BUS606: Operations and Supply Chain Management

The primary objective of any logistics system is to ensure high level of customer service, measured by product availability, on-time delivery, distribution in assortment and quantity requested, and, at the same time, using the least amount of company resources, whether in the form of costs and expenses or in the form of fixed assets and working capital. After all, we need to meet both customer needs for high level of service as that of shareholders who seek a return on invested capital.

The cross-docking technique offers a very important basic advantage: reducing or eliminating the need for product storage. The cross-docking is a distribution system in which the received goods in a Distribution Center is not stored as it has been traditionally performed in this sector but is labeled and then transferred to be loaded and distributed, being delivered to the customer immediately, or at least as soon as possible.

Boysen and Fliedner say that this logistics practice is mainly used in the execution of deliveries in urban centers, where the circulation of large vehicles is restricted in size and weight, preventing them from making deliveries. Such vehicles unload their products in a warehouse known as a cross-docking terminal. The products cross the warehouse on conveyor belts and/or in hand trolleys and then are loaded onto other vehicles, which will deliver them to their final destinations. If the goods are stored temporarily, it should be only for a short period of time. An exact limit is difficult to define, but usually less than 24 hours.

The incoming trucks go directly to a dock or wait in line until they are assigned to an unloading dock. As soon as the truck reaches the receiving dock, its cargo (e.g., pallets, containers, or boxes) is discharged and the final destination of the delivering truck is identified. The products are then transported to another internal door by some material handling device, such as a worker operating a cart or a conveyor belt system. There, the goods are loaded into an exit truck that will send them to the final destination, thus accomplishing the shipping order. Once an inlet truck is completely unloaded or an exit truck is fully loaded, the truck releases the dock to the entrance of another truck.

In order to have an effective cross-docking operation some requirements need to be met and this depends on the attention given to aspects such as partnership between company members, reliability in the supply scheme, effective communication within the organization and with the partners, qualified personnel (manpower), and strategic management.

According to Buijs et al., three elements are recurrent in the cross-docking strategy: the basic operations, the objectives to be achieved, and the number of available docks, the latter being relevant because, in many cases, the terminal has to handle the unloading of several cargoes simultaneously, which allows for a shipping of goods more agile, and with the cargoes better consolidated.

In this context, logistic costs (storage costs, transport costs, and dispatch costs) are an important part of the current research. Part of the optimization in transportation costs involves a dock assignment problem, which includes dock assignment for the arriving trucks and also for the outbound trucks that load the finished products and deliver them to the final customers. A good programming of the docks, their dimensioning, and the definition of the external space of a Distribution Center assist the managers in the decision making regarding the unloading process, reducing the waiting time of the trucks in the queue, reducing costs, and offering a high service level to the end customer.

The cross-docking terminal analysis can be accomplished, on the one hand, with an appropriate mathematical queue model. Through it, one can analytically define probabilistic processes intended to quantify performance measures, expressing productivity/operability parameters and resulting costs. On the other hand, the cross-dock terminal analysis can be accomplished with a simulation model.

Van Belle et al. and Agustina et al. present an extensive review of the existing literature about cross-docking modeling. The discussed papers are classified based on the problem type that is tackled (ranging from more strategic or tactical, to more operational problems). None of these revisions focus specifically on the determination of the number of dock doors intended to minimize the queue size and the waiting times of the trucks that supply the cross-docking facility.

Thus, this study aims to contribute to the operational analysis of the cross-docking terminal framework, specifically focusing the inbound truck behavioral pattern, with two alternative analytical modeling approaches. With this, the objective is to keep the serving trucks staying as short as possible in the unloading dock. So, their terminal managers will have more agility in making decisions regarding dock utilization, with reduced costs, improved service levels, and ensuring end customer satisfaction. This study also contributes to the optimal sizing of the terminal unloading docks, determining the number of doors according to a previous modeling capacity analysis.