such as gasoline, vehicle repairing and upgrading costs, labor cost, etc. Cross docking is a way to group these shipments together in order to reach a certain number of means for reducing input costs and simplify receiving goods at retail …show more content…
For example, a manufacturer may rent a warehouse near their factory, and use it to prepare for assembling or gathering required components from every part. Because the needs of each department are known in advance, based on the output of an MRP (production resource planning system), there is no need to maintain a certain amount of inventory.
• Distributor cross docking: Collects input products from different suppliers into a mixed product pallet. This pallet will be delivered to the customer as soon as the last component is received. For example, computer parts of distributors can source parts from different suppliers and combine them into a single shipment for the customer.
• Transportation cross docking: This activity combines shipments from a number of different carriers in LTL form or in small packages for benefit economies of scale.
• Retail cross docking: This process involves receiving products from multiple vendors and categorizing them into output trucks for a number of retail
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