The Ins and Outs of Crossdocking Solutions
Crossdocking—immediately converting inbound deliveries to outbound shipments—has become popular among shippers and third-party logistics (3PL) providers, because it reduces inventory costs and improves delivery times by eliminating intermediate warehousing activity.
Effective crossdocking requires continuous real-time visibility of shipments from supplier to end customer. Unfortunately, typical enterprise resource planning (ERP) systems don't provide granular details specific to crossdocking transactions.
Tracking individual parcels—even between trucks within the same warehouse—is a must. Low visibility risks duplicate or delayed shipments, excess inventory, and added overhead from processing rogue shipments. Companies need to know the status of crossdocked items to control product flow and effectively troubleshoot problems.
Keep Your Priorities Straight
Operations aiming for best-in-class crossdocking performance need a solution that addresses these priorities:
- Visibility. Real-time shipment status, location, and delivery time information must be available to customers, suppliers, and 3PLs.
- Traceability. Solutions must provide up-to-the-minute historical records of shipping activity, down to the individual parcel level, to isolate errors and bottlenecks, and simplify troubleshooting.
- Compliance. Rules and standards need to be enforced, ensuring accuracy, timeliness, and approvals.
- Agility. Companies must be able to quickly reroute material in transit to meet changes in demand.
Know What to Look For
The following checklist will help you choose a solution that enables continuous key performance indicators:
- Advanced labeling. Labels must meet customer and 3PL requirements, and should include unique identifiers or parcel tracking numbers to facilitate visibility.
- Distinct tracking database. Information on crossdocked shipments should reside in a distinct database that provides an audit trail, including individual shipment status and a view of shipping activity spanning all suppliers.
- Mobile data collection devices. Crossdocking requires a coordinated team, so mobile data collection technology is essential. Handheld devices enable personnel to scan shipments slated for crossdocking, and the devices directly update the database.
- Supplier sweep support. Organizations with extensive distribution networks often want to extend the receiving process to suppliers to manage pickup, ensuring just-in-time receipt to the crossdock. Ideal crossdocking solutions support supplier sweep pickup of inbound materials.
- Validation and reporting. The system must enable a central administrator to perform end-of-day validation of materials on-hand and delivered, and support consolidation of information across suppliers and customers, down to the individual shipment.
- Returns. An ideal crossdocking solution creates unique identifiers that provide visibility and traceability for the returns process. Handheld data collection devices must also enforce compliance with returns policies.
Crossdocking follows the same basic rule as other data-driven supply chain practices: You can't improve what you can't control. To optimize performance, companies should complement their existing ERP system with integrated visibility, traceability, compliance, and agility capabilities. Otherwise, they risk multiplying the very inefficiencies that crossdocking is intended to address.