How is it possible to transport products to their recipients faster and with less logistical work? The answer is with Cross Docking! Cross Docking is a good's distribution process that operates without storing inventory. The concept stands for the nearly uninterrupted transfer of a product from production to the purchaser. In practice one encounters two forms of this modern logistics system: Cross Docking as a one-step (Cross Docking 1) and as a two-step process (Cross Docking 2). Only Cross Docking 2 is currently used by METRO Group.

Cross Docking 1 refers to merely bundling shipping units for transport. Orders issued by stores are passed-on to suppliers one-to-one. Suppliers pick goods according to the store’s orders and draft delivery notes and invoices for the goods picked. These individual orders are then pooled into one and sent to the transshipment point, i.e. the Cross Docking terminal, where logistics companies take over the distribution to the individual stores, and bundle the order together with other orders for each particular store.

In Cross Docking 2 suppliers receive an overall order summarizing the orders of the individual stores. They transport the ordered goods to the transshipment point as one big delivery where, in contrast to Cross Docking 1, the goods are repacked onto palettes with other goods for the same store. Logistics companies then deliver the goods to the respective stores.

In Cross Docking 1 the 60 wholesale stores of the Cash & Carry sales division send their orders for a certain product to the manufacturer via Electronic Data Interchange (EDI) once per week on a defined day. The manufacturer receives the orders from all 60 stores at the same time. They place the orders for each store on palettes and write up the necessary accompanying papers. Then they transport the products all together to one of the six Cross Docking terminals, for example the Verena central warehouse of METRO Group Logistics in Unna. The products are then received and transported directly to the loading area of the individual stores. When the next truck is then loaded for a specific store, palettes of the respective manufacturer are also added and delivered to the store.

In Cross Docking 2 all 60 Metro Cash & Carry wholesale stores send their orders to the Metro central server via Electronic Data Interchange instead of directly to the vendor. This server pools all orders which are then transmitted to the manufacturer as one big order via EDI at an arranged time. The manufacturer packs all ordered goods onto palettes, without marking them for specific stores. The goods are then transported to the Cross Docking terminal in Unna. The staff there divide the large delivery among the individual stores – according to the amounts ordered.

With Cross Docking, retail companies and manufacturers are able to significantly optimize their logistical processes. The delivery times are considerably shorter. Pooling orders bypasses the problem of minimum orders. Minimum orders force stores to order more goods than needed and reserve corresponding storage capacity. Thanks to the delivery process being better coordinated goods availability in stores increases. Cross Docking also reduces the need for warehouse capacities in distribution centers and stores by doing without stock-keeping. And because hardly anything has to be stored the risk of goods becoming worthless due to expiry dates being exceeded is reduced. Cross Docking is an especially efficient system if deliveries are made in the evening. Goods can be put out overnight and are ready for the customers the next morning.

Manufacturers benefit from Cross Docking due to lowered organizational and administrative work. When grouping orders together, the supplier does not have to process each individual order from each store. Several orders can be handled as one large order. Manufacturers also profit since they do not have to invest as much work in picking the goods, significantly reducing the overall transshipment process. And finally: Manufacturers can plan their production much better.

Cross Docking as a logistics system is particularly valuable if large volumes of goods are required. This applies to Metro Cash & Carry wholesale stores especially. Cross Docking has been implemented in the fresh-goods sector since 1996 and for fish products since 1997.
Metro Cash & Carry currently has regular business relationships with approximately 3,000 vendors. Of these, around 450 manufacturers are involved in Cross Docking 2. The sales division’s logistics experts intend to convince more business partners in the future that the system is advantageous to both parties and convince more manufacturers to operate Cross Docking.