Review of Supply Chain: Cross Docking and Best Practices

As we explained Cross Docking here.  In this article we look at  the benefits of cross docking and across which industry and circumstances can it be used. 1) The first benefit is that it allows manufacturers to prevent costs on warehouses as the incoming materials are directly picked up by outbound trucks.
2) This ensures transportation costs are minimized and kept under control.

 However, this concept of cross docking is only possible only if a firm is working in an environment of predictable volumes which lowers transit types. For example, if 3 trucks bring in incoming materials to be loaded onto outgoing 3 trucks, all the 6 trucks must be available at the single point at one destination. if this is not available cross docking cannot take place, otherwise, the firm needs a physical distribution point or a warehouse to take care of the inventories piled up In the absence of cross docking, the manufacturer does not have to tightly control the logistics flow.

 And the material can be directly shipped, however in this model the cost of transportation increases. In cross docking the " need for tightly controlling the logistics as it has to ensure that the entire ecosystem has to be tuned in to ensure both incoming and outgoing trucks are available in real time and a predestined point. Walmart is one company that has been using cross docking extensively which has ensured that its transportation costs are kept low. For this reason, Walmart has been using its own vehicles so that it can have more control over the vehicles.