This method of transshipping products reduces storage and improves service at points of sale. Its performance depends on the level of collaboration between traders and suppliers. You can get in touch with Best Transloading Services In Seattle.
Despite its name, cross-docking stems from a simple idea: it is quite simply a quay-to-quay transhipment without storage. In the majority of cases, products from suppliers are delivered to a distribution center or logistics platform, where they are not stored but immediately dispatched to the points of sale.There are two modes of organization, depending on the type of preparation adopted and collaborations with suppliers: non-allotted and allotted.
In the case of non-allotment, the supplier prepares its orders product by product, based on the needs of all the points of sale served by the platform. The latter, upon receipt, takes care of the breakdown of the overall order on its docks, with possible preparation of orders and/or grouping with other stored references. The products are distributed by point of sale, on the basis of the order.
Ideal for promotions
In both cases, cross-docking delivers the same advantages in terms of satisfaction of the point of sale and its customers. By consolidating and accelerating flows, it reduces delays and disruptions through better product availability. Similarly, the optimization of the associated costs concerns several items: elimination of intermediate storage, possible improvement of transport costs, better management of receptions at points of sale by reducing the number of deliveries.
In addition, in trading, it can be integrated into the purchasing policy and circumvent the free-to-supply rules and related minimum order thresholds. And it adapts perfectly to promotional campaigns, by envisaging in a massive way the flows of partner suppliers, then broken down by points of sale.
While the main benefits in terms of costs are obtained through inventory management, gains in transport depend on the synchronization of upstream and downstream distribution flows and delivery frequencies.
To allot or not to allot, that is the question
The possibility of supplementing supply flows with products in stock plays in favor of its optimization. However, on a large scale, when reducing overall inventory or targeted SKUs is one of the goals, the reduction in inventory is usually offset by increased delivery frequencies. This situation can generate additional costs on the transport item. “The economic interest of cross-docking depends on the balance between the elements of optimization and additional cost for each situation. It is to be determined over the entire chain, from the supplier to the point of sale, including the desired customer service quality rate.
Like the cost/benefit ratio, the implementation of organisations, allotted or not, generates specific advantages and assumes certain prerequisites. Pre-allotment requires closer collaboration with suppliers, as it requires identifying the destination sales outlets as soon as the orders are prepared. This involves exchanging data between information systems, up to the standardization of labeling coding, which can be read over the entire chain. If this condition makes the implementation of allotted cross-docking more complex, the potential gains in productivity on operations in the trader’s platform, as in terms of lead times, order-delivery are greater.
The pre-allotment adapts to specific products – “dangerous”, counter-brands, even ranges with a high number of references but with low quantities delivered per reference. Non-allotment is appropriate for a larger number of situations. It facilitates the massification of flows by freeing itself from logistics units associated with the preparation of orders that are not always optimized for transport – for example, incomplete pallets.
