Cross-docking, while a fairly simple process, helps to increase operational efficiency in highly complex supply chains. Each business’ supply chain varies in complexity due to a multitude of factors. These factors determine how and when cross-docking should be used. There are four main scenarios where cross-docking is used most frequently.
The most frequently encountered use of cross-docking is when the demand for any given inventory item is stable and shows strong consistency. These items can be placed on a reoccurring fulfillment schedule using cross-docking. This eliminates the need for surplus inventory to be stored in case of out of stock situations.
Cross-docking is also often used when handling time sensitive and perishable inventory. Due to the reduced shelf life, inventory needs to reach retailers with a reasonable remaining shelf life. By forgoing storage and utilizing cross-docking delivery time is reduced. This provides the goods with a longer sales window.
In the case of discount retailers such as TJ Maxx, product selection varies by day. Because customers cannot expect a specific inventory item to be in stock, cross-docking can be utilized to quickly deliver bulk shipments of varying inventory on a reoccurring schedule. In this case, out of stock scenarios are not a concern and storing surplus inventory is not necessary.
Lastly, cross-docking is used when fulfilling orders for which customers are willing to wait. With items such as appliances and furniture customers typically expect a short delivery period. Rather than storing these large items in-store or at a distribution center, retailers can efficiently fulfill orders from a single facility using cross-docking to help reduce the delivery period.
Stay tuned to this series to learn more about how cross-docking can benefit your business. For additional information on inquiries please contact Datex logistics experts today.
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