Cross-Docking Distribution Center

Cross-docking favors the timely distribution of freight and a better synchronization with the demand where the distribution center essentially acts as a high throughput sorting facility. It is particularly linked with the retail sector (often within large retailers), but can also be apply to manufacturing and distribution. Cross-docking is mainly dependent on trucking. Its particular advantages reside at the minimization of warehousing and economies of scale in outbound flows (from the distribution center to the customers). With cross-docking the costly inventory function of a distribution center becomes minimal, while still maintaining the value-added functions of consolidation and shipping. Inbound flows (from suppliers) are thus directly transferred to outbound flows (to customers) with little, if any, warehousing. Shipments typically spend less than 24 hours in the distribution center, sometimes less than an hour. In a conventional distribution system, goods are stored in a distribution center (or kept in inventory at the supplier) and wait until ordered by a customer. Under such a setting it is difficult to have shipments that are not less than truckload (LTL). With cross-docking, goods are already assigned to a customer. The distribution center receives goods from suppliers, sort them directly to be shipped to a consolidated batch (often including other orders from other suppliers) to the customers. Since there is for each supplier less shipments, most of them are full truckload (FTL).

Cross-docking can be applied to a number of circumstances. For manufacturing, cross-docking can be used to consolidate inbound supplies, which can be prepared to support just-in-time assembly. For distribution, cross-docking can be used to consolidate inbound products from different suppliers which can be delivered when the last inbound shipment is received. For transportation, cross-docking involves the consolidation of shipments from several suppliers (often in LTL batches) in order to achieve economies of scale. For retail, cross-docking concerns receiving products from multiple suppliers and sorting them to outbound shipments to different stores. The world's biggest retailer, Wal-Mart, delivers about 85% of its merchandises using a cross-docking system.

Home | Contents | Media | Glossary | Links | About | Contact | Purchase

Copyright © 1998-2012, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University, New York, USA.
This material (including graphics) cannot be copied or redistributed, in whole or in part, in ANY FORM (printed or electronic) and on ANY MEDIA. For specific uses permission MUST be requested and the material must be cited.