MIXMOVE’s Approach to Optimising Cold Chain Management for Pharma Deliveries

Cross-docking logistics is a process where products are directly transferred from suppliers and manufacturers to customers with limited storage time during transit. Previously, suppliers would deliver a product to a warehouse, where it would sit for weeks or months. Then, when a customer ordered the product, it was set onwards for final delivery. In cross-dock logistics, the product spends a brief time (in hours) at the cross-docking facility before being loaded onto a truck for the final leg of the journey.

The potential benefits are remarkable. By eliminating unnecessary handling, companies can save money at every stage in the supply chain. Fewer warehouses, fewer miles travelled, and less staff. It’s the ultimate cost-saving method that creates a more resilient logistics network.

3 Costs Savings from Cross-Dock Logistics

1. Reduced Inventory Holding Costs

Cross-docking logistics was pioneered by food retailers. Fresh produce cannot sit in a warehouse for days or weeks. It needs to go from farm to shelf in just a few days or less. This led to the creation of just-in-time supply chains, where supermarkets receive an order just as the last lot of stock is used.

When extended to other industries, it led to a dramatic change. Instead of investing in costly long-term storage, companies eliminate or minimise their need for warehousing. After all, the product spends only a brief time in the cross-docking facility before being loaded up for forward transit.

The cost savings include:

• Reduced Warehouse Capacity. There’s no need to run an expensive warehouse. That lowers rental costs, heating costs, and other storage-related costs.
• Inventory Management. Spending time removing products from a truck, processing the items, and then storing them safely is a time-intensive process. Then, the warehouse team has to do it again when the customers require the product. Every second spent on these tasks is wasted money.
• Less Staff Required. If warehouses are smaller and staff spend less time on inventory management, then companies can run their logistics hubs with a smaller team. These leaner teams can operate with greater efficiency and consistency.

2. Enhanced Transportation Efficiency

The primary objective of cross-dock logistics is to ensure that the goods spend most of their time in transit, not sitting on a shelf. Given this clear goal, companies can finetune their logistics networks, optimising transportation routes. This means fewer shipments are needed overall to consolidate deliveries.

The cost savings include:

• Reduced Fuel Consumption. Spending more time driving goods between warehouses is a waste of time and fuel. Given the rising global fuel prices, minimising fuel expenditure is crucial for the bottom line – especially in a logistics company. Plus, there are the added benefits for sustainability and the planet. Modern companies have a strong focus on their carbon footprint. This is a simple way to cut your overall emissions.
• Less Wear and Tear. It might sound small. However, all the extra miles of conventional logistics add up, slowly wearing down your vehicle fleet. These vehicles require more frequent repairs and replacements. That means more downtime and extra costs for businesses.

The extra fuel, transport delays, and vehicle wear and tear soon add up – costing companies potentially millions a year. We know; we’ve seen it in action.

Case Study: 3M

3M worked with us to streamline their logistics. The problem? Well, previously, they produced lots of different pallets to transport their goods. These pallets were irregular, meaning goods were stacked inefficiently. In fact, trucks and containers were only about 35-45% loaded.

There were also issues with real-time documentation, managing stable lead times, optimising logistics costs, and more.

Our solution relied on the X Dock Warehouse Management Software. We transformed their logistics into a dynamic, real-time operation with a focus on optimisation. We made sure each truck was full, moving cargo efficiently between the hubs, factories, and clients.

Patrick Van De Vyver, former Head of EMEA’s Logistics Operations with 3M, noted, “By using the MIXMOVE software, 3M managed to reduce transport costs by 35% and CO2 emissions by 50%.”

3. Lower Team Costs

We often talk about keeping the goods in transit, reducing the overall workload, and minimising travel times. But if everything is done more efficiently, you need fewer people to complete the work. Remember, it’s just about moving goods from A to B as quickly as possible.

Little wonder, then, that one of the biggest cost savings from cross-dock logistics is the lower team costs. The direct transfer approach means fewer workers are needed for sorting, storing, and packaging within a large warehouse. Instead, a smaller, leaner team can unload the products from the first truck, rapidly preparing them for the second. The downtime might be as short as a few minutes. There’s no need to store or package the items – it’s all down earlier in the supply chain.

Plus, if packages move more directly within the supply chain, you might ever require fewer drivers. Of course, this means that your remaining team is highly trained and drilled in coordination. The entire system relies on precise timing and communication between suppliers, facilities, and transportation providers.

Thankfully, X-Track’s real-time transportation visibility lets you see every step in the journey. You can alter routes to optimise transit times, letting your hub team know precisely when an order will arrive.

Final Thoughts

Cross-docking logistics significantly enhances supply chain efficiency, delivering key cost savings through reduced warehousing needs, streamlined transportation, and leaner workforce requirements.

By efficiently transferring goods directly from suppliers to customers, companies circumvent the substantial costs associated with prolonged storage and excessive handling. This method not only reduces operational expenses but also reinforces the supply chain’s resilience and sustainability, establishing it as a critical strategy in contemporary logistics management.

Learn more about MIXMOVE’s products, including X-Dock and X-Track. Request a free demo to see our software in action.