How can cross-docking improve inventory accuracy?

Cross docking is a strategy to eliminate the waste of motion. The key idea is to move recently received stock to the shipping process without going through storage and retrieval from racking. This is often done for perishable goods such as fresh fruit and vegetables where a distributor receives a single day's worth of supply from multiple producers and then sorts the deliveries to customer orders on their dock. The scale of the operation will determine if this can be done on the same dock or if the stock has to be moved to a separate despatch dock for sorting to orders. This is also done for buy to order items that consolidated with the bulk of the order from that DC. Where possible it is better to drop ship and avoid handling the items.

The benefits of cross-docking include lower inventory storage costs because products require little if any warehouse space. Cross docking can also speed delivery and increase efficiency by reducing the time for moving products at every step of the supply chain from supplier to customer.

It doesn't. Cross docking is not an inventory accuracy strategy it is a materials handling and stock reduction strategy. There may be some accuracy benefits that result from reduced handling but that is not the reason you would use it.

Cross docking is a materials handling and stock reduction strategy. It eliminates the need to hold slow moving inventory by buying to order instead of holding stock. It increases the turnover of perishables so that the customers receive fresher produce. It eliminates put-away replenishment and picking moves in the warehouse. It may reduce transport costs when used for freight consolidation. But it might increase freight costs (and carbon output) due to more frequent deliveries. This is the trade off with lower handling costs, less inventory risk and waste, lower stock holding costs and improved service to customers to provide a net cost reduction. Only some items are suited to this strategy.

Cross docking needs careful coordination of inbound supply with outbound orders to make sure that the items required to fill the orders are delivered on time so that the orders are shipped on time. The cross docking process could be managed entirely with paper (and often is) but using a modern WMS to speed the receipt and sorting of goods to orders will usually be faster and more accurate. Cross docked items are not usually also held in stock so accuracy and timeliness of supply is critical. When supply fails then emergency supply measures will need to be in place or customer supply will be short and the distributor's reputation will be damaged.

If you are think you have an obvious need for cross docking and are not already doing it then I suggest having a look at what your competitors are doing if you can, or find another business already doing cross docking and see what you can learn from them. Talk to your WMS vendor to see what functionality they have to support the physical moves of stock and order fulfillment process. Then talk to your operations and IT team to design your own processes that suit the way you need to work. If you are not skilled at process design then you can message me on Linked in and I will help you.