Cross-docking fulfillment automation is a fulfillment strategy that involves bringing in finished goods directly from the manufacturer, and transferring them straight to the final customer without internal storage.
One of the fulfillment strategies that has become increasingly popular as warehouse storage and real estate becomes more scarce and more competitive is cross-docking fulfillment automation. Cross-docking is a fulfillment model that involves bringing finished goods directly from the manufacturer and transferring them straight to the final customer without internal storage.
When implemented effectively, cross-docking eliminates the need for long-term storage of goods. It can be described as the ultimate just-in-time fulfillment strategy, as there is no time (or space) wasted between inbound and outbound shipments. By using cross-docking, companies can increase efficiency by reducing or eliminating storage space and improving their ability to meet customer demand by allowing them to fulfill orders faster.
Why Choose Cross-Docking?
A lot of time and energy can be wasted in the “storage” area. Cross-docking removes inventory racking, picking, and packing from the process, and skips straight to the end-of-line shipping process of fulfillment to the end customer. Over the past few years, industrial warehousing space vacancy was at an all-time low, eventually hitting 2.9% in 2022. This means warehouse owners and operators need to look for ways to optimize the storage they do have, because there’s not much more space to go around.
Not only that but storing inventory of product for any length of time presents opportunities for error. Mistakes can be made during storage – damage, loss of goods, expiration. Everything has a shelf life of relevancy, and retailers try to avoid overstocking of goods, and having to offload them amid poor demand. None of these challenges are present with cross docking.
When Is Cross-Docking Used?
Most often, cross-docking is applied to operations that are fulfilling goods that already have a high turnover, so there is less concern that the goods will require inventory stocking. There are several types of cross-docking, ranging from the most basic to the most complex. They may be referred to as “straight-through” or “two-step” cross-dock, depending on how much processing takes place at the receiving station.
In a straight-through dock, your product is received at the receiving station and immediately transferred to warehousing or another location for storage, without any inspection or other processing taking place there. This can be done with manual labor or automated conveyors like those utilized in car factories where cars are built on assembly lines in an endless stream (hence “straight through”).
In two-step cross docking, goods are processed between both steps (the receiving step and transfer). For example, this could mean that some goods need further inspection before they can continue in the process—perhaps because they’re bulk product that requires removal and re-kitting—or perhaps because they require additional inspection or have a component that must be added to the order. In such cases it may be necessary to have two separate cross-docking lanes set up.
Cross-Docking Is A Smart Way To Manage Your Inventory, But Only If It Is Executed Properly.
Cross docking is a smart way to manage your inventory, but only if it is executed properly. Make sure you have the right equipment and processes in place. Cross docking requires equipment that can handle small shipments more efficiently than other methods. Your cross-dock facility must be able to pull orders, receive them, sort them and load them onto trucks quickly without damaging goods or losing time waiting for trucks to arrive. You also need a good process for making sure each order gets loaded onto the correct truck so there won’t be any delays or mistakes at the warehouse level. There are multiple systems that must run seamlessly with each other, including:
- Multi-sided barcode scanning to read barcodes along varying sides of the items
- Conveyance and sortation to quickly singulate and align packages for processing
- In-motion scale rated for your specific package variety (optional dimensioner)
- Printer applicators to apply shipping carrier labels to outbound shipments
- Warehouse Control System (WCS) software integrated with your WMS, ERP and/or multi-carrier platform to accept order volume and assign carrier labels on the fly as the item UPC’s are read
Considerations For Cross-Docking Applications:
Some products are not suitable for cross-docking because they are supplied in bulk, long lead times, or long shelf life. If you’re considering cross-docking a product and want to get the most out of it, consider these factors:
- Bulk Product & Complexity: Are these products being fulfilled coming from a bulk shipment that must be manually removed and re-kitted? If so, this complexity adds processing time and creates a bottleneck for the cross-docking system. For these order profiles, longer processing time and/or traditional inventory storage of pre-assembled items may be a better strategy.
- Customer Expectation: How fast do customers expect their order to arrive? For some items – such as health and beauty or electronics – customers may expect very fast delivery turnarounds. A company that offers overnight delivery could still use cross-docking if its warehouse is close enough to major population centers where demand is highest so that items can be delivered quickly enough, while still being able to save money on storage costs by using less space per unit at the end of their journey through shipping channels.
StreamTech Engineering has designed, engineered and implemented a variety of fulfillment automation systems for cross-docking applications. If you are interested in discussing your project, get in touch with us and we’ll be glad to learn more about your needs and find ways to help.