Cross-docking and inventory management are the elements of logistics. Cross-docking means that little or no time is spent on the storage of materials being supplied from the manufacturer to the buyer. Inventory management is the systematic approach to ordering, storing, and using a company’s inventory. As a system, logistics also includes other processes aimed at managing the shipping.
Nowadays, logistics in the business sector is a process of shipping the goods from the manufacturer to the customer, including storage, transportation of products, and managing the efficient goods flow. As a multiple-stage system, logistics includes many processes that should be managed appropriately. All the elements of logistics are aimed at controlling different stages of the whole process of shipping; some of them are going to be discussed in detail.
The term logistics appeared within the military; it used to mean the process of supplying different resources and equipment to troops. However, it was in 1950s that the term started to be used in relation to business. Cross-docking is an essential element of this system; it is a process that aims at reducing the amount of time for the goods to be supplied from the manufacturer to the client. This technique allows businesses not to store products in the warehouse for a long period of time and to deliver them to the buyer directly.
The cross-docking system may be more appropriate for certain kinds of products. Such goods do not usually require additional inspection; they can be items of high quality that need to be shipped to the customer directly. Pre-tagged and packaged goods are also likely to be transported without warehouse storage; the products that arrive at the loading point have special markings. To sum up, this kind of direct delivery allows reducing the time of shipment, the space in the warehouse, and even the costs of the whole supply process.
As for inventory management, it is a process of ordering, storing, and selling the inventory of a company. For every type of business, proper management of raw materials and finished products is highly important. For example, it is vital to track the inventory, as its shortage may result in a client’s dissatisfaction, and consequently, financial loss. Material gluts can also influence the goods flow in a negative way and lead to additional warehouse clearance and extra costs. Therefore, in order to manage the stock, companies need to control inventory carefully.
Apart from cross-docking and inventory management, logistics can be characterized by other features. For example, companies engaged in the system need to develop ways to control orders and manage warehouses. Order picking is also an essential element of the supply chain, as it implies choosing the right materials to fulfill the client’s requirements. It is important to develop special software to have immediate access to all the information concerning shipping. Besides, companies should increase the effectiveness and quality of transportation and be able to plan the use of their materials and financial resources properly.
To conclude, logistics is a complicated but essential part of every successful trade deal. Proper management of the goods storage, transportation, and use is the basis of establishing stable long-term relationships with customers and partners. Cross-docking and inventory management are the elements of the logistics concept that allow minimizing the time and resources spent on goods shipment; however, it is also necessary to pay attention to supply chain management, control of warehouse, and other significant aspects.