Cross-Docking Distribution

Center (DC)
 Cross-Docking
Cross-docking favors the timely distribution
of freight and a better synchronization with
the demand.
It is particularly linked with the retail sector
(often within large retailers), but can also be
apply to manufacturing and distribution.
Cross-docking is mainly dependant on
trucking.
 Advantages of Cross-Docking
Minimization of warehousing and economies of
scale in outbound flows (from the DC to the
customers).
The costly inventory function of a DC becomes
minimal, while still maintaining the value-added
functions of consolidation and shipping.
Inbound flows (from suppliers) are thus directly
transferred to outbound flows (to customers) with
little, if any, warehousing.
Shipments typically spend less than 24 hours in
the distribution center, sometimes < 1 hour.
 Before Cross-Docking

LTL Less than Truckload

 After Cross-Docking

TL Truckload
 Cross-Docking DC
Suppliers

Receiving
Sorting
Shipping

Customers
 Pre- and post-distribution
In pre-distribution cross-docking, the customer is
assigned before the shipment leaves the vendor,
so it arrives to the cross-dock bagged and tagged
for transfer.
In post-distribution cross-docking, the cross-dock
itself allocates material to its stores.
For example, a cross-dock at a Wal-Mart might
receive 20 pallets of Tide detergent without labels
for individual stores. Workers at the cross-dock
allocate 3 pallets to Store 23, 5 pallets to Store 14,
and so on.
 Comments
Pre-distribution is definitely more difficult to
implement because the vendors of the
cross-dock must know which customers of
the cross-dock need what before they send
the shipment.
This involves quite a bit of information
transfer, system integration, and
coordination.
 The Cross-docking requirements
The systems for a successful cross-docking
on a large scale include:
• automated material handling,
• warehouse management systems (WMS),
• order processing systems,
• quality controls systems,
• strong relationships between supply chain
partners.
 Automated material handling systems

An automated cross-docking system typically

consists of a series of conveyors for receiving and
sorting cases.
Barcode scanners read an identification code on
each case to track the product through the cross-
dock system and, based on information from a
WMS or an order system, the automated system
sorts the cases to trucks or pallets for shipping.
Bartolini Roma Sorting.wmv
 Warehouse management system
Controlling the flow is critical in cross-docking.
A WMS accomplishes this by receiving product
information via WEB or EDI and keeping track
of product movement.
It supports the real-time requirements of cross-
docking, receiving order details from
customers and later informing them of the
shipment's carrier and arrival date and time.
The WMS also tracks warehouse performance,
including labor and dock utilization.
Importance of tracking performance
Cross-docking demands a reallocation of
resources, shifting the emphasis away from
storage and order picking to receiving and
shipping.
For example, peak workload may intensify
because it's more difficult to evenly distribute
workload in cross-docking.
Thus, the peak workload’s length and when
it occurs must be studied to utilize labor and
dock equipment most effectively.
 The software
Business systems may require special
functionality to efficiently allocate inbound
goods to existing orders, matching supply to
demand.
Some WMS permit opportunistic cross-
docking functionality to allocate received
product to current demand in real-time.
And there is little stress on software systems
when buyers predetermine distribution for
special purchases or seasonal items.
 Quality control (QC)
Stringent yet agile operations are
increasingly important as the volume of
cross-dock business increases, especially
when handling new suppliers.
Good QC is essential to avoid delays,
bottlenecks, or the costs associated with
shipping inferior product.
 Partner relationships
Failing to establish a good working
relationship with your supply chain partners
can lead to failure in a cross-dock endeavor.
The sharing of information, clear
communication, confidence in the quality
and conformance of goods, and product
availability are a few characteristics that
produce effective cross-docking.
 The plan
Although the concept of cross-docking is
simple, its implementation is complicated.
Careful preparation is a must.
Logistics managers who want to switch to
this rapid system have to first establish a
formal plan, including starting a cross-
docking pilot program and evaluating its
effectiveness.
 The implementation
Once the plan is set, logistics managers must
partner with other members of the supply
chain to implement the system.
Since cross-docking affects the entire supply
chain, everyone's cooperation must be
gained and adjustments made wherever
necessary.
 The cost structure adjustments
For example, if manufacturing has to pay
extra costs to enable cross-docking through
the supply chain, then the manufacturing
cost structure must be readjusted
appropriately.
This applies to every member of the supply
chain, such as trucking and packaging.
 Problema
Una catena di supermercati vuole passare
da un metodo tradizionale al cross - docking.
Una prima verifica riguarda:
• L’esistenza delle condizioni per
realizzare un Centro di Distribuzione in
regime di cross-docking;
• I problemi da risolvere per realizzarlo;
• Le voci di costo principali per una
valutazione economica dell’operazione.