Houston, TX, February 09, 2013 --(PR.com
)-- Cross-docking, or the process of taking freight directly from the receiving dock of the warehouse to the point of departure, can save businesses a significant amount of money. However, according to recent research conducted by Dr. Kevin Gue at Auburn University, certain types of freight and business models benefit from this process more than others. Careful research and an understanding of the costs and benefits associated with cross-docking can help businesses determine which path is best for them. Whether a business is moving freight through a warehouse in Houston or Pittsburgh, the overall advantages and disadvantages to cross-docking remain the same.
Products with demand that remains high and relatively stable are a good example of an ideal use for cross-docking. When a company knows that it can sell all that comes in, there is not much need for keeping a significant inventory, or the costs associated with it. Other companies that are able to sell all products in the store immediately, such as discount clothing stores like Ross Dress for Less and T.J. Maxx, are able to use cross-docking effectively as well. Customers expect new discount clothing from these retailers on a regular basis, and there is no need for the companies to store product that will only become more difficult to move over time.
Another example of a successful cross-docking strategy is demonstrated by the appliance manufacturer Whirlpool. The company can offer appliances to customers with a guaranteed two-day delivery through cross-docking, all without the costs of maintaining an extensive warehouse inventory. This allows Whirlpool to avoid having a dedicated warehouse in Houston or Dallas or any other city.
If a business has customers that expect certain variability in what products are on the shelf at any given time, cross-docking is also an option for cutting costs.
Large warehouse clubs such as Sam’s and Costco use this approach with great success, although the process can take some adjustment. Costco, for instance, had to design a complete system for its cross-docking to work effectively. This including purchasing special pallet jacks that could transfer between four or eight pallets at a time.
The research conducted by Dr. Gue has demonstrated that cross-docking can be an incredibly tool for the right business, but it will not prove beneficial to everyone. Cross-docking has its own strengths and weaknesses, and will not be an effective strategy for all types of business. Traditional inventory models, or even the use of public warehouses, might be a better option for some. In most cases, a business will need to adopt a hybrid approach to achieve maximum efficiency for the lowest cost.
Timeline Logistics Inc., based out of Houston, TX, offers warehousing services and courier services across the majority of Texas. With warehouses in Houston and Dallas, Timeline gives businesses access to cost-effective public warehouse space, as well as creative freight solutions, such as cross-docking and pick and pack.