Cross-docking is one of the most successful practices in logistics that optimize the supply management functions. It enables the manufacturers to minimize time for products to reach customers. Besides, it also allows them to prevent piling up an excessive amount of goods. However, the approach carries some shortcomings too which lead to unintended consequences if managers fail to address them efficiently. Fortunately, the major cross docking challenges are dispersible.
It is essential to list down the notable risks of traditional cross docking before sharing the most appropriate solutions.
Manufacturers face following cross docking challenges.
- Absence of a centralized management system which regulates the amount of goods in each truck.
- Inability to track every parcel with traditional cross-docking.
- Management and security of every truck and warehouse significantly increase the operational costs.
- Absence of standardized communication mechanism with distributors and retailers.
- Inefficient planning for distribution routes ahead of operation time.
- The distribution is not optimizing with the increasing rate of demand.
- High rates of errors in warehouse record keeping. This problem further gives rise to a number of issues including excessive supply to retailers and unnecessarily stored items.
The manufacturers cannot reap the economic benefits of cross docking as long as they do not have an effective management strategy at their disposal. The global demand of cross-docking is substantially increasing. In the US alone, the gross revenue of 3PL crossed $175 billion mark in 2017.
However, many organizations resist incorporating cross docking considering it an ineffective approach. Their assessment is baseless because research indicates that cross-docking reduces the cost by 50% when efficiently used.
What makes cross docking an efficient approach that can minimize costs and optimize the entire logistical operation?
“There has never been a more exciting time for collaboration between logistics and technology professionals as they enable AI in logistics.” (Matthias Heutger)
The recent decades are witness to remarkable developments in cloud-based database management technologies. The ERP solutions are effective, but they fail to provide real-time tracking ability. Moreover, the traditional cross docking techniques do not incorporate the AI, IoT, and Big data. The AI enables the managers to not only automate the processes but decision-making process as well.
Technology solves the challenges of cross docking in following ways.
Centralized Warehouse Management
The number of finished goods reaching a warehouse, the existing quantity and the amount dispatched for distribution are some of the chief activities of warehousing. These functions require a sizable workforce. Any number of humans working in a warehouse is prone to making errors. The miscalculation and mistakes in updating the repository database are frequent.
A couple of technologies provide the solution by eliminating erroneous entries, security vulnerabilities of databases and miscalculations.
Managers recognize the Cloud-based fleet management software and BlockChain technology as the most reliable choices. Both approaches allow efficient database management while preventing data security breaches. They ensure the prevention of data duplication or loss.
Duplication results in massive misunderstandings between warehouses, retailers, and manufacturers. They also cause time wastage. Data loss and availability compromise occurs when an unauthorized person with modifies the database. An employee may also cause a deliberate or accidental security violation.
Cloud-based systems keep multiple copies of record. The systems are intelligent enough to alarm the management when there is a probability of security breach. The managers do not need to keep more than a few workers. Moreover, the data remains at remote locations instead of end-node systems. Hence, there is essentially no need to maintain large physical stores.
Cross Docking Network Management
The supply chain managers have the ability to get precise location of their trucks from anywhere in the world. The GPS location gives real-time coordinates of the vehicle. Apart from security of vehicles, this ability enables the managers to ensure that drivers take the best possible route.
The GPS technology is helpful for warehouse managers as well as retailers. While warehouse managers and drivers ensure that the fleet takes the best path, retailers can estimate the time for fleet arrival. In essence, cross docking network management results in a “connected” environment. Each of the connection participants deals with shared database.
Intelligent Warehousing Systems
Warehousing requires efficient decision making to ensure high productivity for manufacturers, suppliers, and retailers. The production units can make effective aggregate planning when the warehousing activities are productive and quick. One of the most notable differences between humans and machines is the independent decision-making process. Enabling computers to make decisions by themselves is adding remarkable value to their ability of swift computation.
The AI is attaining the central significance in third-party logistics. Software systems can compute the previous data and make appropriate suggestions. This data analysis makes the planning and implementation more productive.
IoT technology capacitates the cross-docking staff to avoid miscalculations. Software powered by IoT is capable of determining quantity and quality of goods.
Portability and Two-Way Communication
The managers can keep a watch on operations while they are away from workplace. Each of the technologies including AI, cloud infrastructure and IoT can be integrated into the smartphone through an app. Thus, the operations over portable devices improve cross-docking.
One of the cross docking challenges is communication deficit. Although emails and phones are already serving communication purposes, yet they are susceptible to generating misunderstandings.
The shared and connected environments save time and enhance performance. An intelligent system ensures to notify the stakeholders once a task completes. Thus, they no longer need to allocate time for communication over calls and emails.
The transportation cross docking is a fruitful alternative to drop-shipping approach. It is productive on many levels as suppliers, as well as retailers and manufacturers, earn significant benefits from it. However, some businesses fail to identify its impact due to unavailability of intelligent systems. The incorporation of intelligent technology in cross docking is proving to be the platform for success of future third-party logistics.
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