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Effective inventory management is always a delicate dance between the cost associated with carrying too much inventory and the risk of not carrying enough to fulfill a customer order at the right moment. With ongoing pressure to ship orders within compressed timeframes, there’s no room for error, and competitors are always on your heels. It’s critical to unearth new ways to generate savings and efficiency at every turn. Cross-docking often leads the opportunity list with its ability to minimize material handling costs and get inbound products prepped for shipment at lightning speed.
Although the practice of cross-docking has been around for quite a while, many organizations shy away from implementing it because they think it’s more work than it actually is. In doing this, they forfeit cost and efficiency benefits that can help them better meet customer demands, particularly for specialty items.
What is Cross-Docking?: A Definition
Just to level-set, let’s establish what cross-docking means. In the purest sense, it occurs when inbound goods are received, sorted, and put directly onto another truck — a true flow-through approach. There’s minimal material handling and ideally no storage. However, in most warehouses, received goods ready for cross-docking have to go into temporary storage locations close to the dock unless the outbound carrier is there at precisely the right time.
Benefits of Cross-Docking
Your ultimate goal is to keep products moving, reducing the number of touches or “fingerprints” throughout the process and avoiding long-term storage. Key benefits include:
Finding Prime Candidates for Cross-Docking
If you evaluate the types of inventory and orders your warehouse management system processes every day, there will be items that don’t move quickly or have a high level of seasonality. The fact is, these specialty items are costing you more money than they should. To get started with cross-docking, review your inventory and order reports to spot products that are ordered sporadically but must be kept on hand. Seasonal items maintained outside of their fast-moving months are also ideal for cross-docking as you don’t want to devote storage space to them — think lawn chairs, parts for snow blowers, etc. In healthcare, IDNs frequently leverage cross-docking because each department typically wants different items, and some of them fall outside their normal order profiles. These may include a specific type of instrument or med-surg tool needed for a procedure.
What Should Cross-Docking Functionality Look Like or Do for You?