Distribution has entered the on demand era. Customers expect
products when they are ordered—on demand, with an unprecedented
level of compliance. To be competitive, companies must focus
on moving product in and out of the warehouse in the most cost-
effective, effi cient and timely manner possible, while providing the
services customers demand. They need to position distribution as a
frontline business strategy.
For many, cross docking can be a valuable part of this strategy.
Cross docking—the process of moving material from the receiving
dock to the shipping dock, bypassing storage—is a simple concept
that is perhaps as long standing as warehousing itself.
Cross docking reduces inventory carrying costs, transportation costs
and costs associated with order fulfi llment and material handling.
Holding inventory, moving it, counting it, picking it, and sometimes
losing it costs money. While not a solution for everyone, such as those
with strict FIFO requirements, cross docking can lead to signifi cant
benefi ts. It must fi t the business, and the proper systems and
processes must be in place to make it cost effective.
WHO DOES THE WORK?
Cross docking involves an inbound shipment to and an outbound
shipment from the facility performing the cross-dock activity. A
decisive issue is who prepares the material for the outbound
Companies such as retail chains will often negotiate with their
vendors to have the vendor prepare the product specifi cally for cross
docking before shipping it to the retailer’s distribution center (DC).
The vendor may have to label cases for automatic sorting upon
arrival at the retailer’s DC, or the vendor may be required to sort and
palletize cartons for each of the retailer’s stores for quick and easy
A fi rm that ships full pallets or fl oor-loaded trailers with just a few
SKUs is dealing with a labeling and, soon, an RFID application task.
If it must prepare orders for possibly hundreds of st