Cross-Docking and its Implications in Location-Distribution Systems

The desire to decrease logistics costs has led organizations to investigate more profitable approaches to supply chain management. Three proven, yet not fully integrated, supply chain levers are distribution network optimization, shipment consolidation, and cross-docking (Brockmann 1999). The first, with the largest literature, finds the number and best locations for facilities. The second may be overlooked, but shipment consolidation gives a proven payback whereby less than truck-load (LTL) shipments are combined into truck-load (TL) moves (Figure 1). Shipment consolidation enabled Nabisco Inc. to cut transportation costs in half, reduce inventory levels, and improve on-time delivery (Quinn 1997).