Final answer:
Cross-docking is the system in which products are delivered to a warehouse, sorted, and immediately redistributed to stores, greatly reducing the need for inventory storage. It is exemplified by just-in-time delivery in the automotive industry and highlights the importance of strategic location for efficient transport.
Step-by-step explanation:
The system described in the question is known as cross-docking. This logistics practice involves the delivery of products to a warehouse where they are immediately sorted and directly transferred from incoming to outgoing transportation vehicles. Through cross-docking, items are distributed to stores quickly, minimizing or eliminating the need for storage in inventory. This approach not only saves on storage space but also can contribute to more efficient supply chain management and reduced costs associated with less handling and storage time.
An example of this system’s benefits can be seen in the just-in-time delivery method adopted by automotive manufacturers like Honda in the 1980s. The focus on having parts delivered exactly when needed ensures high-quality control and reduces warehousing needs, emphasizing the importance of strategic location selection for transport efficiency and cost-effectiveness. Areas with unhindered access to transport options and less congested networks are preferred to enhance the overall supply chain process.