Organisations generally concentrate on two prime factors namely, speed and productivity of the supply chain, which are the primary aspects for the growth of the organizations. Cross-docking is one of those countless strategies that can be brought into light, by which the organizations would experience much-needed added advantages. This feature has provided evidence to increase the efficiency of the system and also improved the handling times. Traditional methods followed had numerous demerits that obliged them to be replaced by cross docking 1. The term ‘cross-docking’ elucidates the procedure of transferring items to the cross-docking centre, commonly called as dock, by the inbound trucks, the processes that take place inside the dock such as consolidation of the products and their shipping to the outbound trucks to be delivered to the customers or retailers and the time taken for all these processes 2. It is a strategy followed in logistics with condition of no handling or storage time. This technique is applied to distribution docking terminals which usually include dock doors and trucks on both (inbound and outbound) sides with no storage space.
Initially, the products are brought by various modes of transportation like trucks and are assigned to the receiving terminal of a Cross-Docking Centre (CDC). As soon as the inbound trucks have unloaded their products into the CDC, they are directed inside the CDC for various kinds of processing like sorting, consolidation, screening and shipping for sending them to their respective destinations. This transfer is done by loading the processed products into the outbound trucks, from the outlet terminal, which are then distributed to the required customers, with condition that the total time taken should be as minimum as possible and tardiness should be prevented.
The traditional methods followed had innumerable pitfalls such as the need of a substantial warehouse space and inventory on hand at any point of time. In such trivial methods, the items remain scattered and then, items of higher priority become too difficult to be found. Transportation and labour costs are sometimes found to be at their peak. These processes sometimes led to the delay in delivering the goods to the customers from the docks. These are a few of those numerous demerits of the old trivial systems that are to be abolished by the process of cross-docking 3.
The advantages of cross-docking include streamlining the supply chain from point of origin to point of scale along with lowering labour costs through less inventory handling. It involves negligible or less storage time and potentially eliminates the requirement to retain safety stock by which it reduces inventory holding costs. It allows for consolidation of shipments and better utilization of transportation resources thus, reducing transportation costs. It also diminishes the time taken by the goods to reach the customers or the retailers by the outbound trucks.
However, the process of cross-docking does not apply to all warehouse requirements. Hence, it is mandatory to make a notified decision regarding the process, as to whether it will lead to an increase in the productivity, costs and customer satisfaction for a concerned business. Cross-docking counts on physical space which provides systematic organization along with productive sorting. It can be employed in a provision with a long, narrow building with loading docks on either side, all aligned to increase the quantities of loading docks and decrease the amount of floor space. Shipments in any cross-docking facility usually follow the same fundamental configuration: arrival of the materials is carried out on one side of the CDC, followed by sorting, consolidation and organization inside CDC and finally it is loaded and shipped via conveyor belt, forklift, pallet jack or any other tool) on the other side of CDC. With cross-docking, incoming materials have already been allotted to the further link in the supply chain, eradicating the need to wait in a distribution center to be “sold” or allocated. Considering the case of an ideal cross-docking, these materials are directly loaded onto unbound trucks, after being processed, as soon as they arrive at the shipping facility. Cross-docking has the capability to advance the supply chain for various specific products. Unpreserved or temperature controlled items like eatables, which are subject to quick transfer from the source to the destination, are benefitted by these processes. Some of the primary reasons for which cross-docking is implemented are as listed: to impart a central site for sorting of products and combining similar products to be delivered to numerous destinations with the fastest procedure having the highest productivity, which is described as “hub and spoke”; to merge multiple smaller product loads into a single transportation approach to minimize the transportation cost, which is addressed as ‘consolidation arrangements’; to fragment large product loads into smaller loads to enhance efficient transportation for easier delivery process to the customer, which is referred to as the ‘deconsolidation arrangements’.
However, just like any other procedure, cross-docking also has its own disadvantages. Potential partners might not be having the required storage capacities which might be essential and urgent at times. Transport fleet should be adequate in order to carry out flawless operations, which are difficult to maintain every time. Labour costs might sometimes be incurred and become unstable because of movement and shipping of stock. Excessive freight handling may lead to damaging of products, especially the fragile ones. A computerized logistics system is obligatory to sustain effective operations.
There are several factors that characterize the use of cross-docks such as continuous communication between suppliers, distribution centers and all other points of sale. Customer and supplier geography also plays a major role in determining the quality of exploitation of the cross-docks. Cost of the commodities transported, cost of inventory in transit, complexity of loads, handling methods, tracking of inventory in transit and the like are some of the factors which influence utilization of cross-docks. The configuration followed in cross-docking is generally the “I” configuration. The cross-docking facilities usually take the long rectangular I-shape with loading docks and doors on either side of the long edge. This configuration allows for the greatest number of docks and doors which in turn maximizes the quantities of shipping options within a facility. This also reduces the space required sometimes for long-term storage and permits smooth operation. More complex and larger organizations follow other configurations but an “I” configuration generally provides higher efficiency and cost-effectiveness for almost all companies.
Several types of cross-docking are practised which are listed as follows:
· Full pallet load operation – This is the simplest type of cross-docking and is generally, least expensive. In this case, an incoming load is received which is marked and segregated by outgoing orders. Such pallet loads are simply sorted and finally re-routed into outgoing trucks. These outgoing trucks then transfer the finalized products to different destinations. An example can be provided regarding a less-than-truckload (LTL) truck terminal, where products without touching the floor, i.e., without being stored even for a minimum amount of time, is transferred from one truck to the other.
· Case-load order makeup – In this type of cross-docking, the merchandise is initially sorted and marked by stock-keeping units (SKUs) and then sent to arrive at the dock. However, the goods must be distinguished by customer order, with the general condition that the pallet loads are to be broken down. After all, these happen, cases might be re-palletized and the new loads might be dispatched to the suitable outbound vehicles.
· Hybrid cross-docking – In some cases, stored materials in the warehouse are combined with incoming materials. Now, these newly completed palletized orders are directed towards outbound trucks. Similarly, some of the incoming materials may be stored temporarily in the warehouse instead of sending all of them for cross-docking.
· Opportunistic cross-docking – Here, considering the case of late-arriving products on back order, cross-docking is preferred to placing them in an inventory and order-picking. Such goods, upon receipt, can be cross-docked directly, or even combined directly with storage items. This operation can be very crucial in upgrading customer service.
· Truck (or rail) consolidation – Incoming products may be arriving by both truck and rail, which need to undergo consolidation in order to satisfy the customer orders. Here, the goods are combined, sorted and then shipped within 24 to 48 hours. A similar strategy followed is the pool-car forwarding. Now, a truck picks up the goods and transports them to the shipping origin point, where they are reloaded onto the rail boxcar. Finally, at the rail destination, the goods are unloaded and transferred back into the trucks for supply to the customers.
· Short-term storage – Some undesirable and bulky items or a few promotional or seasonal merchandise may be sent to temporary storage offsite or in a yard trailer. Later during shipment, they are directed to the cross-docking center. This approach is very advantageous to a space-limited warehouse, where warehouse handling may sometimes become very slow and tiresome.
The assumptions that are considered in the cross-docking problem in general, are as follows:
· All trucks are prepared to operate at time zero (initial time of operation)
· Receiving and shipping doors are present and are separate
· Inbound trucks must be unloaded entirely at the receiving door and then they must leave for the manufacturing unit for its next operation
· Outbound trucks must be loaded completely at the shipping door and after that, they must proceed to transfer the finished products to the customers
· There is a presence of temporary storage just before the shipping door
· Pre-emption is not permitted
· There is no restriction for capacity of temporary storage
· Sequence of the unloading products from inbound trucks is decided
· Sequence of the loading products to the outbound trucks is determined
· Functional time within the CDC and the time required for truck changeover are deemed constant and same for all items
· There is a particular due date for each outbound truck for leaving the CDC
· The following information is assumed to be known already in advance:
· Number of products from each kind of inbound and outbound trucks
· Loading times and unloading times regarding all kinds of products
· In-CDC transshipment time
· Times spent during changeover