Best Practice Warehousing; Cross-docking

September 13, 2016

What does it really mean when a company says they’re looking for a logistics professional that can implement best practice warehousing?

When looking at distribution and warehousing the most common areas we can gain valuable improvements are...

Order fulfilment and shipping
Receiving goods
Warehouse management systems
Space and layout optimisation
Safety and Sustainability
People Management
Lean warehouse practices
Developing appropriate metrics, e.g/ customer KPIs, safety, people (motivation, absenteeism) etc.
Cross-docking

I will explore cross-docking – a very important area to focus on for any warehouse and distribution professional looking to drive a point of difference.

Cross-docking

Often I hear varying definitions and ideas thrown around of what it means to run a high standard cross-dock process. The process is often misunderstood and poorly executed on all levels of operations, so I’ll take you through what it means to run true best practice cross-docking and the relevant considerations.

Best practice cross-docking is the process of receiving products and then dispatching that product, same day without putting it into storage... Sounds simple right?

Since handling, picking and putting away takes up a large piece of the operational cost pie, the attraction by companies to implement a cross-docking process to reduce costs is obvious. With less product being put away, warehouse space is freed up and can be utilised for other activities. Even a permanent reduction in warehousing space, could be considered once a robust cross-docking process has been proven. The number one challenge I hear from warehouse and distribution center (DC) managers revolves around customer focus and growing expectations. A good cross-dock operation is proven to improve customer responsiveness and speed of service.

So why isn’t everyone taking advantage of cross docking?

There are many important considerations when assessing the viability of the process including:

Type of products
Product volumes
Complex planning
Systems requirements

There is also a financial risk involved if the process isn’t executed as planned causing hold-ups with trailers, transport and warehouse labour.

I have recently transitioned from a role as a Distribution Manager, which I held at a large distribution centre for a market leading national beverage company, to a consultant recruiting within the supply chain space. Something that has surprised me is there are a very small percentage of products, in reality, that are actually being cross-docked.

I have found over the last six months that the majority of talent that I meet with warehouse and DC manager titles only cross-dock in their organisation in some capacity. It has become increasingly apparent the process of cross-docking is misinterpreted and under-utilised in Australia resulting in huge cost implications.

Best practice cross-docking

So with all that in mind the top considerations to run a best practice cross-dock operation are:

Correct type of product – ideally has a unified form of handling.
Accurate and predictable demand of product - efficient planning team.
Suppliers that are reliable and deliver in full on time.
Reliable and consistent transport providers.
Full visibility of inbound and outbound shipments.
Appropriate systems – automated shipping notices, cross dock management, warehouse, yard and tracking systems.
Facility design that incorporates an efficient separate inbound and outbound area.

As you can see there is a certain complexity to best practice cross-docking that requires a company to invest in process, systems, facilities and people, but if the company is willing to invest, the journey to best practice cross-docking can be a highly beneficial way to differentiate your operation from your competitors.