Cross-docking is an incredible service to help businesses reduce the amount of waste generated during warehousing. Cross-docking does this by reducing the number of hours the goods spend in the warehouse. Since the product is directly sent to wholesalers and retailers, the businesses are exempted from the expenditure on inventory management.
There are several best cross-docking companies out there that allow you, as a business owner, to increase turnover by reducing warehousing. In this article, we will discuss what cross-docking is, how it is different from warehousing, and what businesses it can benefit?
What Is Cross-Docking?
Cross-docking companies offer the businesses to send their goods to warehouses where they are directly sorted and processed. As soon as the sorting is done for various retail locations, it is loaded on the transportation fleet.
Unlike traditional warehousing, the docking services do not require producers to pay for warehouses once they are sorted and processed. They can be directly shipped to retail outlets for sales. If your business opts for cross-docking, you won’t have to spend on storage and handling products.
Nowadays, various MNCs such as McDonald’s, Unilever, and Nestle are obtaining services of the best cross-docking companies out there to be able to leverage a global supply chain. Since the goods are not stored until demand arises, you can produce for the demand that already exists and save a fortune on inventory management.
It allows companies to use a more efficient operations plan and revolutionize their profits for the better.
How do Cross-Docking and Warehousing Differ?
Cross-docking has taken over warehousing since the strategists view warehousing as a time-consuming and expensive investment. They include huge labor costs, efforts, and involve inventory management expenses. Experts also believe that soon warehouses will become a thing of the past with the introduction of time-saving and relatively cheaper cross-docking services.
Traditionally, warehouses were used to store goods in order to meet the fluctuating market demands. When the demand was low, extra products were stored to meet the rising demands in the future. Hence, it took a long time for the order to reach the customer if it wasn’t already available in the warehouse. To tackle this issue, inventory management experts were employed.
But soon companies realized that if they increase their production line‘s efficiency, they can meet the increased demand as is without storing much. Especially the producers of perishable goods could escape huge losses due to wastage by avoiding warehousing. That is when cross-docking became a hit.
Better technology and infrastructure in transportation and communication facilitated better anticipation of demands. Now, the factories could manufacture to meet the demands and bid farewell to loss-making buffer stocking.
5 Industries That Can Benefit from Cross-docking
Cross-docking enables businesses to offer just-in-time deliveries to their customers without bearing the cost of inventory management and warehousing. Some businesses which are in absolute need of this solution are:
- Food and beverages
The ingredients for various preparations in restaurants other than fresh produce require cross-docking because the demands in this sector are highly fluctuating. To meet this fluctuating taste of consumers, every business cannot deploy huge storage spaces. What most resorts, restaurants, and even boutique hotels have is a deep-freeze pantry.
They can order what is required for the next dinner service in advance to receive their order in time for their guests.
The “just-in-time” delivery is one concept the automobile industry has adopted from Japan’s highly efficient companies. They have used cross-docking services impressively by engaging various suppliers in providing the parts and accessories only when there are orders to complete. In this way, companies can skip the costs of kitting, storage, and handling.
A well-established supply chain will not benefit any other business than the retailers since they require the stock to make sales. With cross-docking in place, they can keep merchandise in apt quantities on the shelves and place orders for immediate shipment when they fall short to meet demands.
Chemicals are by far the toughest materials to ship and store. You never know how they can react to various weather conditions. Hence, it is better to have them shipped when required through cross-docking services. They offer unpacking and storage services, too, so that you can offer better customer satisfaction.
As compared to a decade ago, more and more people are ordering consumer goods online, making it important to quickly provide their shipment. For this, warehousing is not as effective as cross-docking. Even the giants like Amazon have the products shipped to docks for packaging and sorting before they are off to the final destination. The process doesn’t take more than a couple of days for consumer products to reach buyers.
In the end, cross-docking has certainly brought about a revolution in several industries by reducing the cost of storage and inventory management. Besides, value-added services like sorting and packaging are being maintained.