What is Cross-Docking? Do you need it?
Cross docking is a logistics process where products are distributed directly from the supplier or manufacturer directly to the retail chain or customer with minimal handling and (in most cases no) storage cost.
Simply put, inbound products will arrive on a larger delivery vehicle to a centrally located facility, like Mango Logistics’ Central London warehouse, and will then be sorted, screened and checked on to the final mile delivery vehicle.
There are a number of reasons why any business should explore their options when it comes to cross-docking, but here are a some of the most common:
- Products might need to be stripped of original documentation and relabelled for delivery to the final customer,
- Breaking down larger product loads into smaller loads to make the delivery process easier for the receiving customer,
- Combine numerous smaller product loads in to one individual delivery, saving on final mile delivery costs in London,
- You’re sending merchandise and marketing material to an expo or event but have been told to deliver on a specific day and time (something your regular courier company won’t do, but we will)
- Bespoke repackaging, wrapping or labelling is required before final delivery,
- There are vehicle type restrictions at the final place of delivery and a smaller delivery vehicle (such as an e-cargo bike) is required.
Now you may be asking, is cross docking right for my business and distribution strategy? And the answer is not always going to be yes. But in order to determine whether this is the right delivery path to follow, you need to ask yourself the following two questions.
First question to ask is, would it not be safer, quicker and easier to hold a stock of my inventory in a warehouse and deliver from it when required? The key consideration here is cost. Holding an inventory will mean paying for warehouse space, depending on how long it needs to be stored. Not to mention, the cost of warehousing is already at a premium. In most cases, it will also mean putting capital upfront for stock to potentially sit in a warehouse for long periods of time. Is that capital put to better use at the expense of 1-2 days’ worth of delivery time? Cross-docking could be your answer.
Secondly, why would I not just ship directly from the manufacturer or supplier to my customer? This is probably the most obvious alternative, but the key is to reconsider the four bullet points mentioned earlier in this post. If your customer has specific requirements such as timing, vehicle type, preparation, or complex consolidation requirements, is this something you can entrust with your suppliers to handle? If you feel like you need more control, then cross-docking will be your answer!
Like other data-driven supply chain practices, it requires control, visibility and delivery of the shipment from supplier to end customer. The key to all this is engaging a logistics service provider, like Mango Logistics, that has made the investment in a robust, data driven WMS that gives you full visibility from end to end.
So what do you think, could cross-docking be your superstar distribution strategy?