Cross-Docking

Cross-docking can bring substantial sav-ings in transportation costs without in-creasing the inventories, while at the same maintaining the level of customer service (Apte and Viswanathan, 2000).

Information about Cross-Docking

Cross-docking is a powerful strategy for supply chain management, as it helps to achieve some of its key objectives: inventory reduction, fixed resource reduction and more flexible and responsive operating systems.

The objective of cross-docking is to combine inventory from different suppliers into one assortment for a specific customer. The strategy is used extensively by retailers for replenishment of fast-moving products and represents an application of the 'active storage' concept. Cross-docking is most appropriate for high-volume, fast-moving products with easily predictable quantities (Bowersox et al., 2007). It is also an appropriate response to another trend in logistics and distribution - the increased product proliferation. Increased product proliferation leads to the decreasing demand for the individual product and increasing variability in individual demand. In such cases, the potential of cross-docking for controlling the logistics and distribution costs, while at the same time maintaining the level of customer service, is particularly useful (Apte and Viswanathan, 2000).

Return to Operations Management topic.

Related concepts

Reverse Supply Chain / Reverse Logistics

... [A] well-managed reverse logistics system allows the company to retain contact with customers and derive valuable feedback from them (O’Connell, 2007).

Find out more