Synchronizing local and network-wide cross-docking operations – An
explorative research
Bryan Huzen
University of Groningen
Synchronizing local and network-wide cross-docking operations – An explorative research
Master Thesis Bryan Huzen S1699962
Rijksuniversiteit Groningen Faculty of Economics and Business
MSc. Business Administration – Operations & Supply Chains
First supervisor and assessor: Prof. Dr. Ir. J.C. Wortmann Second supervisor: P. Buijs
Second assessor: Dr. N.B. Szirbik
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Abstract
Cross-docking is a logistics strategy in which freight from inbound vehicles is loaded into outbound vehicles, with little or no storage in between and with a minimum dwell time in between. At the cross dock facility, shipments are consolidated to full truckloads and economies of transportation are realized. Cross docks often operate within a network of transportation companies and other cross docks.
This MSc Thesis reviews the literature on local and network-wide cross-docking decision problems. The thesis first of all identifies a void in the literature, because literature is either focused on network problems or on cross docking problems, but not on both. The thesis tried to fill this gap by providing an overview of possible combinations of local and network-wide decision problems. This explorative research provides the view of cross dock companies with regard to solving local and network-wide decision problems in a synchronized manner. Information and insights are gathered by semi-structured interviews conducted with the managers who were actively engaged with the decision-making of the operations within the cross dock and the coordination with partners in the cross-docking network.
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Preface
This report is my graduation thesis that I performed for my study MSc Operations and Supply Chain. I have investigated combinations of local cross dock decision problems and network-wide decision problems which are synchronized in practice. Interviews were conducted at 9 cross-docking organizations throughout the Netherlands. They provided me with essential insights which were very helpful in executing this research. The organizations are not mentioned by name, via this way I want to thank them all for their inputs to this research.
From the University of Groningen a special thanks goes to Prof. Dr. Ir. J.C. Wortmann for his guidance during this process. Secondly, a special thanks goes to P. Buijs for his feedback, assistance and guidance during this process. Thirdly, I would like to thank my second supervisor Dr. N.B. Szirbik for his feedback and for assessing my report.
At last, I would like to thank everybody else who was not mentioned by name but supported me during this period. I want to thank them for their advice and support when writing my thesis.
Bryan Huzen
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Content
Abstract ... I Preface ... II Content ... III 1. Introduction ... 1 2. Research Question ... 3 3. Literature Research ... 4 3.1 Decision Problems... 5 3.2 Network Types ... 6 Methodology ... 84.1 Explorative Qualitative Research ... 8
4.2 Literature Research ... 8
4.3 Case Company Selection ... 8
4.4 Interview ... 9
4.5 Interview Development ... 9
4.6 Data Analysis ... 10
5. Analysis ... 12
5.1 Introduction ... 12
5.2 Coordination at the cross-dock ... 12
5.3 Coordination in the network ... 14
5.4 Coordination for synchronized cross-docking operations ... 16
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1.
Introduction
Cross-docking is a transhipment activity in which freight is unloaded from inbound vehicles and
directly loaded into outbound vehicles, with little or no storage in between (Van Belle et al., 2012). The benefits of cross-docking is explained by a comparison between cross-dock and traditional warehouse operations. Wen et al. (2009) stated: “Shipments typically spend less than 24 hours at the cross-dock, sometimes less than an hour. This way, cross-docking not only provides good customer service but also yields substantial advantages over traditional warehousing: reduction in inventory investment, storage space, handling cost and order-cycle time, as well as faster inventory turnover and accelerated cash flow”. Another benefit of cross-docking is the reduction of transportation costs due to consolidation of shipments at the cross dock facility (Stephan & Boysen, 2011; Apte & Viswanathan, 2000; Boysen & Fliedner, 2010). The cross-docking network is the logistics network in which the cross docks operates, such as for instance a partnership with logistic service providers. This collaboration between cross dock companies is a long-term relationship, with the intention to plan and execute logistics services toward common goals. Collaboration can lead to achieving more benefits than operating independently (Simatupang and Sridharan 2005; Sheu et al. 2006). Synchronizing local and network-wide cross-docking operations is the collaboration between logistic companies in which local cross-docking operations and network-wide operations are aligned between the companies to improve service levels and to increase revenue.
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perspective and a network-wide perspective. This is due to the influence of a solution for the local decision problem on the solution of the network decision problem and vice versa. To recapitulate, solving the local cross-docking decision problems influences network-wide decisions. There is a limited amount of literature which discusses synchronized approaches. This led to the following main objective of this thesis:
The main objective of this research is to provide an overview into the combinations of local cross dock decision problems and network-wide decision problems which are synchronized in practice.
This thesis about cross-docking is an extension on the research of Buijs et al. (2013), which shows that local and network-wide cross-docking decision making are addressed distinctly in academic literature. In contrast, this thesis research explores which local cross-docking decision problems are solved in a synchronized manner with network decision problems in practice. This thesis shows that cross-docking companies are not solving any of the suggested decision problem combinations in practice in a synchronized manner. However, the companies believe that solving certain decision problems in a synchronized manner increases their profitability and improve the quality of their services. A remarkable outcome of this thesis is the difficulties the companies encounter with redistributing the risks, costs and benefits obtained during the cooperation among the cross-docking partners.
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2.
Research Question
This explorative study gives an overview of the combinations of decision problems, which are solved by cross docks and cross-docking networks in practice in a synchronized manner. This thesis builds on (and extends) the research in Buijs et al. (2013). The following research question is answered in this thesis.
Which decision problems at the cross dock and the cross-docking network are solved in practice in a synchronized manner?
Answering this research question contributes to literature by displaying important aspects related to developing an approach for synchronizing of the local and network-wide decision problems.
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3.
Literature Research
In this chapter the existing literature is reviewed to provide insight into research that has been done on the subject cross-docking. A significant number of researches have been done on the individual decision problems in a cross dock, as well as the individual decision problems in a network, as the paper of Buijs et al. (2013) shows. Nevertheless, these individual decision problems are not investigated when interacting with each other. This is supported by the statement of Cruijssen et al. (2007), “The literature on horizontal logistics cooperation is scarce”. First of all, cross-docking and cross dock network are discussed. Secondly, based on the paper of Buijs et al. (2013), the relevant individual decision problems for this thesis and the classes these decision problems are divided into, are discussed. Hereafter, the distinctions between the network types are discussed to provide a theoretical base. The differences between the network types could influences the outcomes with regard to the research question.
A brief explanation about cross docks, cross dock network and individual decision problems follows. A cross dock is a consolidation point in a distribution network, where multiple smaller freights can merged to full-truck-loads (FTL) in order to realize economies in transportation (Boysen & Fliedner, 2009). A cross dock operator has to deal with the individual decision problems within the cross dock and the cross-docking network when performing the coordination of the cross dock. We refer to the papers of Van Belle et al. (2012) and Buijs et al. (2013) for an in-depth overview and discussion of these individual decision problems. The individual decision problems which are of interest due to the possible synchronized approach in practice between the local cross dock and the network cross-docking operations are discussed below, based on the paper of Buijs et al (2013). The cross-cross-docking
network is the logistics network in which the cross docks operates, such as for instance a partnership
with logistic service providers. The network-wide decision problems influence operational decisions in the cross dock.
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shows only one article which provides an insight into the relation between the cross dock decision problems and the cross-docking network decision problems (red arrow). This article of Wen et al. (2009) is discussed in the section below.
3.1 Decision Problems
First of all, the paper of Wen et al. (2009) addresses a combination between the classes cross dock scheduling and the network scheduling. According to Wen et al. (2009), the decision problems which should be solved in a synchronized manner, are the shipment to outbound trailer assignment from the cross dock scheduling class, combined with collection and delivery vehicle routing from the network scheduling class. The paper of Buijs et al. (2013) defines collection and delivery vehicle
routing as, determining vehicle routes to pickup and deliver shipments. This means that a company
picks up shipments and transports them to the cross dock where these shipments are consolidated. Hereafter, the shipments are delivered at the corresponding customer. Wen et al. (2009) stated about this: “Therefore, the problem involves not only vehicle route design, but also a consolidation decision at the cross-dock”. Thus, assigning shipments to outbound trailers influences the routing of the collection and delivery vehicle. This is also the case vice versa, in which the routing influences the shipments assignment to outbound trailer. This shows the importance of the merged problem solving to achieve an efficient cross dock operation. Thus, the more precise the alignment of the assignment of shipments to outbound trailer and collection and delivery routes between the cross dock companies is, the more efficient the planning of the vehicle routes. This means that
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consolidating the shipments and aligning the vehicle routes of the entire network, leads to fuller trucks loads and shorter vehicle routes.
Secondly, we discuss the combination of workforce capacity planning and capacity planning for
network routes (CPNR). Workforce planning is classified to the mid-term planning in the cross dock
planning class. The CPNR is classified to the class network planning and is also a mid-term planning. CPNR determines which of the possible itineraries will be used to provide transport services and allocating capacity to each of those services. Workforce capacity planning is concerned with determining the appropriate workforce to efficiently handle all incoming freight within the available time. The fluctuations in the CPNR influence the workforce capacity planning, due to the fact that an increase or decrease of capacity on the itineraries require a deviation in the workforce planning, to be able to efficiently handle the freight. This shows the influence of the decision made which are related to the planning of the workforce and the CPNR. We refer to the paper of Musa et al. (2010) which provides a method for minimizing transportation cost in the network. They developed an algorithm with regard to CPNR decision.
Thirdly, we discuss the combination of shipment to outbound trailer assignment, shipment to
destination assignment and CPNR. The assignment of shipments to outbound trailer is classified to
the cross dock scheduling class. The assignment of shipments to destinations is classified to the network planning class, just as CPNR. Some logistic service providers receive inbound shipments which are not yet assigned to a specific outbound trailer. The cross dock planner can then make a consolidation decision with regard to these shipments and is able to assign them to an outbound trailer. In addition, some shipments do not have a known destination prior to the arrival at the cross dock facility and due to interchangeability of these products an additional opportunity for consolidation occurs. This is often the case for cross-docking networks in a retail setting where each retailer demands a certain range of products. The planner can decide to consolidate the shipment with shipments which are sent to their cross dock partner. The cross dock partner will deliver the shipment to the delivery address when this information is received from the shipper. To conclude, the destination assignment to a shipment influences the outbound trailer assignment and the unknown destination of the shipment provides an opportunity for consolidation but is restricted by the capacity planning for the network routes.
3.2 Network Types
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Methodology
4.1 Explorative Qualitative Research
Explorative research on this subject is needed since there is a limited amount of literature available and research been done into the matter of synchronizing the local and network-wide operations. The decision for a qualitative research instead of a quantitative research is based upon the idea to explorer the overall synchronized approach of companies in practice. Cassell et al. (2006) mention that using a qualitative method, such as a semi-structured interview, enables the researcher to analyse a complex set of relationships and connections. Quantitative research provides a detailed understanding of the synchronized approaches. An interview gives the opportunity for receiving specific information due to the opportunity for a discussion on the subject and approaches. Stock and Boyer (2009) stated: “Analysis of qualitative data (i.e. unstructured data that are not appropriately reduced to numbers) requires sensitivity to both detail and context”. The down-side of this approach is that we are not able to perform a statistical generalization of the results and insights of the cross docks. Nevertheless, the thesis performs an analytical generalization of the results.
4.2 Literature Research
The literature research is conducted to provide an academic base for this research. Based on the framework of Buijs et al. (2013) we conducted a research into the combinations of the decision problems which were linked to the cross dock classes and the decision problems which were linked to the network classes. The conducted literature research of Buijs et al. (2013) showed that only the paper of Wen et al. (2009) provides an insight into a combination between these classes. Hence, the focus of this literature research was cross-docking, individual decision problems related to the combinations of the local and network-wide operations. Besides this, also the network types were discussed to provide a better understanding of differences between the companies which may explain the different outcomes related to the research question.
4.3 Case Company Selection
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• Case 1. Medium size organization which cooperates in a small size public cross-docking network with case 3.
• Case 2. Large size organization which operates in a large size public cross-docking network. • Case 3. Small size organization which cooperates in a small size public cross-docking network
with case 1.
• Case 4. Large size organization which operates in a large size private cross-docking network, cross-docking operations are limited.
• Case 5. Medium size organization which cooperates in a medium size public cross-docking network with case 7.
• Case 6. Large size organization which operates in a large size private cross-docking network. • Case 7. Small size organization which cooperates in a medium size public cross-docking
network with case 5.
• Case 8. Large size organization which operates in a small size public cross-docking network. • Case 9. Large size organization which operates in a large size private cross-docking network.
4.4 Interview
Multiple organizations in the Netherlands that apply cross-docking were contacted by e-mail to obtain their agreement to participate in this research. A distinction was made between organizations which operate in a public network or private network, as discussed in the literature research. The reason for this distinction was the assumption that logistic service providers within the different network types have different attitude towards operating in a network.
When these organizations showed their willingness to participate in this research, a brief telephone interview was conducted to identify the most suitable participants at each of the organizations. Hereafter, visits to the organizations sites were made to conduct the semi-structured interviews with the managers which were actively engaged with the decision-making of the operations within the cross dock and the coordination with partners in the cross-docking network. The interview was taped to provide the researcher the opportunity to focus on the topics which are discussed and to ensure no relevant information was lost. During these visits there was also the opportunity for the researcher to view the cross dock facility from the inside to gain a better understanding of the activities.
4.5 Interview Development
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according to the overview of Buijs et al. (2013) the only paper addressing the synchronization of local and network-wide decision problems. This is to confine the subjects and to reduce the length of the interview. The length of the interview was designed to not exceed 1.5 hour, because this reduced the risk of organizations which would be reluctant to cooperate. The interview protocol also briefly discussed the decision problems which were probably not solved in a synchronized manner. This is to provide the researcher an overview of the operations and decision problems within the organization and to ensure that if something remarkable is observed, this will be noticed. Since the participants are of Dutch origin, the interviews were written and conducted in Dutch.
First of all, a protocol was developed (appendix A), to provide a basis for the interview and to ensure that the desired data was gathered. The interview protocol is leading the conversation, but during the conversation certain questions will arise which are not mentioned in the interview protocol. This is due to the fact that certain specific decisions and operations within the organizations may require further research. Besides the protocol, we developed a checklist to ensure that all the topics were discussed. The protocol was tested by conducting a pilot-interview.
The structure of the interview is as follows. First, the participants are ensured that the information provided by them will be kept confidential. Hereafter, the goal and the scientific relevance of the research is explained. Thirdly, some general questions about the participant and the organization are asked, for example questions concerning the size of the cross dock facility, how day-to-day operations take place and the network they operate in. Hereafter, the individual decision problems related to the possible combinations are discussed, to provide data which shows that practitioners have or have not a synchronized approach regarding local and network-wide decision-making. Finally, the participants are provided an opportunity to suggest topics, related to this research, which are of importance according to them.
4.6 Data Analysis
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5.
Analysis
5.1 Introduction
This section contains the analysis of this research. Prior literature proposes numerous methods to support decisions related to the local or network-wide coordination of cross-docking operations (Buijs et al. 2013; Van Belle et al. 2012). In the analysis we first consider five important local decision problems regarding local cross-dock coordination and discuss how they are addressed in practice. Next we do the same for the important network coordination decision problems. All the provided examples are based on statements and examples from the interviewees.
We observed that internal cross-dock operations are executed in a similar fashion throughout the cases. In short, the internal cross-dock operations are executed as follows. The inbound trailer is unloaded and the shipments are put in a staging area. During the arrival of inbound trailers at the cross dock, the planning department develops the local delivery vehicle routes. This leads to a loading sequence of shipments into the outbound trailers. When the majority of the inbound trailers are unloaded the loading of the outbound trailers will start. These processes are controlled and coordinated to establish an efficient cross-docking operation. Next, we discuss decision problems related to this local coordination which are addressed in the cases. Hereafter, we discuss the decision problems related to the network coordination. Finally, we discuss the decision problems related to the simultaneous coordination of the local and network-wide cross-docking operations.
5.2 Coordination at the cross-dock
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the internal travel distance of the shipments. However, cross docks do have fixed strip and stack dock doors for the outbound and inbound shuttle between the cross docks in the network. The cross docks send shipments for a particular region in the Netherlands to the other cross dock with the shuttle service between the cross docks in the network. These trailers are therefore assignment to a dock door which is closely located to the staging area of interest to minimize the internal travel distance.
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unloaded and when each individual outbound trailer is loaded is of significant importance to them. The further the shipment has to travel to the next hub the higher the priority for loading this trailer and therefore the trailer in which the shipment is brought to the cross dock is scheduled to be unloaded first. Thus, scheduling of the inbound and outbound trailers is of importance to the cross docks which have restricted amount of time to load shuttle services to ensure the shipments arrive on time at the next cross dock facility.
Fourthly, we discuss the staging areas in the cross dock facilities. The cases make use of fixed staging areas. This means that the staging area is for a certain region (e.g., a collection of postcodes). During the unloading of inbound trailers most cases do not know in which outbound trailer the shipment needs to be loaded, cause the planning department is still processing the shipments and consolidating and assigning them to the delivery vehicle routes. Therefore, the shipments are first staged at the area for a certain region. This minimizes searching for shipments when loading the trailers. The areas are assigned to a certain location in the cross dock to minimize the internal travel distance. Thus, staging areas for regions which comprise a relatively large part of the volume will be located at the most efficient place (e.g., at the centre of an I-shaped cross dock). The staging area for regions which receives a relatively small part of the total volume is located at a less convenient location in the cross dock (e.g., near the corner of a cross-dock). The lay-out of these staging areasin the cross dock is evaluated and modified regularly to ensure the lay-out is still efficient and accommodate the cross dock in its needs.
Finally, we discuss the workforce capacity planning of the cross docks. The cases develop their workforce capacity planning based upon the expected volume of shipments that the cross docks has to process. These expectations are based upon historical data and communication with large customers which have significant influence on the volume. Thus with the aid of this information the workforce planning is developed. This decision problem will be discussed in relation to the cross-docking network in the section “Coordination for synchronized cross-cross-docking operations”.
5.3 Coordination in the network
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Cross dock ´B´ consolidates these shipments with the shipments they collected themselves and hereafter delivers the shipments to their delivery address. Thus, each cross dock in the cross-docking network is specialized in transportation from and to certain geographical regions. This leads for all the companies in the cross-docking network to a better coverage of the region which leads to fuller truckloads and shorter vehicle routes. This leads to a reduction of transportation costs and an increase in the profit margin. The next section discusses two important network coordination decision problems and how they are addressed in practice.
Firstly, we discuss the decision problem freight flow planning in cross-docking networks. This decision problem determines which shipments are shuttled to the other cross docks in the cross-docking network and which are delivered by their own resources. The cases do not align this decision problem with each other, but instead they made fixed arrangements. An example is case 5 and 7. They are trying to establish a boundary which separates the area in which each individual cross dock will operate. This is to ensure that the cross docks in the cross-docking network are not operating and thereby not interfering in each other’s area. This could lead to an increase of the transportation efficiency of the cross-docking network. However, a fixed arrangement as such may not always be the ideal solution for this decision problem. What could occur is that a shipment is located just across the boundary, but cross dock ´A´ already planned a local collection and delivery vehicle route in the proximity of this address. Also, the shipment could eventually be delivered by cross dock ´A´ due to the fact that the delivery address is located in his area. In this particular case the cross-docking network should coordinate and align the process to come to a better solution for this decision problem. This example shows that a fixed arrangement may not be ideal and that continuous alignment between the cross docks in the cross-docking network is recommended. We discuss the alignment between the cross docks with regard to this example in the next section.
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increase may create an imbalance in shipments which need to be transported between the cross docks. This justifies the decision to not increase the capacity on the network route. Of course, the capacity planning for the network routes is evaluated and adjusted regularly, but not coordinated at daily or even weekly basis.
5.4 Coordination for synchronized cross-docking operations
This section discusses the local decision problems in relation with network-wide decision problems. The goal is to show if there is any coordination between cross dock companies and the cross-docking network in which they participate, thus the alignment between these decision problems. We discuss three different combinations of local and network-wide decision problems. The combinations are created and researched based upon the possible influence of the local decision problems on the network-wide decision problems on each other’s outcomes, based upon the framework of Buijs et al. (2013). The analysis shows if there is alignment between the cross docks and the cross-docking networks. Also, in the analysis we discuss what difficulties with regard to the alignment between the decision problems occur in practice.
Firstly, we discuss the shipments to outbound trailer assignment and the collection and delivery
vehicle routing. Certain cases mentioned interesting difficulties and ideas with regard to these
decision problems and the alignment between the cross docks in the cross-docking network, which are discussed below. The decision problem shipment to outbound trailer assignment is short-term planning and considers the resource constraints. Most cross docks receive inbound shipments that are not yet assigned to particular outbound trailers. In that case, a cross-dock can make a consolidation decision to assign specific shipments to specific outbound trailers. This decision influences the collection and delivery route of the vehicles due to the specific delivery address of each shipment. Consolidating the shipments of the cross dock and the network will lead to more efficient vehicle routes. Consequently, coordinating these decision problems in a synchronized manner will increase the performance of the companies.
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consolidate the delivery routes. Case 4 states: “Partnership between shippers, logistics service providers and customers should be of interest to us. Some sort of orchestrator above this network could be implemented to ensure a fair distribution of the costs and benefits among the partners”. This refers to the fact that case 4 believes that significant improvements can be made at the collection routes of the vehicles. This means that cost of delivery will be reduced. Therefore case 4 suggests a third party in the form of an orchestrator which controls all parties and redistributes the costs and benefits among the participating partners. The redistribution of benefits is necessary to obtain the collaboration of the entire supply chain.
With regard to synchronizing the decision problems, shipments to outbound trailer assignment and the collection and delivery vehicle routing, case 5 states: “The goal is to divide the Netherlands into separate services areas in which each cross dock will operate in. This is to assure that the collaboration is efficient for both cross docks”. The idea of dividing the Netherlands in separate service areas is to improve the cross docking operations for this particular region. For instance, the cross dock in the north of the Netherlands will provide the logistic services for north and the middle of the Netherlands. The cross dock located in the south will provide their services in the south and Belgium. This is not a synchronized coordination of the decision problems, but it is a fixed arrangement which enables the cross docks to develop an efficient partnership. However, this arrangement will not always provide the most efficient solution with regard to the assignment of shipments to outbound trailers and the vehicle routes. We refer to the example provided in the previous section ‘coordination in the network’.
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Case 7 is part of the same holding as case 5. Case 5 and 7 cooperate with a third cross dock company. These three cross docks are of the same holding. Together they provide logistic services for the Benelux. Case 7 elaborates on the matter: “Efficiency and consolidation of shipments in the network can be improved. We believe that the planning departments of the cross docks should be merged into a central planning department. This department should have access to all the information related to the shipments in the Benelux and the available resources. The department would then be able to develop the ideal schedule for the different cross docks”. This statement shows that dividing the Netherlands in different service areas, according to case 7, is not the optimal solution but an improvement of the situation. This means that the optimal composition of shipments which are assigned to an outbound trailer is not achieved when the cross docks adhere the separation of the service areas.
Case 5 and 7 both state that the holding judges the performances of the cross docks individually. Case 7 states that the collaboration has resulted that they outsourced a significant part of their logistic services. Thereby, they have to share the turnover with their partners. The company and the holding are aware of this, but nevertheless each cross dock is in the current situation still responsible for their own performances and turnover. Case 5 states: “The holding deliberately chose for assessing the performance of each cross dock individually. When each cross dock is responsible for his own operations the involvement of the cross docks is greater. Large companies often deal with the fact that certain departments or establishments do not feel responsible when operations go wrong”. Case 5 elaborates on this: “Each cross dock puts more effort in his operations, because it affects their performances”. These statements indicate that coordinating and aligning the decision problems are difficult to achieve from a cross dock’s perspective. However, from the cross-docking network’s perspective, the alignment would be a significant improvement with regard to the performances.
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network-wide decision problems in a synchronized manner. However, case 6 intends to establish a central planning department which would be responsible for the route scheduling and thus the assignment of shipments to outbound trailers for the entire network. Their idea is that this department would be able to create the optimal schedule for the entire cross-docking network. Thus, case 6 has the same vision as case 7 with regard to synchronising the decision problems.
Case 9 provides logistics services for entire Europe. To be able to provide these services, the organization makes use of a large number of cross docks. At the establishment in the Netherlands is also the central planning department located. This department schedules 60 percent of capacity and vehicle routing between the cross docks in Europe. The remaining 40 percent is scheduled by each cross dock individually. The advantage of this method is that the capacity planning of the shuttles between the cross docks can be assigned by this central planning department. This leads partly to a synchronised approach with regard to scheduling of the vehicle routing and assigning shipments to outbound trailers. Besides this, is case 9 trying to take the next step: “Currently we are working on a project which is engaged in the capacity planning of the vehicle routes, the capacity management system. We use a large amount of vehicles and the goal is to reduce this number and thereby increasing efficiency and reducing costs. Therefore the organization will gather the information at the entry point and with this information the capacity planning can be improved”. Eventually this capacity management system will fully synchronise the assignment to outbound trailers and the collection and delivery vehicle routing with the information gathered. For instance, the shipments from Oslo could be shipped to Paris directly or it can be consolidated with shipments from Berlin at the cross dock in the Netherlands. This system will develop the most efficient vehicle routes, by synchronizing the decision problems shipments to outbound trailer assignment and the collection and
delivery vehicle routing for the whole network. In this particular case does this mean that the more
efficient the vehicle routes, the fewer vehicles are needed and thereby costs are reduced.
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taking steps to enable synchronized decision-making. Significant differences between the companies are not observed.
Secondly, we elaborate on the decision problem: workforce capacity planning and the capacity
planning for network routes (CPNR). Alignment of these decision problems would implicate that the
influence of fluctuations in CPNR should have an impact on the workforce capacity planning. Thus a decrease of capacity for the network routes should implicate that the workforce capacity also should decrease. Companies do not take both decision problems into consideration when solving them and thus they do not synchronize the decision problems. Case 5 mention that the influence of the CPNR on the workforce capacity planning is negligible and therefore they do not synchronise these decision problems. For instance, the CPNR for case 1 is fixed for a significant part of the time. They develop a workforce capacity planning which takes the CPNR into consideration. Besides this, the companies in the Netherlands make use of part-time employees, which provides flexibility within the workforce and which provides the opportunity to deal with sudden fluctuations in CPNR and volumes. Case 6 and 9 have an in-house agency which can provide part-time employees on short notice. This enables the companies to deal with fluctuations in volume, without the need for synchronizing the decision problems with the cross-docking network.
Thirdly, we discuss the decision problems: shipment to outbound trailer assignment, shipment to
destination assignment and CPNR. Most cases do not deal with shipments of which the destination
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6.
Discussion
Literature provides numerous methods to support decision-making with regard to cross docking operations. Nevertheless, during the interviews we noticed that the provided methods are hardly used in practice. Remarkably, the larger size cross docks are applying certain methods. Case 2 and 9 are relative large cross docks and are part of a relative large cross-docking network. As mentioned in the analysis, case 2 assigns inbound trailers to a strip or stack dock door to reduce the distance the shipments needs to travel in the cross dock. Case 9 schedules the loading and unloading of the inbound and outbound trailers, to ensure the shipments arrive on time at the next hub in the network. It seems that the relative small cross docks do not save enough cost to justify an investment in such method. A rule of thumb is often sufficient. That is why we state the following proposition. Proposition #1: Significant number of cross docks in the Netherlands are not large enough to apply the in the literature provided methods in an efficient and cost-saving manner.
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shipment. However, when the planning department takes the shipments and delivery routes of the cross dock partners into account, this creates another consolidation opportunity, the original schedule may not be the optimal solution.The fact that a few cases recognized the opportunities and benefits of a central planning department led to the following statement.
Proposition #2: Centralized planning department is a promising solution/method with regard to network synchronization.
Further, case 6 is actually taking steps regarding the central planning department. The main difference of case 6 with respect to the other cases is the ownership of the networks. Case 6 is the only company which possesses all the cross docks in their network. Research shows that, this seems to be the main reason which enables them to take action with regard to initiate a central planning department for the entire network. Establishing a central planning department means a long term investment and sharing turnover with cross dock partners. This company has no difficulties with dividing costs, risks and benefits among the companies in the cross-docking network due to fact that this company owns the entire network. The remaining cases are not in the same situation and therefore they experience difficulties. These cases need to divide the costs and benefits equally among the cross docks in the network. Also, by consolidating certain shipments at specific cross docks because this is optimal schedule for the entire network implies that certain cross docks may loose turnover to a partner. This is why we state the following proposition.
Proposition #3: Network ownership plays an important role in the deployment of network-wide optimization methods.
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7.
Conclusion
This thesis showed that cross-docking companies are not yet solving the suggested decision problem combinations in a synchronized manner in practice. Most notably, the organizations believe that solving certain decision problems, regarding the shipments to outbound trailers assignment and the
collection and delivery vehicle routing decision problems, in a synchronized manner increases their
profitability and improves the quality of their services. Also, one company intends to develop a synchronized approach with regard to these two decision problems, by implementing a central planning department.
Remarkably, incentive alignment turns out to be of significant influence for certain companies to rethink whether they proceed with further integration and alignment of their operations. Especially with regard to the decision problems shipments to outbound trailers assignment and the collection
and delivery vehicle routing. Investing in a central planning department and sharing turnover with
cross dock partners is a difficult procedure for a cross-docking network which consists of cross docks which do not share ownership.
7.1 Limitations
A limitation of this research is the balance between the number of organizations which operate within the private cross-docking network and the private cross-docking network. This obstructs the research to provide a comprehensive overview of the cross dock in the Netherlands. Due to this the possibility exist that this research did not found significant differences between the network types with regard to certain combinations of local and network-wide decision problems.
Secondly, the limited amount of literature regarding local and network-wide decision problems which possible could be solved in synchronized manner obstructed the literature research. Only one paper addresses cross-dock coordination and network coordination problem aspects simultaneously. Therefore, this research possible left out certain combinations due to the lack of supporting statements in the literature.
7.2 Further Research
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8.
References
Apte, U.M., Viswanathan, S. (2000), “Effective Cross Docking for Improving Distribution Efficiencies”,
International Journal of Logistics: Research and Applications. 3, 291-302.
Belle, J. van., Valckenaers, P., Cattrysse, D. (2012), “Cross-docking: State of art”, The International
Journal of Management Science. 40, 827-846.
Buijs, P., Carlo, H.J., Vis, I.F.A. (2013), “A review and classification of literature on management for synchronized cross docking network operations”. Working paper.
Boysen, N., Fliedner, M. (2009), “Cross dock scheduling: Classification, literature review and research agenda “, The International Journal of Management Science. 38, 413-422.
Cassell, C., Buehring, A., Symon, G., Johnson, P. (2006), “Qualitative Methods in Management Research: An Introduction to the Themed Issue”, Management Decision. 44, 161-166.
Cruijssen F., Cools, M., Dullaert, W. (2007), “Horizontal Cooperation in Logistics: Opportunities and Impediments”, Transportation Research Part E, 43, 129-142.
Ghiani, G., Laporte, G., Musmanno, R. (2004), “Introduction to logistics systems planning and control”. Whiley.
Luo, G., Noble, J.S. (2011),”An integrated model for crossdock operations including staging”,
International Journal of Production Research. 2451-2464.
Musa, R., Arnaout, J-P., Jung, H. (2010), “Ant colony optimization algorithm to solve for the transportation problem of cross-docking network”, Computers & Industrial Engineering. 59, 85-92. Sheu, C., Yen, H., Chae, D. (2006), “Determinants of supplier-retailer collaboration: evidence from an international study”, International Journal of Operations and Production Management. 26, 24–49. Simatupang, T. and Sridharan, R. (2005), “An integrative framework for supply chain collaboration”,
International Journal of Logistics Management. 16, 257–274.
Stephan, K., Boysen N. (2011), “Cross-docking”, Journal Management Control. 22, 129-137.
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Wen, M., Larsen, J., Clausen, J., Cordeau, J.F., Laporte, G. (2009),”Vehicle routing with cross-docking”,
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9. Appendix
9.1 Appendix A: Interview Protocol
o Confidential Information
I want to hand over this document which clearly states how the information is handled, with regard to potential confidential information. This document explains who has excess to the audio recording of this interview, and what we will do with those recordings. The information will not be provided to third parties, and after the completion of the research the audio recordings are deleted. If something is mentioned that has to be disregarded, mention this during or after the interview I ensure you that this information will be removed. Contact details are provided, so you can reach me if you come up with some additional comments, with regard to the provided information.
o Introduction
I research the planning and management of cross-dock operations and with the aid of interviews I gather information from multiple cross docks organizations in the Netherlands. The research is focused on the coordination of local cross-docking operations and cooperation between different partners in the supply chain. The aim of the study is to provide an overview on local and network-wide decision problems which are solved in a synchronized manner.
o Interview and the results
The interview will take approximately 1.5 hours. First of all, some general questions about you and the cross dock are asked. Hereafter, I will focus on the various decision problems. When the research is completed, you will receive the results.
General o Fleet
- Does the organization possess its own fleet? - How many vehicles do they own?
o Cross dock facility
- How many dock doors are their?
29 Cross dock
o Main cross-docking operations - Which operations are scheduled?
- Which operations are coordinated during the execution of those operations? o Internal flow of shipments
- Could you draw the lay-out of the cross dock and the flow of shipments within the cross dock?
o Staging area
- Are the staging areas fixed or dynamic? - What influenced the decision for that choice? o Workforce capacity planning
- Which factors influence the workforce capacity planning?
- Is the workforce capacity planning influenced by partners or customers? o Groupage decision
- How are groupage decision made? Which factors are of importance?
- Is this decision problem influenced by network partners? Or is their coordination between you and the partners with regard to this decision problem?
o Collection and delivery vehicle routing
- How are the collection and delivery vehicle routing established? - Is this influenced by partners in the cross dock network?
- Does schedule of the collection and delivery routes has influence on the workforce capacity planning or groupage decisions?
Network
o Network
- Could you provide an overview of your network?
- Could you show me how the flow of shipments through the network looks like? o Operations
- Which operations do you align with partners? - What kind of agreements are made?
30 Coordination between cross dock partners
o Capacity planning for network routes
- How is the capacity planning for the network routes established? - Which internal operations are of influence on this decision?
- Do the organizations have access to each others information systems? And do you make use of the information when the capacity planning is made?
o Freight flow planning
- How does the freight flows through the network? - Based upon what information is this decision made?
- Does the freight flow planning has any influence on the operations at your cross dock? o Shipment to destination assignment
- Are their shipments which are interchangeable? - How do you assign these shipments to a destination?
- With regard to the network, how do you process these shipments?
Comments
o Do you have comments with regard to subject we discussed?
Finish
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9.2 Appendix B: Case Characteristics
Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7 Case 8 Case 9
Network Type Public Public Public Private Public Public Public Public Private
Characteristics
Number of Touches 2 3 2 2 2 2 3 2 1/2
Ownership of Vehicles Yes Yes Yes Yes Yes Significant
Part
No Yes Small Part
Number of Dock Doors 30 100-110 15 3 51 49 12 70 186
Number of LSP Partners Multiple Multiple across
Europe- None in the Netherlands
Multiple N.A. Multiple None Multiple N.A. None
Staging Area Fixed Dynamic Fixed Dynamic Fixed Fixed Fixed Fixed Dynamic
Cross Dock Decision Problems
Dock Door Specification No Dynamic Dynamic Dynamic Dynamic Dynamic No No Dynamic
Workforce Capacity Planning
Data-Base/ Foresight
Data-Base/ Forecast Data-Base Data-Base/
Foresight
Data-Base/ Foresight
Data-Base/ Foresight
Data-Base Data-Base Data-Base/
Forecast Scheduling of In- and
Outbound Trailers
FCFS Slot Planning Shortest Driving
Distance
Slot Planning Shortest Driving Distance
Slot Planning N.A. N.A. Master Plan
Shipment to Outbound Trailer Assignment
Based on Routing
Based on Routing Based on
Routing
Based on Retailer orders
Based on Routing Based on
32 Capacity Planning for
Network Routes
Fixed Fixed Fixed N.A. Fixed Fixed Fixed N.A. Master Plan
Shipment to Destination Assignment
N.A. N.A. N.A. N.A. Based on Routing N.A. N.A. N.A. N.A.
Freight Flow Planning Coordination
Between Partners Exclusive Coordination Between Partners N.A. Coordination Between Partners Fixed Schedule
N.A. N.A. Master Plan
Collection and Delivery Vehicle Routing
33 Explanation Table
Network type: The type of cross-docking network which the company is part of. Characteristics
Number of Touches: The number of times that a shipment is picked up by a forklift from an inbound trailer to an outbound trailer.
Ownership of Vehicles: If the organization makes use of vehicles of his own of makes us of third parties.
Number of Dock Doors: Number of dock doors which are used for cross-docking.
Number of LSP Partners: Number of partners in the network.
Staging Area: If the organization makes use of fixed staging areas of dynamic. Dynamic implies that areas are adapted to the volume.
Cross Dock Decisions
Dock Door Specification: Assigning trailer to dock doors. Fixed dock doors are inbound or outbound doors. Dynamic dock door are scheduled, to minimize the distance that the shipment has to travel through the cross dock.
Workforce Capacity Planning: Planning the capacity of the workforce, this is based upon the data-base (History volume) and foresight or forecast.
Scheduling of In- and Outbound Trailers: Scheduling which trailer should be served at what time: FCFS-method. Slot planning, in which each trailer is set for a specific time slot. SDD-method is with regard to the distance from the cross-dock to the destination of the shipment. Master plan, overall planning of in- and outbound trailers, also with slot planning.
Shipment to Outbound Trailer Assignment: Consolidating shipments, based upon vehicle routing, retail orders or volume levels.
Network Decisions
Capacity Planning for Network Routes: Planning of capacity for shuttles between the cross dock in the network. Fixed on short-term, but with flexibility for the long-term.
Shipment to Destination Assignment: Assigning shipments to destination after arrival at the cross dock facility.
Freight Flow Planning: Assigning freight to available shuttles between the cross dock in the network.
