A cross docking warehouse configuration is most common in large warehouses/distribution centers.
In a standard warehouse configuration, inventory is stored in various storage section/s.
A cross-docking warehouse is configured with incoming trucking docks and outgoing trucking docks (normally on opposite sides of a warehouse). The aim is to move product directly from receivables to outgoing shipping, without long-term storage. In this way, the distribution center functions more as a sorting center, than an actual storage or warehouse facility.
The term describes the flow of product from incoming transport to outbound transport. The product effectively crosses the dock from inbound to outbound.
Generally, a cross-docking warehouse has docks on two sides but can have facilities on three or even all four sides.
Methods of cross-docking
- Continuous cross-docking: here, products and materials are continuously moved through a central site – moving from inbound to outbound shipments. Wait times can arise when trucks arrive at the cross-docking warehouse at different times
- Consolidation arrangements: this method involves minimal storage at the site. Here several smaller products or freight loads are combined to form full truckload outgoing shipments.
- Break-bulk or deconsolidation: here a large load is broken into smaller ones – serviced by smaller vehicles. This is most common with direct-to-consumer shipments.
Advantages of a cross-docking warehouse
- Decreased shipping times. As soon as an item is ordered and reaches the warehouse, it can move swiftly from one truck to another, and be shipped onward. The product thus reaches the end consumer faster.
- Reduced costs. Inventory storage has a rental cost implication. In many instances, storage is necessary (for example timeliness, large inventory manufacturing runs, anticipated demand spikes). Where storage is not required, a smaller amount of GLA / rentable area can deliver the same distribution output.
- Improved inventory management efficiencies. Cross-docking reduces the risk of surplus inventory. With the decrease in shipping time, excess inventory to meet faster fulfilment expectations does not have to be kept. The stock available can be picked and shipped directly to customers. As a result of the rapid turnaround from incoming to outgoing, damage assessment can take place quickly, and the product quality feedback loop is quick.
- Decreased product risk. The risk of operator error or damage is proportional to processing steps and time under the roof. Cross-docking cuts out at least two steps: moving product into storage and out of storage. The product passes through fewer hands and is stored for shorter periods, resulting in less risk.
- Reduction in service providers. With cross-docking, warehousing and expedited shipping can be handled by the same team
