Role of Cross-Docking in the Distribution System - Literature review Example

ROLE OF CROSS-DOCKING IN THE DISTRIBUTION SYSTEM Student's name Code & Course Professor's name University City Date Introduction In the recent past, distribution systems have been complicated due to the synchronization of production, storage, and transportation units. The synchronization of these aspects was necessary as evidenced by the rising demand for handling items and operations activities in a more effective and efficient manner. Furthermore, the gap between processing and distribution in the modern industry requires useful and appropriate distribution methods. Regarding this, cross-docking has been widely used in the distribution system both as a method for improving customer services and reducing the general distribution costs. Consequently, most companies are regularly formulating strategies that would enable them to reduce logistic costs while maintaining and increasing profitability. Cross-docking has been adopted and acclaimed as an effective distribution strategy that can be put in place to achieve this purpose (Mohtashami et al. 2015, p. 30). This paper defines cross-docking and assesses the roles that it plays in the distribution process. Based on this definition and roles, its application will be reflected in two different companies. Discussion Cross-docking refers to a logistics procedure wherein goods are distributed directly to the customers from the manufacturing plant (Mohtashami et al. 2015, p. 31). Mostly, it is defined as an integrated process that provides customers with a direct link to the supplier. This, therefore, would mean in a distribution system, cross-docking occurs in a docking terminal. Usually, the cross-docking process involves a connection between outbound and inbound doors that are established in an area with minimal space, process pinpointed by Buijs et al. (2014, p. 593-608). The definition that develops from this kind of structural orientation is that cross-docking is the process whereby goods are received from an inbound dock and directly transported for consumer access through an outbound dock. Trailers and trucks are involved in this transportation process in which they transport products which are later unloaded, screened and sorted at the end destination. Cross-docking is, therefore, necessary for the distribution system as will be discussed. To start with, cross-docking helps manufacturers and distributors in the supply chain system to sort and screen products. It is a hub that makes it possible for the manufacturing and distribution teams to sort, screen and combine various products for distribution to various destinations. The processes of sorting and screening products determine the kind of responses that customers will provide at the end destination. The speed of delivery and company productivity being the objectives of customers and companies, products that have undergone this process are likely to move them closer to meeting these objectives. On this, cross-docking can also enable a company to enhance its competitive advantage. Screening and sorting can be a difficult process to conduct if such a strategy is not incorporated in the distribution system. Kulwiec (2015, p. 30) propounds that efficiency in product handling and shipping can only be achieved when products are adequately screened and sorted. By enacting the cross-docking strategy, consolidation arrangements are easily conducted in a manner that boosts transportation efficiency. To save shipping costs from the point of creation to the customers at the other end, product loads are combined into smaller units that are easy to transport. The customer gets access to these products at a much faster rate when large products are broken into smaller ones, a process which is referred to as "deconsolidation arrangements" in the business sector. Of importance is to note that the effectiveness of a distribution system is increased to a greater notch with the implementation of cross-docking (Kreng & Chen, 2015, p. 229). Cross-docking facilitates the movement of products from one point to another, and as such, it is a collaborative distribution strategy. Inventory management practices are can easily be monitored and compared therefore making it easier to draw operation and distribution plans. Cross-docking propagates the achievement of such goals as it not only increases capacity for competitive advantages but also provides an effective response time to various customers. A highly efficient response time to customers would mean that their preferences and inclinations are met on time. This objective is even made easy to achieve as cross-docking integrates the use of information technology, an aspect which is compulsory in any distribution system. Kreng & Chen (2015, p. 233) argues that whether the strategy is fully implemented or not, the main objective should be to minimize shipping costs as much as possible. Inventory levels are appropriately managed as a cross-docking function to promote the intensification of throughputs at particular points of the distribution process. This is achieved by loading products at their manufacturing points using the outbound dock and unloading them in the delivery end by use of the inbound dock. However, the process of inbound and outbound transportation requires the incorporation of several other aspects to be complete. According to Kulwiec (2015, p. 31), order processing, automated material handling and rapport between the management team in the supply chain are some of the aspects that must be considered. Profitable and effective cross-docking will require information processing and sharing, productivity availability and quality to run smoothly. In its purest form, cross-docking enhance inventory savings as no storage parts are included in the distribution system (Kreng & Chen, 2015, p. 239). The costly processes of re-routing to the dock, regular rack retrievals, and storage routing are minimized significantly and as such the costs of handling and holding the inventory are completely disregarded. In a distribution system, cross-docking establishes a link between supply and demand (Kulwiec, 2015, p. 29). This link neutralizes the market pressure which might affect the performance in a supply chain. Though it is recommended that lower inventories are achieved through increased throughputs, it is also important to consider operating in a unified cross-docking system to reduce operational costs. The distribution process cannot be complete without the process of picking, labeling, packing and unpacking. As such, distributors have implemented the docking process that can facilitate the transportation of case deliveries in any quantity as fast as they are required. Therefore cross-docking makes it easier to conduct deliveries to several distribution centers, an operation which would be difficult to develop otherwise. According to Kreng & Chen (2015, p. 241), cross-docking makes it easier to monitor new and older inventories. As Gümüş & Bookbinder (2014, p. 199-228) have mentioned, it would be impossible to monitor them as they are prone to accumulation. More often than note, a well-established company would acquire direct customers and retailers who register a regular order placements that require shipping of significant amounts of products. This way, cross-docking enables the partners involved to set and distribute date sensitive products through the use of inventories. This process is made effective staging the product orders on a conveyor thus shipping them at the most convenient time possible. In this manner, cross-docking enables distributors to hold products securely until they turn into current customer orders. Companies which have successfully used Cross-Docking Sear Logistics Services This company located Hoffman Estates and managed by Roebuck & Co. Pagonis is one of the leading provider of logistic services in the US (Kulwiec, 2015, p. 28). The Company handles a wide array of products that range from refrigerators to fashion items to bolts and nuts and lawn tractors. The company management has effectively implemented cross-docking services within its distribution system due to the varying amounts of such products that are determined by their diversity and seasonality. In this company, the major part of the cross-docking process starts with product arrival monitoring, time and space verification, and materials for inbound and outbound loading. This service has made it possible for the company to effectively manage over ten distribution centers that ship appliances in the United States. Additionally, cross-docking has made it possible for the company to operate over seven distribution merchandises (Kulwiec, 2015, p. 31). Cross-docking facilitates sales event needs and stores replenishment through these distribution centers and merchandises. In this Company, the product category is what determines the extent to which cross-docking should be applied in the distribution system. It is shown that the company cross-docks between 60-70 percent of the appliances that are shipped (Kulwiec, 2015, p. 35). Typically, trucks of merchandise resulting from vendors are sent to distribution centers in the form of pallets. Apte& Viswanathan (2014, p. 291-302) asserts thatcase deliveries are made easy to transport by breaking down pallet load to significant units which are then packed and transported. Wal-Mart This is a retailing multinational corporation that is located in Bentonville, US. The management has more than once the company's rise to prominence with the use of cross-docking services. The cross-docking operations account for the transportation of over 85% of its merchandise (Ladier & Alpan, 2016, p. 145). To keep the suppliers informed about trends and sales activities, the company uses a part of the docking system to initiate a communication system which is encrypted as a Point of Sale (POS). Ladier & Alpine, 2016, p. 162) unveils that cross-docking has enabled the company to increase the quality of customer services and ensure on-time delivery of products since they are stored for less than 48 hours. Cross-docking has propelled the company towards attaining significant reductions in safety and inventory stocks. The shipping of full-track quantities has enabled the company to attain strong purchasing economies thus making operations efficient. The customer is given priority as the company's logistics practices are always geared towards reducing transportation costs (Ladier & Alpan, 2016, p. 147). Conclusion There is the need for companies to adopt and implement the use of cross-docking in their distribution system in the changing globalized environment. By so doing, inventories are effectively managed, and logistics costs are reduced to a significant level. Based on the literature and the two companies reflected, management systems, automated material handling, and order processing are the central processes and procedures that cannot be effectively met in its absence. According to Javanmard et al. (2014, p. 1709-1720),cross-docking is a value adding process that gives support to on-time deliveries and customer satisfaction. In this manner, therefore, the roles it plays in the distribution system cannot be underestimated. WORD TOTAL= 1568 Reference List Apte, U.M. and Viswanathan, S., 2014. Effective cross docking for improving distribution efficiencies. International Journal of Logistics, 3(3), pp.291-302. Buijs, P., Vis, I.F. and Carlo, H.J., 2014. Synchronization in cross-docking networks: A research classification and framework. European Journal of Operational Research, 239(3), pp.593-608. Gümüş, M. and Bookbinder, J.H., 2014. Cross‐docking and its implications in location‐distribution systems. Journal of Business Logistics, 25(2), pp.199-228. Javanmard, S., Vahdani, B. and Tavakkoli-Moghaddam, R., 2014. Solving a multi-product distribution planning problem in cross docking networks: An imperialist competitive algorithm. The International Journal of Advanced Manufacturing Technology, 70(9-12), pp.1709-1720. Kulwiec, R., 2015. Crossdocking as a supply chain strategy. Target, 20(3), pp.28-35. Kreng, V.B. and Chen, F.T., 2015. The benefits of a cross-docking delivery strategy: a supply chain collaboration approach. Production Planning and Control, 19(3), pp.229-241. Ladier, A.L. and Alpan, G., 2016. Cross-docking operations: Current research versus industry practice. Omega, 62, pp.145-162. Mohtashami, A., Tavana, M., Santos-Arteaga, F.J. and Fallahian-Najafabadi, A., 2015. A novel multi-objective meta-heuristic model for solving cross-docking scheduling problems. Applied Soft Computing, 31, pp.30-47. Read More