Cross Docking Process
One of the warehousing best practices that retailers like Walmart, Amazon, and Target have adopted is known as cross-docking. During this process the inbound products are unloaded at a distribution center and then sorted by destination, and eventually reloaded onto outbound trucks. In real parlance, the goods are not at all warehoused but just moved across the dock (hence the name).
Cross-dock products from receiving warehouse to stores
One of the warehousing best practices that retailers like Walmart, Amazon, and Target have adopted is known as cross-docking. During this process the inbound products are unloaded at a distribution center and then sorted by destination, and eventually reloaded onto outbound trucks. In real parlance, the goods are not at all warehoused but just moved across the dock (hence the name).
Cross-dock is the process to distribute products from the receiving location of a purchase order to one or many stores. Cross docking takes place in a distribution docking terminal; usually consisting of trucks and dock doors on two (inbound and outbound) sides with minimal storage space. Cross docking can also be defined as the process of re- handling freight from inbound trucks and loading it into outbound vehicles. Essentially, cross-docking removes the “storage” link of the supply chain. Cross-docking is a practice in logistics of unloading materials from a manufacturer or mode of transportation directly to the customer or another mode of transportation, with little or no storage in between.
The receipt of products may be from multiple vendors and they are sorted in the receiving warehouse and dispatched in outbound trucks for a number of retail stores. Organization must specify the quantity being purchased of the selected product that should be distributed and orders are created from the receiving warehouse to the retail stores.
Factors influencing cross docking:
- Cross-docking requires continuous communication between suppliers, distribution centers, and final points of sale
- Useful when a single corporate customer has many multiple branches or using points
- Helps in reduction of freight costs, cost of inventory in transit and complexity of loads
Cross Docking Process:
Given below are the steps involved in designing a cross docking process:
- There are three parties involved in this process - Manufacturer of Originating Supplier, Supplier who has received the order from the customer.
- The originating supplier ships the goods.
- The supplier is notified of the shipping details.
- Carrier notifies middle supplier of the arrival date and time for each shipment.
- The supplier also receives the order details from the customer.
- The outbound carrier is notified of the pick-up time, load description, destination, and delivery date and time.
- The customer is notified of shipment detail, carrier, and arrival date and time.
- A dock location is selected for trucks involved in receiving and shipping.
- Labor and handling equipment are scheduled.
- Receipts are recorded and reconciled, and any receiving variances are noted.
- Labels are created, and cases and pallets are routed and tracked from receiving to dispatch.
Example:
This method was used by Wal-Mart in the 1980s. Wal-Mart was able to effectively leverage its logistical volume into a core strategic competency by usage of cross docking.
- Wal-Mart operates an extensive satellite network of distribution centers serviced by company-owned trucks
- They have two types of products, items for regular sales (staple stock) and large quantities of one time products
- Cross docking is used for second type of products
- It minimizes warehouse costs with direct freight by keeping these products in warehouse for as little time as possible.
Milk Run Process
A Milk Run is a delivery method used to transport mixed loads from various suppliers to one customer.
This method got its name from the dairy industry practice, where one tanker used to collect milk from several dairy farms for delivery to a milk processing company. The milk-run is generally an “in-warehouse” transportation system where your items are transported from a central or receiving area to different putaway areas within your facility. In the context of logistics, milk runs helps to increase the utilization of tools and in-turn reduce the logistics costs.
Examples:
- Some retail product quantities typically aren't full pallets of inventory. Milk-run strategy could be deployed for Putaway activity.
- One truck can visit multiple suppliers to pick up the loads for one customer.
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