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Cross Docking

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Adam NadeemG1612.4.14SCMT309 – PAPPUQuestion of the Week #05 (QOTW05)QOTW5: ‘Cross-Docking’ & similar flow strategies have revolutionized the manner inwhich companies conduct their logistics operations. Many contend, however, that these are NOT for everyone. Select specific examples to illustrate your answer.Cross docking is a warehouse strategy of moving goods directly from the receiving dock to the shipping dock, reducing the handling and storage steps in between to a minimum. Benefits of cross docking are reduction in labor costs, as the products no longer require picking and putting away in the warehouse; in cross docking two very time consuming events in storage and order picking are eliminatedfrom the fulfillment process. Cross docking revolutionized the manner in which companies conduct their logistics operations. Cross-docks can provide a high-velocity alternative to direct shipping at lower transportation cost with product mixing capabilities. First thing is first it is necessary to analyze inventory, transportation, and service trade-offs before choosing between direct shipping and the use of distribution facilities. Employing a combination of two strategies one to ensure distribution efficiency and the other being customer satisfaction may be the ultimate answer. Many companies like Walmart and Target use a wide variety of distribution methods to accommodate variation in product volume, size, and supplier proximity. Direct shipping avoids the need to build and operate distributionfacilities, reduces inventory in the system, and often compresses order cycle time. Direct shipping works particularly well when customers place orders for truckload quantities or when product perishability is an issue. For example, it is better to have bread and milk delivered directly to a grocery store than to a distribution center as they are high-volume products and direct shipping maximizes product shelf life. The same distribution process would be totally inappropriate for consumer products(ice cream and ipods), which need to be distributed quickly, shielded from the environment, and protected against theft and damage. One type of cross docking, called ‘retail cross – docking’ is the process that involves the receipt of products from multiple vendors and sorting onto outbound trucks for a number of retail stores. This method was used by Wal-Mart in the 1980s. They would procure two types of products, items they sell each day of the year, called staple stock, and large quantities products which is purchased once and sold by the stores and not usually stocked


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