Tag Archives: distribution center

Consider This When Choosing Your Next DC Location

When a company outDistribution_Center.jpggrows its distribution capacity, it expands by opening a new distribution center (DC). The best approach to choosing your new DC location is to evaluate your entire logistics strategy.

Deciding where the DC is located is crucial for long-term success. Paying close attention while selecting the site could save a company from labor shortage problems, excess transportation fees and vendor issues. The right location could mean better customer service, strong data collection, and an increased bottom line.

Read: How Virtual Inventory Works

Location, Location, Transportation?

Transportation is typically one of the highest expenses for companies. These costs are complex to calculate because the route or mode option can change, making each rate different from another.

Inbound Logistics notes that transportation is one of the most important factors in distribution center logistics. The cost of hauling products from a DC to customers and consumers is based on fuel prices, driver/truck maintenance costs and demand, which fluctuate at random.

Although trucks are the standard method of moving freight, companies often look for a DC with rail access to find cost savings. When shipping large amounts of heavy products, rail’s cost-effective delivery is an obvious trade-off.

Think about it like this: A retailer needs a DC that will best serve its delivery points. By analyzing its network of existing DCs, the retailer can determine the next site to optimize its processes. In retail supply chTransport Quote.pngains, on-time delivery is a top priority, so being close to customers and suppliers on accessible transportation routes would be considered first in the site selection.

Questions to Ask Yourself Before Deciding on DC Location

  • Where are your customers?
  • What is your present busiest DC?
  • What will the new inventory strategy be?
  • Will the transportation strategy need to change?

Factors to Consider Before Deciding on DC Location

  • Infrastructure
  • Labor costs
  • Proximity to customers and suppliers
  • Site requirements

Planning and building a new distribution center takes time and money, but choosing the best site and evaluating logistics and transportation plans will help your business succeed in the long run.

Continue Reading: Why Warehouse Technology is the First Step in Fast ShippingRequest Free Logistics Opportunity Assessment

What is Cross Docking in Supply Chain Management?

what is cross dockingWhat is cross docking?

Cross-docking is a logistics strategy when carrier immediately unloads the cargo from an incoming container and then loads it directly to an outbound carrier. It is a practice that keeps supply chains moving in a productive, effective manner.

How does cross docking work?

Instead of a standard distribution center (DC), cross-docking facilities are more of a “sorting center”; a place where goods quickly pass through. These facilities require far less storage space than a DC. The docking terminal consists of inbound and outbound lanes. So, inbound shipments go to a receiving dock and then the products go directly to outbound destinations on forklifts or conveyor belts or sorted and consolidated before making their way to outbound shipping. Usually, the goods spend less than 24 hours within a docking terminal.

Types of cross docking

1. Continuous Cross-Docking

The simplest and fastest process. It provides a central site for products, so they are immediately transferred from an inbound truck to an outbound truck. If trucks arrive at the terminal at different times, they will incur a waiting time.

2. Consolidation Arrangements

The process of merging several smaller product loads into one truck or one big load in the dock facility. This way, incoming freight is combined with goods stored at the terminal to form full truckload shipments.

3. Deconsolidation Arrangements

This process is the opposite of consolidation arrangements. Large product loads are broken into smaller loads for easy transportation. Usually, these small loads go directly to a customer.

When cross-docking is used?

Moving from traditional DCs to facilities would enable a company to increase inventory turns and reduce material handling and distribution costs. Effective cross-docking leads a business to cost savings by eliminating the need for warehouse space and labor costs (less packaging and storing).

This method seems to be a universal upgrade for the supply chain. However, there are some industries that especially benefit from this method, they include:

  • Perishable goods, foods, and beverages
  • Inbound supplier components and raw materials
  • Already packed and sorted products, parcels

It is cost-effective for a company with high-volume shipments and substantial transportation needs – otherwise, shipping won’t be smooth or fast. Also, the method requires a heavy investment in automation, visibility, outbound, and inbound logistics.

How can you benefit from cross docking?

Trucking companies love this shipping practice because trucks have fuller loads and exact destinations for each shipment which saves transportation costs. This way, a shipper can adapt quickly to new selling channels and market conditions; this shipping method reduces the overall time to reach each customer.

Although this practice delivers significant financial and operational advantages, to achieve effective performance, companies must implement proper tracking and compliance. Just like other data-driven supply chain practices, cross-docking requires control and visibility of shipment from supplier to end customer. For more information about how PLS can help your company with customized logistics solutions and supply chain design, click here.