4.1 Lean Logistics
4.1.4 Lean Warehousing: Cross Docking
Warehousing has four major tasks: receiving, storage, order picking, and distribu-tion. Among these four tasks, storage and order picking are the most costly.
Storage requires inventory holding (one of the eight kinds of wastes), and order picking needs a lot of labor work hours (which is mentioned as motion in different kinds of wastes). To eliminate these wastes and produce a lean warehouse, the cross-docking concept was developed. A cross dock is just like a warehouse in which only receiving and delivering freight is being done.
Shipments will be transferred directly from incoming trucks to outgoing ones without any long-term storage. These loads are delivered to receiving doors, sorted, consolidated with other products for each destination, and loaded onto outgoing trucks at shipping doors. The whole process is done in less than 24 hours in a typi-cal cross dock.
Companies such as American Freightways, Yellow Transport, and Old Dominion Freight Lines operate hundreds of cross docks in North America. Some retailers such as WalMart and Home Depot also operate cross docks.
Cross docks also function as a place to consolidate loads and thus reduce trans-portation costs. As illustrated inFigure 4.2, suppose two suppliers serve four custo-mers. Direct-shipment suppliers may undertake extra costs as a result of a less than truckload (LTL) for each customer. Using a cross dock as a consolidation center reduces the number of LTLs and sends more truckloads (TLs) to retailers, substan-tially reducing transportation costs.
Types of Cross Docking
Napolitano[16]classifies the different types of cross docks as follows.
G A manufacturing cross dock is used to receive and consolidate supplies.
G A distributor cross dock consolidates products from different suppliers and delivers them to customers.
G A transportation cross dock consolidating LTLs from different suppliers to reach eco-nomic shipments.
G A retail cross dock receives, sorts, and sends products to different retail stores.
Cross docks can also be divided based on assigned or unassigned information:
predistribution and postdistribution[17]. In a predistribution cross dock, the desti-nations are already determined and their orders are prepared by vendors for direct shipment. In this kind of cross dock, shipments that are already price tagged or labeled are transferred directly into outgoing trucks. In postdistribution operations, the cross dock must assign freights to each destination to make them ready for shipping by price tagging, labeling, and so on, which means higher labor costs and more floor space for the distributor.
Cross docks can also be classified based on the method of freight staging.
According to Yang et al. [18], there are single-stage, two-stage, and free-stage
LTL LTL LTL
LTL
LTL
LTL LTL
LTL Customer
Customer
Customer
Customer
Supplier #2 Supplier #1
(A)
Customer
Cross dock
Customer Customer Customer
Supplier #2 Supplier #1 LTL
LTL TL
TL TL
TL
(B)
Figure 4.2 Direct shipment versus cross docking: (A) direct shipment and (B) cross dock as a consolidation center.
methods. In a single-stage method, one staging lane is devoted to each receiving or shipping door, and shipments are placed into these staging lanes. In a two-stage method, the shipments are unloaded in receiving doors and put directly in a receiv-ing door’s stage lines. In the center of the cross dock, shipments are resorted and repacked into the staging lines of the shipping doors. In a free-staging cross dock, there are no lanes or queues in which freights are placed and pulled to shipping doors. Instead, near the receiving or shipping doors, freights are resorted and repacked.Figure 4.3depicts a two-stage cross dock[19].
Product Selection
Generally, products that can easily be handled with low variance and high volume are the most suitable for cross docking[17].
For supply and demand to be matched, demand for shipments must be certain or at least have low variance. If demand has high variance, then cross docking is not suitable.
As cross docking needs frequent shipments that force expenses to system, demand for shipments must be high enough to justify extra expenses.
Shipping
Sorting
Receiving
Figure 4.3 Two-stage cross-dock structure[19].
Cross-Dock Design
There are two important parameters in cross-dock design: size and shape. The first decision is the number of doors. Generally, doors are devoted to one of the two fol-lowing types of trailers[20]:
G Incoming (receiving), from which freight must be unloaded
G Outgoing (shipping), in which freight must be loaded
Typically, once the number of destinations of a cross dock is known, the number of outgoing doors needed is easily determined. The number of doors required for each destination depends on its freight flow. Destinations with a higher flow may need more than one door. The number of shipping doors thus equals the number of destinations the cross dock serves multiplied by their needed doors.
To determine the number of receiving doors needed, more issues must be addressed. In some retail cross docks, extra operations such as packaging, pricing, or labeling need the same number of doors in each side of the cross dock, with receiving doors devoted to one side and shipping doors to the other. For distribu-tors’ cross docks, which generally do no value-added processing and are just a place to consolidate freights, the number of receiving doors can be estimated by Little’s law: unloading mean time multiplied by trailer throughput[21]. Unloading is relatively easier than loading. “A good rule of thumb is that it takes twice as much work to load a trailer as it does to unload it”[20]. To achieve a smooth flow without bottlenecks, there could be either twice as many outgoing doors as incom-ing doors or more assigned workers to load each trailer.
The next important factor is cross-dock shape. According to Bartholdi and Gue [21], most cross docks are I shaped like a long rectangle, but there are also cross docks in other shapes such as an L (as in Yellow Transportation, Chicago Ridge, IL), a U (as in Consolidated Freightways, Portland, OR), a T (American Freightways, Atlanta, GA), an H (Central Freight, Dallas, TX), and an E. Bartholdi and Gue also showed that design has an important impact on cross-dock costs. I shapes were best for cross docks with fewer than 150 doors, T shapes for cross docks with 150 250 doors, and H shapes for more than 250 doors.
The shape of a cross dock also depends on many issues such as the shape of the land on which the cross dock will be placed, the patterns of freight flows, and the material-handling systems within the facility[20].
In addition to the shape of cross dock, the location of cross dock and how it is related to its connections have a considerable effect on its success.