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Guide to Cross Docking When it comes to costs and warehousing, every organization has its own priorities and they need to consider and weigh up the disadvantages of implementing cross docking into the organization’s supply chaise in order to make the right decision. Cross-docking might sound advantageous in reference to the fact that in logistics jargon, anytime an item sits, in-between its intended destination is cost. However, in cross -docking, a product’s from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time, therefore less price is paid. The disadvantage of a cross-docking operator is that it requires much management attention, time, and planning which are all necessary to make it work effectively. We can look at it this way, that when cross docking is implemented or before it is implemented, there is a need to set up the cross docking terminal structures and link them to semi-trailer trucks or railroad cars into outbound trucks with little or no storage in between, and this would require time and capital unlike warehousing where, the job is to establish a warehouse, advertise the facility and maintain a good account of its inventory. These facilities sees to it that before they offer anything they make sure that the suppliers would deliver the goods to the customer so that the cross docking terminal will not break up the entire supply chain so that customers are able to take advantage of this facility. For a cross-docking client, their priority is speed to grow their organization and achieve a competitive advantage, which is why the productivity of a supply chain becomes the more important factor. An organization’s survival depends on customer satisfaction and thus this is especially true. With a reliable supply chain, one can keep customers, otherwise, customers are lost. So if you are buying items online which you pay electronically, it is very much convenient to pick up the exact item that you have been looking for except that it takes some days before you can actually receive them, but you get better satisfaction if there is a company selling that same item with the same price, but it able to deliver much earlier than the other. This is the sort of satisfaction that begins and ends with the organization’s supply chain management.
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A lot of companies are now using cross-docking which reduces labor costs because the products no longer requires packing and putting away in warehouses, there is reduction of time in packing from production to customer, and this greatly helps to improve customer satisfaction, and it reduces the need for warehouse space since the products are not required to be stored.
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There are different types of cross docking including manufacturing cross-docking, distribution, transportation, retail, and opportunistic cross-docking where it can be used in any warehouse, transferring a product directly from the receiving dock to the outbound shipping dock to meet a known demand.