Last class was about building warehouse and calculating the space like number and size of aisle, approximate number and size of boxes and pallets, height. But what if we run of space in warehouse? It is a sign of good business or we store wrong product at wrong place, as a result we are not utilizing maximum space of our warehouse, which is storage mismanagement. There are high chances of storage mismanagement when a company has to replenish very often because of high inventory volume.
There are number of methods and ways that can be used to maintain space in warehouse. One of them is Cross –docking.
What is cross docking?
When a products from supplier or manufacturing plant are directly distributed to customer without handling or storing cost. It is helpful when customer get their product when they exactly want.
When is Cross- docking used?
- The products which need to be transported quickly like perishable goods or sensitive items.
- There are products which are packed for specific kind of customer.
- When there are bulky goods. For example, furniture item or kitchen appliances; this would not be good idea to store in warehouse so cross-docking is easiest and fastest way to reach customer.
Companies that implemented Cross-Docking
- There is a big role of cross-docking in Wal-Mart’s success. The product moves quickly, there is storage space, deliveries are performed rapidly. It helps Wal-Mart to increase inventories and as there is space now, it can be utilized as a shelf for other products.
- Tesco also implemented Cross-docking system. This help Tesco to directly load same store’s products into the trailer instead of distribution center approach.
- Reduction in labor cost
- Customer satisfaction
- Space in warehouse for another product
Here is a video to understand what exactly cross-docking system is all about.