Cross-docking Execution Requires Visibility into Prepaid Supplier Shipments

  2021 03 31 Cross Dock

Although cross-docking has been used extensively for years in the retail supply chain for store replenishment, we at project44 believe that the successful execution of this logistics practice is now more crucial than ever as retailers are struggling to keep store shelves stocked during the Covid pandemic. 

Retailers use the practice of cross-docking to speed up the flow of replenishment goods into their stores and avoid warehouse inventory storage. Cross-docking involves bringing in goods from multiple trucks into a distribution center (DC) and combining product from those various deliveries into a single mixed-product shipment for a specific store. The timing of inbound shipment deliveries must go off like clockwork for the DC staff to receive goods and assemble mixed loads quickly and expeditiously.

The Problem of Information Blind Spots with Prepaid Shipments

But when the supplier ships goods under prepaid freight terms, it arranges for the trucking and only gives the retailer a date and delivery time for the inbound shipment’s arrival at the DC. As cross-docking requires the suppliers’ trucks to hit the mark for deliveries, early or late arrivals of inbound shipments can wreak havoc. Not only does a missed appointment window impact throughput for store replenishment, leading to out-of-stocks in retail outlets, it impairs DC operational efficiency with yard congestion and imbalanced labor utilization. No surprise, retailers have begun imposing hefty penalties on suppliers during the Covid pandemic for trucks missing their delivery appointments.

Because retailers don’t manage prepaid shipments, they are typically blind when it comes to any possible disruption in that type of inbound shipments. If the trucker encounters a delay from weather or traffic, the retailer’s DC doesn’t know about the problem until too late when the truck driver makes a phone call to inform the receiving warehouse of a late arrival. Manual communication is simply too slow to make quick adjustments in the fast pace of a cross-dock operation. 

project44 Offers Supplier Visibility For Prepaid Freight

We at project44 believe that the answer is for retailers to have inbound in-transit visibility of prepaid freight with automatic updates on shipment status, location, and delivery times. Our new functionality - Supplier Visibility - give retailers just that ability to see incoming shipments in transit for freight they don’t manage. 

With a complete, real-time picture of in-transit inbound shipments, the retailer’s DC can now plan ahead for yard and warehouse labor allocation. The DC managers are now in position to make operational adjustments to better accommodate early or late truck arrivals. The inventory team can achieve the goal of higher inventory turns and, when necessary, make adjustments in shipment allotments for store replenishment. The end result of having continuous real-time visibility over unmanaged supplier freight is that the retailer can reduce inventory carrying costs, improve warehouse labor optimization, and increase yard optimization and operational efficiency. 

Suppliers benefit as well. When their prepaid inbound shipments are visible to the retailer, suppliers are less likely to get hit with penalties for missed schedules.

Retailers Gain a Market Edge with Cross-dock Precision

As retailers struggle with fluctuating consumer demand and supply shortages during the Covid pandemic, cross-dock execution must be performed with precision for resupplying stores with available inventory. Cross-docking retailers must have visibility with automated updates on all in-coming shipments whether the inbound transportation is under their control or their suppliers. By ensuring visibility of prepaid shipments into the cross-dock operation, retailers gain a competitive edge in keeping their store shelves stocked.