Cross-docking means that an item is coming into a receiving operation, it’s on your dock, and it’s already been assigned or allocated to fulfill an order. The warehouse does not receive the product in, put the product away, come back later, and pick it for an existing order. The business is trying to optimize receipt from receipt, immediately to fulfillment, to save labor and save steps in the process.
Cross-docking is the ability to receive it, identify that it’s been received, update the ERP system, so the vendor can be paid, and then immediately process the fulfillment step of picking that to a particular order.
Benefits of Cross-Docking
Planned cross-docking is done in advance with orders as the distribution center’s item is not stocked. For order fulfillment, the supply order is placed to the vendor from the distribution center. The item comes to the distribution center’s receiving dock and it has already been allocated to go directly to that customer. Planned cross-docking not only saves warehouse time but also is a very efficient process for the distribution center’s working capital. The capital employed is minimal as the item moves very quickly in and out of the warehouse.
Back-order Fulfillment and Back-order Processing
Cross-docking often gets confused with back-order fulfillment or back order processing. Back-order fulfillment or back-order processing is where an order is received, and an order is picked short due to an item being out of stock for the customer order. By the time the item comes into the facility, there is an outstanding back-order against that item. This is reactive back-order fulfillment at the time of receiving.
Most ERPs and many WMS solutions struggle with the automation of cross-docking steps for both planned or reactive based back-order fulfillment. The process is very manual and prone to errors. So while a distribution center may be saving the labor and travel time associated with putting the product away and then re-picking it, the steps involved in using cross-docking as a receiving process can be cumbersome, manual, and verification intensive.
The ideal cross-docking software processes the receipt of the item, just as any other receipt you would process, updates the ERP as to what’s been received so the vendor can be paid, and then immediately at that point of receipt, fulfill an order or multiple orders with that product, route those to staging for shipping, with nominal, if not any additional steps required.
Intek and Minerva WMS solutions are capable of performing these processes in both an automated and non-automated environment.