When last-mile delivery occurs from one central location, known as the cross-dock warehouse, it can help optimize your supply chain. Provides a central site for handling products And b y reducing labor, you save time while keeping inventory shipments intact for a more efficient inventory storage system. C ross-docking makes for a more efficient inventory management process to support faster replenishment such as just-in-time inventory.Īlso, instead of tracking inventory flow throughout your entire ecommerce supply chain, inventory tracking is done in bulk. Not only does a business have to purchase product, they are also required to pay for first-mile and last-mile shipping and carrying costs as well.īut with cross-docking, a business doesn’t need an extensive ecommerce warehouse to cost-effectively get product to their customers. Reduced costs and time savingsĬost of goods sold (COGS) accounts for a significant portion of inventory expenses. What’s more, receiving inventory is less complex since receiving only requires accounting for inventory being received and then shipped, rather than scanning inventory into a warehouse management system (WMS) for the purpose of optimizing the movement of goods. Shipping efficiency also increases as the bigger batches are broken down into smaller shipments and loaded to freight going in the same direction. Since labor to store products can be reduced or eliminated entirely, goods reach the final destination much sooner. Here are a few of the benefits of cross-docking for ecommerce. Benefits of cross-dockingĬross-docking enables a leaner supply chain and is ideal for businesses looking to accelerate their order fulfillment process, reduce costs, and speed up the time it takes for products to reach hubs and/or customers.
With cross-docking you can fast-track the retail fulfillment process for bulk shipments and eliminate the need for long-term (or even short-term) warehousing. This saves time and labor at the receiving dock and helps get the inventory on to the next leg of its trip. In most cases, finished goods are unloaded from the incoming transport (from the supplier) into the inbound dock, sorted and consolidated at the cross-docking terminal, and promptly loaded onto an outgoing vehicle (to the customer or retailer) at the outbound dock. This enables faster replenishment, reduced middle- and last-mile shipping costs by positioning inventory closer to the end customer (e.g., using a distributed inventory model), and better servicing of your end customers. What is cross-docking?Ĭross-docking is a lean supply chain model that involves the immediate or faster transfer of finished goods directly from suppliers or manufacturers to customers or retailers with little to no handling or storage (e.g., stopping a truck at a distribution center to put it on another truck without storing the inventory inside the warehouse). In this article, we will discuss the types of cross-docking processes available to retail businesses, along with benefits, and how a 3PL can help you implement a cross-docking solution. The automotive industry has focused for decades on optimizing a just-in-time delivery and cross-docking supply chain model for decades.Īnd now, thanks to the growth of inventory automation and other supply chain technology, forms of cross-docking are becoming a more accessible logistics operation for ecommerce. Cross-docking is a logistics system that makes distribution more efficient and fast-tracks the fulfillment and inventory replenishment cycle.
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Labor, in particular, is a logistics cost that tends to make up a big percentage of the overall costs.įortunately, there is a way to reduce labor by reducing the need to stow away products, or eliminate the need for full inventory storage at an interim location all together. All rights reserved.Retail supply chains are designed to enable efficiency, speed, and cost-savings all while ensuring that products get to the end user at the right time.
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