Cross docking is a logistical procedure where products from a supplier or retailer are distributed directly to a customer with marginal storage and minimal storage time. It takes place in a distribution docking terminal, with inbound docks on one side and outbound docks on the other.
To put the process into perspective, imagine that three trucks arrive at the terminal: one is carrying Product A, one is carrying Product B, and one is carrying Product C. On the other side of the terminal are three more trucks, waiting to go to specific customers. Each of the three customers want all three products. So, they are unloaded from the incoming trucks, with one box of Product A going to Outgoing Truck #1, one box of Product A going to Truck #2, and one box of Product A going to Truck #3. The process continues until the client order is complete and each outgoing truck heads to its respective customer. Through this process, each customer only gets one delivery with all the products they need, as opposed to three separate trucks arriving to provide one individual product each.
Why is this important for tobacco products? For one thing, cross docking eliminates the need for larger warehouse facilities, saving operational costs. It also helps to take delivery burden off the end customer, saving them time, money, and effort. And it certainly helps to make inventory control much more manageable for them. Consider the number of tobacco brands and styles. A retailer can receive a much wider line of products without having to place bulk orders, so they can achieve an economy of scale, which helps to reduce their costs.
In addition, cross docking allows for:
- Inspection of the product(s) before they are loaded for final delivery, reducing the probability of damage to the inventory and the costs associated with returns.
- Reduction in transportation time and costs.
- Increased customer satisfaction through better product quality, brand choices, and availability.
- Sales reporting by specific retail location back to the manufacturer.
- Tax stamping, payment reporting, and licensing to the states.
- Reduced cost of goods provide direct operational and delivery efficiencies.
Let Atlantic Dominion Distributors put crossing docking to work for you and your selection of the tobacco products you offer your customers across Virginia, North Carolina and South Carolina. It’s a great way to increase your profits.