Question

What are the advantages and disadvantages of the staple stock and cross dock flow distribution center models?

Answer 1

Advantages of Cross dock

1. Material Handling: Material handling will be more streamlined at the cross docking point and all the activities related to material handling like labeling, weighing, verification of material labeling, etc.will be greatly improved.

2. Reduces need for warehouse : Cross dock reduces the need for warehouse to store materials, in some cases the existing warehouses will be replaced by the cross dock flow which is easier to build and need less space which results in cost saving for the company.

3. Reduces storing and packaging cost: Storing cost is reduced because with cross dock method inventory time is minimized and due to automated process the packaging cost is also minimized.

4. Transportation and Distribution Cost : The transportation cost is minimized because products transported to a single destination can be transported together, thereby reduces transportation costs. As the transportation is optimized, there is elimination of unnecessary processes like pick and drop of materials which reduces fuel consumption.

5. It assures faster product delivery at customer point: As all the processes are streamlined, there will be hike in production which ensures faster delivery at customer point.

Disadvantages of Cross Docking:

1. Much management attention and time required : To set up cross docking system efforts are required, also need more time and planning to design the process of material handling through cross docking.

2. Sometimes unable to deliver products on time: Due to automated process there may be technical failures due to which products can not be delivered on time at the customer end.

Advantages of Staple stock:
1) Staples are essential products like food, tobacco, beverages and other necessary items which can't be cut out from people's budget regardless of their financial condition. Staple items can be stored for a short period of time and thereby reduces storing and maintenance cost.

2) Staple stock flow provides better utilization of total available space. As these products can't be stored for a longer period there is neither any need of extra space in the existing warehouse nor there is requirement of a new warehouse. Staples are stored for a period of one week and then move to the customers point, again new products are stored and moved for delivery.

3) Staple stock flow provides flexibility of adding new stores with the existing one.

Disadvantages:
1. Due to short storage there may be stock out of products when there is high demand for the products. In some cases the time gap between incoming of products to the warehouse and outgoing of products from warehouse may be large.

2. Much attention is required for management of inventories: Since staples are stored for a limited period close attention is required to check the inventory and store the products if there is any shortages.