Cross--docking: Almost as prevalent as consolidation warehousing, 37 percent of the survey respondents currently cross--dock product through intermediary facilities before shipping on to their final destination and another 33 percent either plan or are thinking about using this type of transportation program in the future.
Like consolidation programs, designated locations, called pool points, are used to receive goods and to fulfill LTL demand ultimately destined for a market located in close proximity to the pool point. The initial truckload shipment is received in and moved directly to shipping against an open outbound customer order without ever being stored at the facility. Inventory velocity is increased by eliminating both the put--away and storage processes. The key to accomplishing cross--docking is to link the receiving process to an open order. The order is then consolidated and routed on to shipments with other orders.
There are many types of cross--docking initiatives based on activities performed on the shipment and time associated with it. The cross--dock program types are listed in order from simple to complex and provide detail of what happens to shipments once at the designated pooling facility.
Multi--vendor consolidation: Twenty--five percent of survey respondents currently participate in multi--vendor consolidation programs. Despite its low current employment throughout the cold chain, this program has the highest level of interest among respondents, with 41 percent either planning or thinking about planning multi--vendor consolidation for their future. Multi--vendor consolidation programs aim to offset increased transportation costs by consolidating LTL shipments from multiple manufacturers ultimately destined for the same retail, wholesale or food service destination.
Multi--vendor consolidation programs work through the use of service providers like 3PLs who manage manufacturers’ truckload--sized shipments at their facilities. The inventory from multiple manufacturers is ordered in consolidated truckloads by retailers, wholesalers or foodservice providers. This type of program enables the consignee to receive product when he wants it, thereby enabling him to better manage inventory investment, lead--time and use of dock doors and warehouse space. Multi--vendor consolidation is an example of a demand--driven supply chain where the ultimate consumer drives the process.
Transportation management outsourcing: Fifty--eight percent of the survey respondents have expressed no interest in outsourcing their transportation functions to outside transportation management providers. It is worth noting, however, that these outside providers can offer a full menu of transportation management services and can provide a single point of contact for clients, allowing companies to focus on their core competencies.
From an operational perspective, transportation management providers can leverage the total volume of freight they control throughout the supply chain to negotiate better rates and improve carrier availability. On behalf of a supplier, transportation providers can receive orders, tender freight and send advanced shipping notices to the consignee through electronic messaging. By leveraging carrier relationships, volume and technology, the outsourced transportation management solution can minimize cost and help secure the necessary transportation assets to fulfill demand.