Crossdocking

1. Crossdocking

2. Literature and interesting Web sites • Lecture material • Bartholdi & Hackman, Chpt. 11 • Kevin Gue, “Crossdocking: Just-In-Time for Distribution”, Tech. Report, Graduate School of Business & Public Policy, Naval Postgraduate School, Monterey, CA, May 2001 • J. Bartholdi and K. Gue, “The Best Shape for a Crossdock”, working paper • K. Gue, “The Effects of Trailer Scheduling on the Layout of Freight Terminals”, Transportation Science, 33:4, pg. 419-428, November, 1999. • An interesting site: • http://web.nps.navy.mil/~krgue/Crossdocking/crossdocking.html

3. The driving idea behind crossdocking • Crossdocking seeks to eliminate the expensive functions of inventory holding and order picking from modern distribution centers by taking advantage of the information system infrastructure in modern supply chains. • Hence, at a crossdock, incoming material is already assigned to a destination, and therefore, the only required functions are consolidation and shipping. • In this way, material is staged at the facility for less than 24 hours. • => Just-In-Time for distribution

4. Major requirements for justifying and effectively deploying a crossdock operation • Significant and steady product flow • easy to handle material / unit-loads • Good and reliable information flow across the entire supply chain • pre-distribution crossdocking: the customer is assigned before the shipment leaves the vendor, so it arrives to the crossdock bagged and tagged for transfer. • post-distribution crossdocking: the crossdock itself allocates material to its stores.

5. Examples • Home Depot operates a pre-distribution crossdock in Philadelphia serving more than 100 stores in the Northeast area. • Wal-Mart uses • traditional warehousing for staple stock - i.e., items that customers are expected to find in the same place in every Wal-Mart (e.g., toothpaste, shampoo, etc.) • crossdocking for direct ship - i.e., items that Wal-Mart buyers have gotten a great deal on and are pushing out to the stores • Costco uses pallet-based post-distribution crossdocking • Computer firms like Dell consolidate the major computer components in “merge in transit” centers. • JIT manufacturers consolidate inbound supplies in a nearby warehouse • LTL and package carriers (UPS, FedEx) crossdock to consolidate freight

6. Crossdock Operations Strip doors: doors where full trailers are parked and unloaded. Any incoming trailer can be unloaded to any strip door. Stack doors: doors where empty trailers are put to collect freight for specific destinations. Each stack door is permanently assigned to a distinct destination. • Typical material handling modes: • manual carts for smaller items • pallet jacks and forklifts for pallet loads • cart draglines (reduce walking time but impede forklift travel)

7. A queueing model for the crossdock operations • Customers: Inbound trailers • Servers: Strip doors • Buffering Queue: Parking lot • Processing times • customer-dependent: freight mix • server-dependent: distance of the strip door under consideration from the stack doors serving the destinations of the trailer freight

8. Optimizing the crossdock performance • The major operational cost for crossdock is the labor cost. • Hence, the system performance is optimized by seeking to maximize the throughput of the crossdock operations by establishing an efficient freight flow. • Factors affecting the freight flow: • Long term decisions: • Number of doors and shape of the building • Employed material handling systems • parking facilities • Medium term decisions: • Crossdock layout, i.e., the characterization of the various doors as strip or stack doors, and the assignment of specific destinations to the stack doors • Short term decisions • Inbound Trailer Scheduling

9. The number of doors and the parking lot size • Number of stack doors:determined by the volume of freight moved to each customer, and any potential delivery schedules • Number of strip doors: since trailer unloading is a faster job than trailer loading, a common rule of thumb is to have twice as many stack doors as strip doors, so that you balance the incoming with the outgoing flow. • In general the larger the number of doors in the crossdock, the larger the distances that must be traveled. • The parking lot should provide parking space for two trailers per door, so any flow surges can be accommodated without considerable problems.

10. Corners are bad! Specifically: • Internal corners take away door locations (about 8 doors per corner) • External corners take away storage space in front of the door (w/2 doors’ worth of floor space) • On the other hand, a building shape that minimizes its corners increases • the travel distances • the traffic congestion in front of the most centrally located (and therefore, • the best) doors • Some characterizations of the crossdock building shapes: • diameter: max door-to-door distance • centrality: the ratio of the obtained number of extra doors over the resulting diameter increase for a symmetric expansion of the building by two doors at each “end” of it. • Suggested building shapes: • I for small crossdocks (up to 150 doors) • T for medium size crossdocks (between 150-250 doors) • X for the largest crossdocks (above 250 doors) • Frequently, the building shape is determined by other constraints, e.g., • available land, an existing building, etc. The shape of the crossdock building

11. Crossdock layout • In general, centrally located doors should be reserved for the uloading activity and for destination with large outgoing flows. • On the other hand, if the freight on each inbound trailer is destined to a small and stable set of customers, then the facility can be decongested by establishing distinct hubs serving clusters of destinations that tend to have their freight on the same incoming trailers. • Two extensively used heuristics are: • the block heuristic: Assign first the unloading activity to the best doors (i.e. the doors having the smallest average distances to all other doors). Subsequently, assign the remaining doors to outbound destinations, prioritizing them in decreasing order of their flow intensities • the alternating heuristic: The door assignment alternates between a strip door and a stack door to the destination with the next highest flow • => The alternating heuristic produces solutions that are typically 10% better than the solutions produced by the block heuristic.

12. Trailer Scheduling • How should we pick the next inbound trailer to be processed at a free strip door? • If the freight mix tends to be uniform across all inbound trailers, then a simple rule like FIFO will perform well. • Otherwise, the selected trailer should be the one that will have the smallest processing time w.r.t. the considered strip door, among those currently waiting in the parking lot.