Article: Understanding Cross-Docking

By Vivek Sehgal, Supply Chain Musings

Supply chain management is all about flows. Material flowing through warehouses is no exception. Conventionally the warehouses were set up as inventory buffer points along the supply paths so that demand fluctuations across the network could be smoothed. That provided stability to the planning and operations of the supply chain.

But, better technology, integrated systems, and near real-time information exchange have all made it possible now to operate the warehouses more efficiently. Where the product and demand attributes allow, it is possible to leverage cross-docking opportunities and reduce the inventory buffers at the warehouses.

Cross-docking basically involves receiving the merchandise at the inbound docks and then shipping it out shortly after without the need to stock it at the warehouse. If planned and executed properly it saves the intermediate disposition, storage and order fulfillment tasks in the warehouse. Well planned cross-docking operations save resources across the board, at the warehouse like labor, space, and equipment; and also technology resources by simplifying the process.