Factors That Influence Cross Docking, Effective Cross Docking for Improving Distribution Efficiencies - Coursework Example

CROSS-DOCKING Author’s Name Class Name Professor’s Name School City and State Date Introduction Cross-docking is an action involving offloading of materials from an incoming carrier and loading it to an outgoing carrier, without them having to pass through a warehouse or in any other storage facility. Thus, Cross dock means that materials are moved from the arriving dock to the departing dock area. At its purest, there is no storage involved and the shipment doesn't touch the ground. In most cases where the goods are bulky, forklifts are used in transferring them from the inbound trucks or ship to the outbound ones. Cross docking is done at distribution docking terminals, usually with trucks and dock doors on the two sides. The two sides are the incoming and outgoing side, with a limited storage space (Apte and Viswanathan 2000, 291). The name ‘cross docking' describes the movement of materials across two docks, from inbound to the outbound transportation docks. This paper defines, describes the purpose of cross docking and the companies using them as well as gives the importance of cross docking. Dicussion Incoming carriers are given locations at the receiving docks terminal. Once the inbound carriages have been docked, their loads are either directly or indirectly transferred to the outbound transportation. The content is offloaded, sorted, and screened to identify their final destination (Yu and Egbelu 2008, 377). After that, the materials are then moved to the departures side of the cross dock using forklifts, conveyor belt and pallet truck among other means of transport to their respective departures dock. After the outgoing carriers has been loaded, the load can then be delivered to the customer. In some cases, goods are slightly damaged which results in losses to the shipper, typically the manufacturer, who is always responsible for ensuring the cross docking for thye customer is successful. Since there is no storage involved in the movement of these goods, there is no routing to the warehouse, no retrieval from the warehouse ranks and no rerouting back to the docking area thus, significantly saving in holding and handling inventory costs. By shifting from the traditional distribution centers (DCs) to cross-docking facilities, companies can increase inventory turns and reduce material handling and distribution costs. When cross docking is done effectively, it enables the businesses to cost save by eliminating the need for storage space and labor costs (Lee, Jung and Lee 2006, 247). Transportation companies prefer cross docking because the trucks have fuller loads and exact destination for each material, which saves them transportation cost. It also saves time since the shipper may adapt to new selling channels and market conditions, thus, can reach each customer faster. However, despite the fact that cross docking delivers significant financial and operational benefits to achieve efficient performance, firms must implement proper tracking, auditing, and compliance. Just like other data-driven supply chain activities, cross docking requires control and visibility of shipment from suppliers to the end client Type of Cross Docking 1. Continuous Cross Docking This type is considered simplest and fastest cross docking process. It involves the direct and immediate transfer of goods from an incoming to an outgoing carrier. This is mostly used for perishable goods that need to be transported to their destination in time to avoid losses in case they go bad while on transit (Morris et al. 2009, 2990). Additionally, products arriving late go through this type of docking to save time and enhance customer service. Upon the arrival of these goods, they are directly transferred to the outbound truck upon receipt, rather than being placed in inventory and picked orders. 2. Consolidation Arrangements The process involves integrating several small product loads into one truck. In some cases, goods in the storage facilities are put together with the inbound products and then the newly packed orders are loaded into departing trucks. In addition, part of the arriving materials may be taken to the stores temporarily instead of getting wholly cross docked. These operations help in enhancing customer service and win their satisfaction (Boysen 2010, 35). Here, seasonal merchandise, awkward or bulky items may be temporarily stored. 3. Deconsolidation Arrangements The exercise involves breaking down of large loads into smaller loads to ease transportation. The resulting loads are usually transported directly to the customer. Products Suitable For Cross Docking According to the survey and conducted in many cross docking terminals, the operators conclude that some goods are better suited for cross docking than others. For instance; Perishable items that need to be transported immediately Already inspected and proved items that do not require further inspection during receipt Staple goods for retail with a constant demand or low demand variance Items meant for promotion and products to be launched Pre-tagged, pre-ticketed and ready for sale products Factors That Influence Cross Docking The cost of inventory in transit Many transport companies considers cross docking to be more cost effective as it eliminates the inventory costs that would have been incurred in the case that the good was temporarily stored in the warehouse (Van, Valckenaers and Cattrysse, 839). Load complexity Products such as farm fresh product need a fast transportation to their final destination since most of them are perishable. To avoid time consumption at the storage facility, these products are mainly cross-docked to reduce chances of them going bad while on transit. Availability of storage space The unavailability of a storage space at the storage facility, can lead to inbound materials being directly loaded into the outbound trucks. Others are: Handling methods Transportation cost of the goods on transit Tracking of inventory in transit Customer and supplier geographical, especially if the client as many using branches Reasons For Cross Docking The first reason is to create a central place for sorting goods. After sorting, similar goods are put together and delivered to different destinations. The second reason is to blend several small products and load them to one carrier to save on the transportation cost. Finally, cross docking is done to disintegrate larger materials into smaller portions for shipping to ease the delivery process. Advantages of Cross Docking Eliminates costs incurred in inventory handling labor. Eliminates warehouse costs Helps in streamlining the supply chains from the original point to the final destination It saves time Reduced inventory handling risks The short storage time reduces the cost of inventory holding, thus, there is no need to retain safety stock Disadvantages Of Cross Docking. It requires a computerized logistics system May lead to product damages Potential partners may lack adequate storage capacities A proper transport fleet is required to operate Examples of Companies Using Cross Docking Successfully 1) Wal-matt Wal-matt is an American multi-national cooperation that operates the largest retail chains of discounts departments. It is considered third largest corporation it the world which is public. It launched the system of cross docking in the early 1980s. The system was supported by the parallel processor that eased the tracking down of their fleet’s movement to all their distribution stores and centers. They manage their orders, and stocks replenishment is made a success by use of a typical information system. The workers use magic wand linked to their terminals stations through a radio frequency network to keep track of inventories, deliveries, and backup merchandise stocks at their various stations. All these systems made the cross-docking strategy a success. It uses sub-stations where ingoing materials are sorted, put together, and put in the warehouse until the shipment is totally ready for delivery. 2) Bridge Logistics Bridge Logistics offers a wide range of cross docking services namely; manufacturing, distributors, retail, and transportation cross docking. In manufacturing cross docking, already purchased and inbound materials that are required by the manufacturer are received and then delivered to the clients. A distributor cross docking is process involves consolidating inbound products and delivering to the customer. Another cross docking service offered by Bridge Logistics is retail cross docking where, goods from several vedors are received, sorted and shipped per destination. It helps to reduce the transportation cost and create space in their stores. The last cross docking service is transportation cross dockingwhich involves combining of shipments from several different carriers in the less-than-truckload (LTL) and small package manufacturer to gain economies of scale. Other companies using cross-docking services are Ryder, Cisco, and Affiliated Warehouse Inc. Conclusion Cross docking is transferring materials from an incoming carrier and loading it to an outgoing carrier, without them having to pass through a warehouse or in any other storage facility. Cross docking provides a central site for goods to be sorted and combine similar goods so that they can be delivered to different destinations, blend several small products and load to one carrier to save on shipping cost. Cross docking is also done to disintegrate larger materials into smaller portions to ease delivery process to the customer. Examples of companies using cross docking successfully include Walmart and Bridge Logistics among others. References Apte, U.M. and Viswanathan, S., 2000. Effective cross docking for improving distribution efficiencies. International Journal of Logistics, 3(3), pp.291-302. Yu, W. and Egbelu, P.J., 2008. Scheduling of inbound and outbound trucks in cross docking systems with temporary storage. European Journal of Operational Research, 184(1), pp.377-396. Lee, Y.H., Jung, J.W. and Lee, K.M., 2006. Vehicle routing scheduling for cross-docking in the supply chain. Computers & Industrial Engineering,51(2), pp.247-256. Morris, G.M., Huey, R., Lindstrom, W., Sanner, M.F., Belew, R.K., Goodsell, D.S. and Olson, A.J., 2009. AutoDock4 and AutoDockTools4: Automated docking with selective receptor flexibility. Journal of computational chemistry, 30(16), pp.2785-2791. Boysen, N., 2010. Truck scheduling at zero-inventory cross docking terminals. Computers & Operations Research, 37(1), pp.32-41. Wen, M., Larsen, J., Clausen, J., Cordeau, J.F. and Laporte, G., 2009. Vehicle routing with cross-docking. Journal of the Operational Research Society, 60(12), pp.1708-1718. Boysen, N., Fliedner, M. and Scholl, A., 2010. Scheduling inbound and outbound trucks at cross docking terminals. OR spectrum, 32(1), pp.135-161. Van Belle, J., Valckenaers, P. and Cattrysse, D., 2012. Cross-docking: State of the art. Omega, 40(6), pp.827-846. Read More