Cross Docking optimizes your routines when there is a growth in the volume of cargo or products
With the increase in online purchases, some trends that accelerate delivery speed and reduce operating costs ended up consolidating. This is the case with Cross Docking . In a free translation into Portuguese, the expression means “Crossing the docks”. This is a logistics area methodology that practically eliminates the need for storage. The product leaves the factory by truck, goes to a DC (distribution center) and from there, usually in smaller vehicles, is forwarded as quickly as possible to the customer. The load waits a maximum of 24 hours for final delivery in the picking area, an internal sorting yard inside the DC.
It seems new. But it is not. Cross docking emerged in the United States at the end of the 19th century, when the American Postal Service had to optimize its routine due to the growth in the volume of correspondence. Experts divide this system into two basic models: the pure and the future. In the pure one, the load leaves one truck directly to the other. In the future, the goods are stopped for a few hours at the distribution center to be processed. Other logistics theorists use a different nomenclature. They classify the cross docking operation into three types: continuous movement (when the cargo moves from one vehicle to another), hybrid or consolidated movement (where items are received and separated before final shipment) and handling for distribution (when goods are separated into FTL loads (Full Truck Load)). This last modality is used in B2B (Business to Business) negotiations, that is, between companies.
And, why was a century-old methodology recovered and valued just now, during the pandemic? Need. The moment we live in requires the Logistics sector to be even more agile, transparent and economical. Check out some advantages of cross docking :
As the cargo stays in the distribution center for a short time (if at all), this considerably reduces the delivery time of the goods to the customer, increasing satisfaction rates.
2) Decrease in logistics cost
The goods do not become stock, but inventory (since the item is only passing through the distribution center). In addition to reducing expenses with internal processes, there is also a reasonable reduction in transport costs, as orders are grouped according to their destination, thus optimizing deliveries.
3) Simplify or eliminate inventory
Due to the philosophy behind cross docking the need for storage is drastically reduced. By the way, the ideal is that there is no stock.
4) Reduction in the volume of thefts and storage errors
Large stopped loads always cause thefts and also errors that can, for example, compromise the expiry date of the goods. In this methodology these problems practically disappear.
5) Less use of working capital
The entrepreneur does not buy the product to sell later. Applying the just-in-time philosophy to cross docking, negotiation is only triggered when the customer purchases, moving the ordered cargo. This leaves more working capital for other commitments.
6) Facilitated supply chain management
Without inventory, the company’s supply chain manager can focus more on other aspects of the supply chain, reducing time and costs.
7) Increase in customer satisfaction rates
Operating at a lower cost, freight costs for goods decrease. Also, delivery is much faster. Speed and low price sound like music to the end consumer. A happy customer is a customer who buys again.
But implementing cross docking requires care. The methodology is as advantageous as it is laborious. To adopt this system, pay attention to the advice that follows, formulated by specialists in Logistics:
A) Have a good ERP
ERP stands for Enterprise Resource Planning, a business management tool that controls the flow of your business information between all the departments involved in the process. The company’s employees and suppliers need to be properly synchronized for an operation of this scale to succeed on a daily basis, knowing when the product will arrive, in what volume and to what destination.
B) Communicate clearly and objectively with your partners
Having a good relationship with business partners is essential. But a climate of harmony and efficiency is impossible without adequate communication tools and the use of language free of doubts. That’s why good management software is essential, with real-time control of the goods’ journey, checking all stages of the process, such as payment confirmation, placing the order and sending the product.
C) Train your team
Cross docking only works with a well-trained team. Each one needs to know what to do and this task must be carried out quickly and without errors. This is only possible with proper preparation. These employees also need to be proactive, solving small problems whenever they arise.
D) Negotiate with your suppliers
In the business partnership signed with your supplier, ask him to set aside adequate volumes of the items you sell every month, especially those with the highest turnover. This reduces customer waiting time.
E) Invest in a distribution center
There is no way to implement cross docking without a CD. And it must be sized for your needs.
F) Hire a carrier that has a CD
If you don’t have your own fleet, outsourcing is a natural fit. To implement such a methodology at a lower cost, it is interesting that the carrier has a distribution center, preferably well located. Incidentally, there are those who do all this service for other companies. These are the OCDs, Cross Docking Operators.
C) Focus on the customer
Machines break. Human beings make mistakes. It’s part of the process. Have a SAC, Customer Service, that is human and agile. Use the data provided by SAC to make the necessary adjustments.
H) Never stop learning
As interesting as cross docking is, better alternatives can always come up to reduce costs and speed up deliveries. Being attentive to the news can be the difference between staying or leaving the market.