The efficiency affecting factors of the
cross-dock process
An exploratory study to the opportunities to enhance the efficiency of the cross-dock
process at Kuehne and Nagel
Version: 2.1
Author
Student name: Ruben van Olst Student number: 1916971
E-mail: rubenvolst@gmail.com
Address: Scherenenkweg 4
8051KH Hattem The Netherlands
Kuehne and Nagel
Supervisor: Harald Smook
Function: Site manager
E-mail: harald.smook@kuehne-nagel.com
Address: Lippeweg 15
8028 PS Zwolle The Netherlands
University of Groningen
Faculty: Business Administration Master: Operations and Supply Chain Supervisor: Hen van de Water
E-mail: h.van.de.water@rug.nl Co-assessor: Robert Rozier
E-mail: r.a.rozier@rug.nl
Address: Netelbosje 2
Preface
After six months of work I am able to present you this master thesis which elaborates on the research project I performed at Kuehne and Nagel in Zwolle. This final thesis is written to finish the master Operations and Supply Chain at the University of Groningen. Kuehne and Nagel provided me the opportunity to find an interesting problem within their organization concerning a logistic problem in order to improve their operational performance.
Now the project is finished it is time to dwell on the fact that this thesis could not have been finished without the help of a couple of people. First of all I would like to thank the K+N organization in Zwolle and all the employees who supported me throughout this research. In particular I would like to thank Harald Smook who trusted me to start this research. He gave me the freedom I needed to conduct this research. Moreover I would like to thank all the managers and employees, without them this result was not possible. Even though demanding times, they assisted me in order to give me insights in the current processes. Additionally the business atmosphere endured remarkably pleasant.
Furthermore I would like to thank both the supervisor and the co-assessor from the University of Groningen for their assistance and support during this research. Without Hen van de Water, my supervisor, the structure as well as the quality would not have reached this level.
This research was rather demanding, however it also was a great opportunity and experience for me to relate theoretical knowledge to a practical situation. I am glad to present to you this research. Please enjoy reading.
Ruben van Olst
Management Summary
The reason to start this research is that Kuehne and Nagel (K+N) have indicated that they perceive two problems within her cross-dock process. The management beliefs these two problems are indicative for the inefficiency of the current cross dock process. The management is interested which factors determine the efficiency of the cross dock process at K+N. In addition, they want to know how these factors can be improved in order to enhance the efficiency of the cross dock process. Therefore the following research question had to be answered: Which factors affect which process
part of the cross-dock, and how are these factors affecting the efficiency of the cross-dock process?
Based on plausible influencing factors as described in the literature, mainly based on the factors as described in the paper of Vogt (2010), this study investigated which of those factors influence which part of the process. The results show that the following factors influence one or more steps in the cross-dock process of K+N:
1) Standardized products and unloading methods in the supply chain. 2) Reliability and efficiency of suppliers.
3) Reliability and efficiency of customers. 4) Expertise and reliability transporters.
5) Sufficient and uniquely skilled management and staff. 6) Quality information provided by the information systems. 7) Balanced workload.
This paper contributed to cross-dock management by showing which factors influences the efficiency of the cross-dock process. The described influencing factors and its consequences can be taken as a starting point to enhance the efficiency of the cross-dock process. Hence, in order to improve the efficiency of the cross-dock of K+N, some major recommendations are stated:
Enhance and clarify the agreements with suppliers and customers about the distribution of the arriving trucks, in order to balance the workload.
Improve the current way of problem solving; the management should structure their problem solving process.
Table of contents
1. Introduction ... 6 2. Problem statement ... 10 3. Research methodology ... 17 4. Findings ... 20 4.1 Arrival of trucks ... 21 4.2 unloading process ... 22 4.3 Material handling ... 23 4.4 Buffers ... 24 4.5 Processing ... 24 4.6 Loading process ... 26 4.7 Additional findings ... 27 5. Discussion ... 295.1 Answers on the sub-questions ... 29
5.2 Recommendations and further research ... 34
5.3 Priority of the recommendations ... 39
5.4 Limitations ... 42
6. References ... 43
Appendix ... 48
A. Registration of the interviews ... 48
C. Observations at the unloading docks ... 50
D. Deliveries of non-standardized products ... 52
E. Workload distribution during the week ... 53
F. Problem solving structure ... 56
G. Input of the APH model ... 57
1. Introduction
This paper is the result of a request by the management of ‘Kuehne and Nagel location Zwolle’ (further indicated as K+N), to study their cross dock process. K+N is a logistic company which functions as a returning centre of food related products. The management is concerned about the efficiency of their cross dock process since they receive complaints from important suppliers and customers about long waiting times to deliver and receive their products. In addition, K+N themselves experience high costs as a result of unnecessary actions and movements in the cross dock process. Taken together, the management beliefs the cross dock process is not working optimally and needs to be improved. In order to be able to more specifically analyze the problems at K+N the organization will first be briefly described.
Kuehne and Nagel
K+N is part of the larger organization ‘Kuehne and Nagel group’. Nowadays, the Kuehne and Nagel group has grown to be one of the world’s leading logistics companies. They have more than 900 offices in over 100 countries, and employ approximately 56.000 employees. At the location of Zwolle, depending on the season, K+N employ more or less 90 employees which are divided in several shifts. Operations are centered around handling of more than 80 different products. These products are transport and storage related products such as: plastic crates, beer and milk cases, and packaging material. Most products are received on roll containers and rolly’s and are supplied on pallets. Therefore K+N is part of a supply chain in the food industry.
Suppliers Transporters K+N Transporters Customers
Figure 1: The supply chain of K+N
Cross dock process
The cross-dock process at K+N can be more specifically described according to the several process steps as depicted in figure 2. These steps will be briefly described.
Arrival of trucks.
The first step in the cross-dock process is the arrival of trucks. The entering transporters have to subscribe themselves at the entrance. At this point the transporters get assigned a dock where they can unload the trucks.
Unloading process.
After docking the truck at the assigned unloading dock, the transporter unload the truck themselves. The idea is that the truck driver roughly sorts the different product types, on such way the employees of K+N can easily pick up the products. Nonetheless the employees of K+N on the unloading dock are responsible for the (pre-) sorting the products on product type.
Material handling.
Subsequently K+N employees transfer the sorted products, with an electric order pick vehicle, to the buffer of that particular product type.
Buffer.
Employees of K+N scan the labels, which are attached on the products that arrive in the buffer. Besides the employees check the products on damages.
Processing.
The next phase is processing the products. Each product type is processed differently, but basically the products are in this phase sorted, assembled, cleaned and finally sorted on a pallet. There are several processing areas, each processing area processes a particular product type.
Material handling.
Buffer.
The loading docks are regularly used as a buffer. This allows the transporter to load the products rapidly. However, K+N is not always able to put ready the required products, therefore the products are moved directly into the trucks (therefore buffer III is indicated with a dotted line).
Loading process & the departure of trucks.
The products are mainly loaded by the truck drivers themselves, from the loading dock into their trucks. After the loading process the departing transporters have to again subscribe themselves at the office, in order to finalize the order. Subsequently the truck drivers can leave the K+N terrain through the exit.
Figure 2: The cross-dock process.
Management problem
The initial motive of this research is that the management of K+N experiences different problems within the above described cross dock process. The two main problems highlighted by the management in introducing conversations are related to the first two steps of the cross-dock process (see figure 2). First, regularly a large congestion of loading and unloading trucks at the entrance emerges. On demanding times this congestion results even in queues outside the terrain of K+N. Because of these long queues transporters are exceeding the maximum time they have agreed on to arrive, (un)load, and departure. As a result, the management receives complaints about this disrupted flow of arrival from suppliers and customers. Besides K+N beliefs this congestion disrupts the efficiency of the cross dock process since the flow of arrival is disrupted.
irritations at the transporters. They complain that the products are blocking the process of loading and unloading.
2. Problem statement
In this section the management problem will be translated into a research question. Based on prior research in the field of operations and supply chain management the efficiency of the cross dock process will be defined. Thereafter, the factors that might influence the efficiency of the cross dock process will be analyzed and defined. Subsequently the possible relations among these factors are visualized in a conceptual model. Resulting in a research objective, a research question and sub questions for this study.
Efficiency of the cross dock process
In the literature the cross-dock process is described by Schönsleben (2007) and Apte and Viswanathan (2000) as a concept of load building on the incoming vehicle in order to more easily carry the packaged products on the outgoing vehicle at the trans-shipment point without being stored longer than 24 hours. More generally, cross docking can be seen as the process of receiving, sorting and transferring of products (Yang, Balakrishnan and Cheng, 2010). This process, as described by Yang et al. (2010) is visualized in figure 3.
Efficiency in general can be defined as the extent to which time or effort is well used for the intended purpose or task (in’t Veld, 2007). Therefore, roughly stated, the cross dock process can be considered efficient when products are received, sorted and supplied without unnecessarily delays. In contrast, the cross dock process can be considered inefficient when products are delayed unnecessarily and stand still without adding any value.
Slack and Lewis (2008) argue that the efficiency of a process is determined by the efficiency of the individual activities within this process Hence, in order to be able to enhance the entire cross-dock process, the individual process steps of K+N should be analyzed. The cross-dock process of K+N can be distinguished in six unique steps as described in the introduction. Therefore the efficiency of the cross dock process at K+N will be analyzed by looking at the influence of the six unique steps separately. In other words, the influence of every unique step in the process on the efficiency of the entire process will be examined. In addition every single cross-dock process step can influence the entire process, since step one must be done before step two can be performed.
Possible influencing factors
As stated in the introduction, the management of K+N wants to be familiar with the factors that might affect the efficiency of their dock process in order to enhance the efficiency of the cross-dock process.
In the literature not much research is conducted to the factors influencing the efficiency of the cross- dock process. Factors which are found to be influential in prior research are mainly referring to aspects within the internal operations. For example Yang et al. (2010) investigated the influence of pallet handling, freight mix, number of forklifts and the number of receiving doors on the efficiency of the cross-dock process. Other research used factors regarding the distribution from and to the cross-dock. For instance Maknoon and Baptiste (2009) studied the influence of the incoming sequence of semi-trailers, the outgoing sequence of semi-trailers, and the unloading sequence of products from semi-trailers on the efficiency of the cross-dock process. In addition studies of Boysen and Fliedner (2009); Bartholdi and Gue (2001); Alpan, Larbi, and Penz (2011) investigated the effect of the scheduling of trucks on the cross-dock efficiency.
Although all these factors are relevant to some extent, the cross-dock process problems experienced at K+N are more related to their supply chain. A comprehensive list of factors which are more related to supply chains is provided by Vogt (2010). He explains that the success of a cross-dock based supply chain depends on several factors. These factors are:
Reliable efficient suppliers.
Expert and reliable supply chain service providers. Process improvement and problem solving capability. Uniquely skilled management and staff.
Well-chosen and well working information systems. Work balancing and minimization.
Efficient physical facility design and layout.
Understanding how cross-dock based supply chains works.
Although these factors are described by Vogt (2010) as influencing the entire cross-dock based supply chain these factors can also been viewed as important factors at the cross-dock process at K+N. Kotler and Armstrong (2005) state that the factors that influence the business chain, may also influence the individual business as well. Therefore, the nine factors described by Vogt (2010) are interesting factors that might influence the cross dock process at K+N as well.
The nine factors described by Vogt (2010) will now be shortly described. These factors will be to some extent modified or rephrased based on additional research in order to make these factors (the independent variables) applicable to the specific case at K+N.
Standardized products and unloading methods.
Vogt (2010) refers to appropriate products as those products that have similar handling characteristics, which can be seen as standardized products. Standardized products have a fixed structure, thus these products do not have any deviations or what so ever (Krajewski and Ritzman, 2005). Next to using standardized products within the cross-dock process, the unloading methods influence the cross-dock process efficiency as well (Maknoon and Baptiste, 2009). By using a standardized unloading (delivery) method within the cross-dock process products can be handled on one similar manner (Krajewski and Ritzman, 2005). Therefore it is interesting to investigate if the currently used products and unloading methods at K+N influence the cross-dock process efficiency.
Reliable efficient suppliers.
Reliable efficient suppliers deliver products in optimal quantity, on the scheduled time and fulfill their promises (Vogt, 2010).
Reliable efficient customers.
Nonetheless Vogt (2010) did not state that customers influence the cross-dock process. Since customers determine the demand, the customers determine the amount of products that is processed by the cross-dock (Wen et al., 2009). In addition the role and the position of the customers and suppliers are different in the supply chain of K+N. Therefore it is interesting to investigate if the factor “customers” influences the efficiency of the cross-dock at K+N. In addition reliable efficient customers are those who fulfill their agreements with respect to ordering products (Cannella and Ciancimino, 2010).
Expert and reliable transporters.
Vogt (2010) defines “Supply chain service providers” as companies which are active within the same supply chain and are responsible for the transportation and the cross-docking process. However K+N is responsible for the cross-dock process, therefore only the transporting aspect is left. Expert ad reliable transporters are those who move the right products in the right quantities into the supply chain at the right time. Besides expert and reliable transporters have to fulfill their agreements with respect to the planning of the delivering, the retrieval of products, and the used unloading methods (Vogt, 2010; Maknoon and Baptiste, 2009). Hence expert and reliable transporters pick up the right quality, on the right place, on the right time (Vogt, 2010; Wen et al., 2009).
Uniquely and sufficient skilled management and employees.
Vogt (2010) mentioned next to “uniquely skilled management and staff” two other management related issues: “Process improvement and problem solving capability” and “Understanding how cross-dock based supply chains works”. Process improvement and problem solving are activities which executed by the management and the employees (Marcus and van Dam, 2009). Besides understanding how cross-dock based supply chains works is a condition to work within the supply chain, therefore the knowledge what is needed to operate within a supply chain, has to be familiar with the management and their employees (Cannella and Ciancimino, 2010). For that reason these factors can be captured into one factor: “uniquely and sufficient skilled management and employees”. The management and employees is uniquely and sufficient skilled when the management is able to properly manage, control and plan the operational and strategic businesses and the employees know their tasks, how to perform it and how to execute it correctly (Marcus and van Dam, 2009).
Quality of information provided by the information systems.
facilitate good and reliable management information (Krajewski and Ritzman, 2005). Good and reliable information is required in order to manage and improve operational processes, (Marcus and van Dam, 2009). Information is of a high quality, when the information is complete, on time, up-to-date and reliable (Krajewski and Ritzman, 2005). Therefore the factor as described by Vogt (2010) “Well-chosen information systems” is in this research further indicated as “The quality of information provided by the information systems”.
Workload balancing.
Workload balancing and minimization include according to Vogt (2010) two aspects: ensure that the workload remains during the day at a continuous level and minimize the overall transfer and transport distance. However, the last aspect is regarding to the design and layout of the cross-dock, since the travel distance is determined by the location of physical aspects (Larbi et al., 2011). Therefore this factor is captured within the factor “Efficient physical facility design and layout”. Moreover the “Work balancing and minimization” can be rephrased to “Workload balancing”. Hence the workload is balanced when the workload per process step is balanced and when the workload is smoothen throughout a certain period of time (Schönsleben, 2007; Emdea, Boysena and Scholl, 2010).
Efficient physical facility design and layout.
Conceptual model
In addition, based on the described theory a conceptual model will be set up. The conceptual model (figure 4) is used to gain insight into the possible relationship between the possible influencing factors and the efficiency of the cross-dock process. Analyzing a conceptual model is a useful instrument to investigate such possible relationship (Baarda and de Goede, 2008).
Figure 4: The conceptual model.
Research objective and research question
Research objective: Enhance the efficiency of cross-dock process.
Research question: Which factors influence which process part of the cross-dock, and how are these factors affecting the efficiency of the cross-dock process?
Based on the conceptual model and to specify the research question, the following sub questions are stated:
1. To what extent of standardization of products and unloading methods influences the efficiency of the cross-dock process?
2. To what level of reliability and efficiency of suppliers influences the efficiency of the cross-dock process?
3. To what level of reliability and efficiency of customers influences the efficiency of the cross-dock process?
4. To what level of expertise and reliability transporters influences the efficiency of the cross-dock process?
5. To what extent of the skills of management and employees influences the efficiency of the cross-dock process?
6. To what extent of quality and reliability of information provided by the information systems influences the efficiency of the cross-dock process?
7. To what extent influences work balancing the efficiency of the cross-dock process?
3. Research methodology
In order to give a proper answer on the sub-questions a qualitative research is conducted. According to Boeije (2008); Maxwell (1998); Miles and Huberman (1994); (Yin, 2011), qualitative research is the most appropriate research when:
Not much previous research is done the particular research field. Cross-docking is a relative
new phenomena, therefore not much research is done within this field (Vogt, 2010).
The research is done in complex and environment. The environment of K+N can be
considered as complex, since the relative high arrival rate of arriving and departing trucks; the high movement of incoming and outgoing products and the high movement of products within cross-dock itself (Kingsley and Reeves, 2007).
There is a need to understand how and why relationships exist. As stated in the introduction
K+N want to be familiar with the factors that influences the efficiency of the cross-dock process, and how these factors are influencing the efficiency of the cross-dock process.
The qualitative research started with a sketchy goal and a research question. Through repeatedly studying, analyzing and comparing the collected data with the literature, the research question, research objective and the research itself becomes more concrete and detailed (Boeije, 2008; Maxwell, 1998).
Literature.
The first limitation of results was achieved by making use of limiters as academic journals, publication type and if the result has been scholarly reviewed. By applying this limitation the search for factors that are influencing the performance of the cross-dock is rather limited. Although the limited amount of appropriate articles, numerous factors are generally described in these articles which are possible affecting the cross-dock performance. In this paper relevant literature is integrated in the entire thesis, for instance literature is used to construct the problem statement and the conceptual model. The literature used in this research is extracted from scientific papers, articles and books.
Interviews.
Appendix A: Table 2 “Introducing conversations” depicts the following aspects of the introducing conversations: the participants and their function , the subjects, the duration of the interviews and the date when the interview is held.
Participants.
The in total eleven introducing conversations were held among six different managers and employees of K+N. These introducing conversations lasted 720 minutes in total.
The site manager: 3 times interviewed The operations manager: 1 time interviewed A (logistic) project manager: 2 times interviewed Three supervisors: 5 times in total interviewed
Unlike the introducing conversations, the main interviews are more profound and specific. The result of the main interviews are in this research the most important input of the findings of this research. Appendix A: Table 3 “Main interviews” depicts the following aspects of the main interviews: the participants and their function , the subjects, the duration of the interviews and the date when the interview is held. The in total fifteen main interviews were held among nine different managers and employees of K+N. These main interviews lasted 1180 minutes in total.
The site manager: 4 times interviewed The operations manager: 2 times interviewed
Two (logistic) project managers: 3 times in total interviewed Five supervisors: 8 times in total interviewed
Procedure.
ended and were related to the influence of the following factors on the efficiency of the cross-dock process at K+N:
1. The extent of standardization of products and unloading methods used within in the supply chain.
2. The level of reliability and efficiency suppliers. 3. The level of reliability and efficiency customers. 4. The level of expertise and reliability transporters. 5. The level of the skills of management and employees.
6. The extent of quality and reliability of information provided by the information systems. 7. The extent of workload balancing.
8. The degree of efficiency of design and layout of the physical facility.
Specifically, per process step is questioned which of the independent factors influences the efficiency of the cross-dock process; how these independent factors influence the efficiency of the cross-dock process; what indicates the influence of that particular factor; can you comprehensively explain and show how this particular factor influence the efficiency cross-dock; et cetera. Moreover when all the findings of the interviews were described, these findings were verified by the management of K+N. Besides the participation of the interviewees was voluntary and their contribution was confidentially.
Observations.
4. Findings
The findings are collected by means of the main interviews combined with insights obtained from observations and literature. Substantial interesting information is gathered during the interviews and observations, nevertheless only a certain amount of data is relevant for this study. In order to keep overview, the results are chronological presented according to the cross-dock process of K+N, as described in the introduction (figure 2). An overview is depicted in table 1 of which visualizes the influence of the independent factors on the cross-dock process steps.
However, before the findings are stated, some remarks have to be made. The last process step “the departure of the trucks” is not taken into these findings, since the results made clear that within this process step nothing actually happens. As described in the introduction, the departure of trucks simply means that the transporters are leaving from the docks and departing through the exit. Therefore this step is omitted in the further research. Besides, the possible influence of the factor “efficient physical facility design and layout” on the efficiency of the cross-dock process is not elaborated. Due to the limited research time, the possible influence of this particular factor could not be scrutinized and elaborated within this study. During the research several additional findings are made, the additional findings which are described in section 4.7.
Table 1: The relations between the affecting factors and the steps of the cross-dock process.
Section: 4.1 4.2 4.3 4.4 4.5 4.6 Cross-dock process: Arrival of trucks Unloading process Material Handling
Buffers Processing Loading process
Influencing Factors:
Standardization of products and
unloading methods x x
Reliability and efficiency of
suppliers x x
Reliability and efficiency of
customers x x
Expertise and reliablility
transporters x x x
Sufficiently and uniquely skilled
management and employees x x x x x Quality of information provided
by the information systems x x
Workload balancing
4.1 Arrival of trucks
From the conversations and observations it appeared that transporters often have to wait in a queue. K+N and their suppliers have an agreement about the time the transporters are allowed to discharge their products at K+N. However this queue ensures regularly that transporters remains longer on the terrain of K+N than actually agreed. The following independent factors seem to have influence on this congestion:
Reliability and efficiency of suppliers. Expertise and reliability of transporters.
Sufficiently and uniquely skilled management and employees. Workload balancing.
Reliability and efficiency of suppliers. Occasionally there seems to be a communication / planning
problem between K+N and their suppliers. A reason for that is that the suppliers do not always properly communicate their transportation planning and the changes in the transportation planning. Therefore K+N is not always familiar with the exact transportation planning and is consequently not always prepared on the unplanned trucks. Since the transport is not always properly planned and communicated, the arrival of trucks is disturbed.
Expertise and reliability of transporters. During demanding times, especially on Friday and Saturday,
regularly a congestion of trucks occurs before the unloading docks. The congestion of trucks is partly caused by the transporters themselves. The data of the administration of K+N and interviews revealed that transporters do not always arrive on the planned time. Often transporters arrive 30 minutes or more too early or too late. In other words the transporters do not execute the planning correctly. Next to the deviations from the planning it seems to be that the arrival of trucks not occurs gradually. However, quite often the transporters arrive in batches. Since the transporters arrive not gradually, there are very busy and quiet moments at K+N. Because K+N has a limited capacity, K+N is not always able to handle all the arriving trucks, which partly leads to a congestion of trucks. In addition the somewhat uncontrolled arrival of unloading trucks affects the workload of K+N administration department and the work floor (the unloading docks and processing areas) of K+N.
Sufficiently and uniquely skilled management and employees. From the conversations it appeared
is currently possible for transporters who arrive an hour too early to unload at K+N, without any consequences.
Workload balancing. An estimated distribution of the current workload at K+N is 35% on Monday
and Tuesday compared with 65% on Friday and Saturday (see appendix “E. Distribution of the workload during the week”). Besides this data revealed that the workload per hour is rather different, where for example it could be the case that there are 15 trucks arriving between 11:00 and 12:00 o’clock opposed to 30 trucks between 12:00 to 13:00 o’clock. Since there could be times where barely any truck arrives and it could be the case that it is very busy, it is more likely trucks arrive simultaneously. Since trucks arrive simultaneously or in other words in batches, it is more likely transporters have to wait. Besides, interviews revealed that through this highly deviating arrival of trucks, scheduling the right amount employees is hard.
4.2 unloading process
Observations and the interviews made clear that at this step of the cross-dock process, regularly the following problem occurs. At times the unloading docks are completely occupied with products, which results in that transporters cannot quickly discharge their trucks. Additionally employees of K+N are for that reason not able to transfer the products well, since the workspace is limited. The interviews showed that the influencing factors of the second part of the cross-dock process are:
Standardization of products and unloading methods. Expertise and reliability of transporters.
Workload balancing.
The findings regarding these independent factors are described below.
Standardization of products and unloading methods & Expertise and reliability transporters. At less
In addition, interviews revealed that K+N does not have clear and full-coverage agreements with the transporters about how to unload the trucks properly. Therefore the transporters can unload their trucks on a non-standardized and not appropriate manner.
Workload balancing. As described in 4.1, the trucks arrive regularly in batches, therefore the
workload differs per hour. The interviews revealed that the deviating workload, at times, is hard to handle. Since at times the workload increases substantially, the employees are not able to handle the incoming products which contributes to congestion at the docks.
4.3 Material handling
Material handling includes all the transport within the building of K+N. As depicted in figure 2, material handling takes place on two places. The first material handling takes place from the unloading docks to the buffers before the processing area and the second material handling takes place from the buffers after the processing area to the loading docks. Although different material is used in both situations and takes place on different place the same findings are made, therefore the findings of “material handling” are stated in one paragraph. From the conversations and observations it appeared that “material handling” is mainly influenced by the independent factor: Sufficient and uniquely skilled management and employees.
Sufficiently and uniquely skilled management and employees. The interviews and observations
made clear that employees of K+N who drive on electric pallet trucks and forklifts drive regularly inefficient. These employees, in particular new employees, regularly pick up products, bring these products to the processing area and drive back without products. Which result that the electric pallet trucks and the forklifts handle fewer products. This behavior can be considered as inefficient, since the products remain longer on the docks or in the buffers.
4.4 Buffers
As described in the introduction, there are actually three buffers within the cross-dock process. In this paragraph the findings of all three buffers are described. At times the buffer becomes excessive, a limited amount of workspace is the result. This step of the cross-dock process seems to be affected by the following independent factors:
Reliability and efficiency of customers.
Sufficiently and uniquely skilled management and employees.
Reliability and efficiency of customers. Interviews made clear that K+N has some agreements with
their customers in order to pick up products from the buffers. Agreed is that when the buffer of a particular product has reached a certain amount of units, the regarding customers have to pick up the products in order to reduce the buffer at K+N. However since the customers do not fulfill this agreement, the buffers at K+N become regularly too excessive. As a result, buffers exceed their maximum.
Sufficiently and uniquely skilled management and employees. As depicted in figure 2 there are
buffers on several locations in the process. There are buffers before and after the processing areas. Furthermore some docks are regularly used as buffer as well. Observations and interviews revealed that at demanding times, especially on Friday and Saturday the buffers can become excessive at K+N. With excessive buffers is meant when the buffers cross the designated area. Observed is that this phenomena habitually occurs. Likewise observed is proliferation of buffers. In case of excessive buffers, employees put the products outside the indicated buffer area. Theproliferations of buffers can affect the material handling, since the excessive buffers can block the electric pallet trucks and the forklifts. Regularly the buffers are such extensive that the buffers are transported outside. Moving the buffers outside is quite time-consuming. When these products are needed, the products are moved inside the building again. This phenomenon contributes to undesirable postponement of products. In addition, the employees of K+N place quite often products in a buffer on such manner the buffer space is used rather inefficient. Some employees put the products in the front of the buffer area, so the back of the buffer remains unused.
4.5 Processing
times, the process areas can be too crowed in order to work efficiently. The processing areas can considered as a problem, since they cannot always handle the amount of work. The independent factors that influence this step of the cross-dock process are:
Standardization of products and unloading methods. Reliability and efficiency of suppliers
Sufficiently and uniquely skilled management and employees Quality of information provided by the information systems.
Standardization of products and unloading methods & reliability and efficiency suppliers. Currently
substantial suppliers omit to deliver the products on a appropriate and standardized manner. Quite often suppliers deliver “mixed” products. With mixed products it is meant for example that one rolly or roll-container contains/carries more than one product type or more than one product size. In appendix D “Deliveries of standardized products” some examples of deliveries of non-standardized products are depicted.
The machines in the plastic crate processing area are not able to handle rolly’s with different types of crates on them and also jam if the wrong amount of crates is on the rolly. Feeding those incorrect rolly’s into the machines, it causes jams and errors, which consequently results in delays. To prevent this, employees of K+N has to sort and regroup the products before entering products in these machines. However the risk of entering non-standardized rolly’s remains. Anyway, K+N is settled with more work and has an increased risk of errors. Besides, the throughput times of the products drop in case of a delivery of non-standardized products.
Sufficiently and uniquely skilled management and employees. Besides, observed is that there are
some fluctuations in the capacity at some particular processing areas. At demanding times employees are shifted over to more demanding areas. The processing area where workers are shifted from has over time to cope with large buffers, since less employees are working in this area’s. Another factor that influences the capacity is the work breaks of the employees. Basically K+N divides the personnel into two groups; one group has a break from 17:00 till 17:30 and the other group from 17:30 -18:00. From 17:00 till 18:00 they have to work with basically the half of the personnel capacity. Hence often is observed that after the pauses the workload increased drastically.
Quality of information provided by the information systems. Moreover the processing part seems to
plan the processing machines with limited information. Due to the lack of information, K+N cannot properly plan the machines that processes the plastic crates. Therefore non optimal batches are entered into these machines; in turn the sum of changeover times increases (Krajewski and Ritzman, 2005). Additionally, during the changeovers, the machine cannot be used entirely. Hence less products can processed.
4.6 Loading process
In this paragraph the findings of the final process step is described; the loading process. The loading process is currently working inefficient; indicatively this inefficiency is caused by the congestion of trucks that wants to load at K+N. The following independent factors seem to have influence on efficiency of the cross-dock.
Reliability and efficiency of customers. Expertise and reliability of transporters.
Sufficiently and uniquely skilled management and employees.
Quality and reliability of information provided by the information systems.
Reliability and efficiency customers & Expertise and reliability of transporters. From the
conversations it appeared that the customers often not plan their orders. Customers regularly assume that K+N has sufficient products available and send an unplanned transporter to pick products. Therefore the majority of the arriving transporters who want to load products is unplanned. Moreover only a minority of the arriving trucks that is planned, arrives on the agreed time. Hence, since the unplanned arrival of trucks, it is not possible for K+N to put ready the products. Hence when transporters want to pick an order, transporters often have to wait in a queue, since K+N has to prepare the orders.
Moreover interviews and observations showed that in 70 percent of the cases the transporters do not have the required transportation documents, therefore employees of K+N has to find out what the exact order is. Therefore the transporters have to put their truck aside to wait on a confirmation of K+N of the exact order. Hence this results in a higher workload for the K+N office employees, since K+N has to find out which products have to be released next to their normal activities. Moreover the flow of arrival is influenced negatively, since the truck stand unnecessary still.
Sufficiently and uniquely skilled management and employees. The rather uncontrolled arrival of
not executed as scheduled. It is plausible that the suppliers plan the transportation and communicate the plan not properly, or the transporters do not execute the planning correctly. Furthermore it is plausible that the current information and planning systems between the customers and K+N is not sufficient. Observations and interviews made clear that the current method to plan customer orders is not satisfactory. The current work method appears to be sensitive for errors, since the different information systems are not well corresponding among the systems of K+N and among K+N and their customers.
Quality and reliability of information provided by the information systems. The available amount of
products as presented in the information systems of K+N does not always correspond with the actual present products. There is quite often a large discrepancy between the actual amount of products and the amount of products presented in the information systems of K+N. Thus, when a customer orders products and K+N beliefs the products are available, it occurs that the transporter arrives and the ordered products are not available. Therefore the transporters have to wait sometimes up to an hour, or have to come back another time. In turn it results in congestion of trucks before the loading docks.
4.7 Additional findings
During the research some additional findings are made. These findings are described below.
Problem solving. From the interviews it appeared that K+N has difficulties with solving the problems
on a structured and profound manner. Additionally the interviews revealed that the managers of K+N respond rather ad-hoc on problematic situations. In case when a manager notifies a problem, the manager quite often tries to solve the problem without judging alternatives properly and involve other managers. Furthermore there seems to be a lack of communication regarding the problems and the solutions of these problems, and a lack of central coordination of solving problems. Therefore not every one of K+N is familiar with the problems and the current situation of the problems. Several interviewees indicated that managers spend rather much time on running the daily operations than on solving problems. Hence structural problems remain unsolved for quite a long time.
Work procedures. The current work procedures are not always up-to-date or complete. Some of the
5. Discussion
These sections briefly discuss the answers on the sub questions. Subsequently, in section 5.2, the recommendations and the possible further research are described. In section 5.3 the limitations of this research is discussed.
5.1 Answers on the sub-questions
The results showed that the following seven out of the eight factors are influencing efficiency of the cross-dock process (table 1, in the section “Findings”). Despite the plausible relation described in the literature, this study cannot confirm the relation of “efficient physical facility design and layout” and the efficiency of the cross-dock process, due to the limited research time. The independent factors and their influence on the cross-dock performance of K+N are elaborated per sub-question.
1. To what extent of standardization of products and unloading methods influences the efficiency of the cross-dock process?
This study at K+N is in line with the above described literature. This study showed that using appropriate and standardized products and unloading methods influence the efficiency of some steps of the cross-dock process. The suppliers of K+N often deliver non-standardized products to K+N. Besides the transporters unload their trucks with a non-standardized unloading method. As result of those actions of the suppliers and the transporters the efficiency of the cross-dock process is influenced. Since K+N are settled with extra work and K+N has an increased risk of errors. The problems occur basically on the unloading docks and on the processing area.
2. To what level of reliability and efficiency of suppliers influences the efficiency of the cross-dock process?
The results showed that the suppliers of K+N have planning problems. Therefore K+N is not always familiar with the exact transportation planning and is therefore not always prepared on some truck arrivals. Since the transport is not always properly planned and not properly communicated. Due to irregular and not smoothen arrival of trucks the workload cannot be balanced. Besides, suppliers are responsible for the content of the unloading trucks; hence the suppliers are responsible for the degree of standardization of the products. Nowadays K+N receives a lot of non-standardized and inappropriate products. Consequently K+N is saddled with extra work as well as an increased risk on errors at some processing areas.
Therefore to certain extent reliable and efficient suppliers influence the efficiency of the cross-dock process of K+N. Since, the suppliers do not deliver the right quality, on the right place, on the right time the efficiency of the cross-dock process will be negatively influenced (Vogt, 2010; Wen et al., 2009; Hill et al., 2009).
3. To what level of reliability and efficiency of customers influences the efficiency of the cross-dock process?
the agreement about picking up products when a certain limited of products is reached in the buffers of K+N; the efficiency of the cross-dock process of K+N is negatively influenced (Slack and Lewis, 2008; Vogt, 2010 Wen et al., 2009). Especially the efficiency of the cross-dock process steps: Buffers and the Loading process.
4. To what level of expertise and reliability transporters influences the efficiency of the cross-dock process?
The transporters influence the following steps in the cross-dock process: The arrival of trucks, the unloading process and the loading process. At the cross-dock process steps: arrival of trucks, and the loading process, the transporters arrive not according to the schedule. Therefore K+N is not always able to handle the arriving trucks which want to load and unload. This results in a congestion of trucks. According to Vogt (2010) if the obligation is on the suppliers to move the right product in the right quantity into the supply chain at the right time then the transporters must also perform the tasks allocated to them to the same standards (Vogt, 2010). In addition since transporters do not arrive on the planned time, they disturb the arrival process. Hence, it is plausible that numerous trucks arrive on the same time subsequently it disturbs the efficiency of the cross-dock (Slack and Lewis, 2008).
Moreover since transporters are not always willing to unload the products on a standardized and appropriate manner, especially on demanding times, K+N is saddled with unnecessary additional work. When the transporters are not keeping promises with respect to the planning or the way of delivering, the efficiency of the companies who are sending or receiving products influences by the non-reliable transporters (Vogt, 2010).
5. To what extent of the skills of management and employees influences the efficiency of the cross-dock process?
K+N. When companies solve problems too late or deal with processes that are not efficient or effective, the company is not as efficient as it supposed to be (Marcus and van Dam, 2009).
The concept of workload balancing is ensuring that the workload remains during the day at a continuous level (Vogt, 2010). The workload is balanced when the workload per process step is balanced and when the workload is smoothen throughout a certain period of time (Schönsleben, 2007; Emdea, Boysena and Scholl, 2010). However the results of this research show that the workload is not balanced at K+N. The workload at K+N is rather deviating, at times it is very demanding and later on it could be not busy at al. The suppliers and the customers plan the transportation, however transporters arrive regularly unplanned and deviating from the planning. The findings of this study show that the management of K+N fails to properly coordinate the arriving process
Moreover, the extent of uniquely and sufficient skilled management and employees determine the efficiency of the cross-dock process on another way as well. Some employees of K+N seem to miss a certain insight in order to work efficient. The management could have put more effort in training and educating the employees who are in need of training, in order to work efficiently. Besides, due to the lack of up-to-date and complete work procedures, which is the responsibility of the management, employees make unnecessary mistakes. According to Vogt (2010); Marcus and van Dam (2009) and Boysena and Scholl (2010) employees have to able to conduct their tasks properly; complete, up-to-date and proper work procedures are a useful tool to perform well.
6. To what extent of quality and reliability of information provided by the information systems influences the efficiency of the cross-dock process?
The quality and reliability of information provided by the information systems to influence the efficiency of K+N’s cross-dock process. The information provided by the information systems influences basically the cross-dock process steps: processing and the loading process. Boysen and Fliedner (2009) state that good information is needed to properly schedule the trucks. However the processing part of the cross-dock process seems to be negatively influenced by the lack of quality of information provided by the information systems. Therefore non optimal batches are entered into these machines, in turn the sum of changeover times increases (Krajewski and Ritzman, 2005). Besides during the changeovers, the machine can partly not be used; therefore less products can be processed (Krajewski and Ritzman, 2005)
information and therefore the lack of coordination, contributes to a congestion of trucks that wants to load and unload. Besides it partly determines the dispersal of the workload at K+N (Schönleben, 2007; Apte and Viswanathan, 2000); as stated before the workload is not properly balanced at K+N.
7. To what extent influences work balancing the efficiency of the cross-dock process?
With respect to the workload balancing at K+N, this research found that the current workload not efficiently balanced. The fluctuating workload at K+N results in a less efficient operating cross-dock. Indicative for this inefficiency is quite often the workload which not matches with the capacity. Since the cross-dock of K+N has a limited capacity, the arrival of trucks can determine the workload (van Dijk, 2009). Hence, regularly there are congestions of trucks that want to load or unload; besides there is frequently congestion of products. In line with this, Apte and Viswanathan (2000) and Schönleben (2007) state that the smoothness of the process for truck arrival, and departure can greatly influence the efficiency of the cross dock process. In appendix E: “Workload distribution during the week” partly indicates that the arrival of trucks is not gradually distributed.
8. To what extent the efficiency of the physical facility design and layout influences the efficiency of the cross-dock process?
Although the literature shows that there might be a relation between the physical facility design and layout and the efficiency of a cross-dock process (Vogt, 2010; Krajewski and Ritzman, 2005); and several interviewees stated that there is a plausible relation between these factors. Nonetheless this research cannot prove there is a causal relation between these factors, due to the lack of time.
To conclude, the results have shown that the following factors have, to some extent influence on one or more steps of the cross-dock process:
Standardized products and unloading methods in the supply chain. Reliability and efficiency of suppliers.
Reliability and efficiency of customers. Expertise and reliability transporters.
5.2 Recommendations and further research
In order to keep overview the recommendations are grouped by the eight independent factors.
Products and unloading methods
I. Temporally stop the unloading process.
As stated in the findings, transporters can always unload at the unloading docks, even when the docks are completely occupied. Hence it is very demanding for K+N to properly operate in such situation. Additionally the transporters are not able to efficiently unload their trucks, since the docks are completely full. Therefore it might be a solution to temporally stop the unloading process when it becomes too crowded at the docks. When it becomes too crowded at the docks a signal has to be given to the entrance. In turn the employee(s) at the entrance can close the entrance until a signal is given when the docks are workable again. It is plausible that temporally stopping the unloading process will contribute to a higher efficiency, since the flow at the docks is less disrupted by the crowdedness. Further research must show when to stop the unloading process and how exactly this suggestion must be implemented.
II. Using timeslots.
Currently K+N allows transporters who arrive deviating from the planning, even when the transporters are a way too early or too late. When transporters arrive deviated from the planning it has barely consequences for the transporters. Since K+N has barely control over the arrival of trucks, it is hard for K+N to control their workload. In order to balance the workload of K+N using timeslots might be a solution. Using timeslots at K+N might contribute to control the arrival of trucks. Research of “Plus Retail” showed that using timeslots at their cross-dock contributed to a higher efficiency. Besides using timeslots the loading process dropped significantly (Jorritsma, 2011). By implementing such a concept with timeslots, transporters have to arrive within a certain timeslot. For example when a truck is planned to arrive at 13:00 hours, the truck has to arrive between 12:45 and 13:15. When the truck arrives not within this timeslot, and there is no space available, the transporter has to wait until a slot is free. However when the transporters arrives on time to pick the customer orders, the order is ready to pick up. Since K+N knows when to put ready a certain customer order.
Suppliers
III. Standardize the incoming products.
Suppliers deliver quite often rolly’s with products on a non-standardized and inappropriate manner. Products i.e. rolly’s are called non-standardized and inappropriate when a rolly contains products of several types or it contains a deviating amount of products. When customers deliver products on such manner, the employees have to sort and level these rolly’s. Hence K+N is saddled with unnecessary actions. Therefore K+N should make agreements with her suppliers with respect to standardizing the way of delivering products, in order to improve the efficiency of the cross-dock (Hill et al., 2009). Suppliers should deliver products on such manner K+N can process them easily and without doing unnecessary actions and movements. Hence, suppliers should not combine several types or sizes of products on one rolly.
To ensure that the incoming products are standardized, K+N should make agreements with their suppliers. However there is a possibility that the suppliers are unwilling to cooperate. To prevent that, K+N should properly explain the advantage for suppliers. The advantage for the suppliers is as following: if suppliers deliver standardized products, K+N can process products more efficiently, as result suppliers are able to send more products in less time.
Customers
IV. Keep the amount of products in the buffers on a more constant level.
Transporters
V. Standardize the unloading methods.
According to Maknoon and Baptiste (2009) the unloading methods used by the transporter influences the efficiency of the cross-dock. Revealed from this study is that the current delivery methods are not standardized and therefore the efficiency of the cross-dock process is negatively influenced. In order to enhance the efficiency of the cross-dock process, K+N has to make sure that the transporters unload the products on a standardized manner. Hence, a suggestion is that the transporters unload their trucks on such manner that K+N is able to easily transfer and handle the products. In order to ensure that the employees of K+N do have to do unnecessary actions, the transporters should presort the product per product type and put the products on a standardized manner on the unloading docks. Therefore K+N should make agreements with the transporters about standardizing the unloading methods.
However there is a possibility that the suppliers are unwilling to cooperate, to prevent that, K+N should properly explain the advantage of transporters. The expected advantage of the transporters is, if they unload the products on a standardized manner, the transporters can unload their products more quickly, despite the fact that they have to do more actions. As a result K+N has a decreased risk on jams and the possibility of a congestion of products is dropped. Subsequently, K+N can handle the products more efficiently and therefore K+N can handle more products. Nonetheless, what the most appropriate unloading method is at K+N and how exactly this suggestion must be implemented should be further investigated.
Management and employees
VI. Solve problems on a structured and profound manner.
activities which do not add any value should be eliminated in order to enhance the efficiency of the cross-dock process (Goldratt, and Cox, 1992; Krajewski and Ritzman, 2005).
However, analyzing and improvement of the cross-dock process requires a certain set of analytical skills. When K+N wants to continuously improve their cross-dock activities, K+N should be able to conduct such a process analysis and process improvement. Therefore it is advisable for K+N to invest in process improvement, in order to enhance the efficiency of the cross-dock process. For example, by training and educating managers and (some) employees in process improvement.
Information (systems)
VII. Make clear and complete procedures.
As soon as the processes are as efficient as possible, the related procedures must be established. Currently not all the procedures and processes at K+N are described. In turn (especially new) employees, make unnecessary mistakes. The study of de Snoo et al. (2011) state that procedures are needed in order to prevent unnecessary coordination and enhance efficiency. Since the output of information systems is highly dependent on the input of the information system (Sauer, 1995). Besides the input of information systems is highly dependent on the person who is gathering and entering the data and the source of the data (Koh and Watson, 1998). Therefore it is advisable for K+N to register all the important processes and its sub-processes. Besides the procedures have to be complete, clear and up-to-date. Moreover K+N has to make sure that employees work according to these procedures. According to Degani and Wiener (1994), well-designed procedures should unambiguously address six steps. These six steps can be used to complete, or update the procedures, the six steps are:
1) Identify the task.
2) When the task is conducted (time and sequence). 3) By whom the task is conducted.
4) How the task is done (which actions) 5) The sequence of actions to be followed.
6) What type of feedback is provided (callout, indicator, et cetera)
Work balancing
VIII. Balance the workload.
trucks or is lacking with processing the products. Therefore the workload is often not balanced. In order to increase the efficiency, the workload should be balanced (Apte and Viswanathan, 2000 and Schönleben, 2007). Several options are possible, some suggestions are stated below. The first option is enhancing the capacity; for example hiring more employees on the demanding times at K+N. However properly scheduling the right amount of the employees, the right information about the upcoming workload is required. Moreover a workload / employee ratio have to be determined in order to know how many employees are needed, therefore some standards have to be made. Nonetheless this requires also flexible employees, since the workload often fluctuates. The second option is that K+N optimize the arrival of trucks in order to spread the arrival of trucks (workload balancing). To achieve this K+N has to make clear and complete agreements with their customers, transporters and suppliers about the arrival of trucks. Besides K+N has to be familiar with their current capacity. Moreover K+N’s customers and suppliers have to be familiar with their capacity and their demand as well. The last suggestion is to combine the first two options. Also to achieve this option, agreements have to be made with the suppliers, customers and with the transporters regarding the planning and about how to execute the plan properly. To succeed this it is important that K+N properly explain the benefits of the involved parties. When K+N has a more balanced workload, K+N is able work more efficiently. An efficient cross-dock is beneficial for the cross-dock based supply chain (Vogt, 2010).
Physical facility design and layout
IX. Further research.
5.3 Priority of the recommendations
This study provides nine recommendations, as described in section 5.2. However, the last recommendation: “Further research of the influence of the physical facility design and layout” describes only that further research is need. It does not describe any actual improvement to enhance the efficiency of the cross-dock process. Therefore this “recommendation” is not taken into account in the section below. Hence, the following eight recommendations remain:
I. Temporally stop the unloading process. II. Using timeslots.
III. Standardize the incoming products.
IV. Keep the amount of products in the buffers on a more constant level. V. Standardize the unloading methods.
VI. Solve problems on a structured and profound manner. VII. Make clear and complete procedures.
VIII. Balance the workload.
Not all the recommendations can be implemented in once, therefore there has to be decided which recommendation has to be conducted first. Decisions are often based on personal preferences and are influenced by external factors (Aspel et al., 1998). In addition, there could be multiple personal preferences. Hence, it is hard to achieve an optimal trade-off. Besides uncertainty, vagueness and the unstructured character of the decision making process are for that reason important factors why decision making processes can be rather complicated (van de Water and de Vries, 2006).
K+N defined the following criteria:
C1. Long term improvement of the cross-dock process efficiency. C2. Enhancing the customers satisfaction.
C3. Feasibility of the recommendation.
The pair-wise comparisons of the recommendations and the criteria is judged based on the scale developed by Saaty (1980; 1994). Hence the following scale is used when defining a ranking between two criteria and recommendations:
1: Equally preferred. 3: Moderately preferred. 5: Strongly preferred. 7: Very strongly preferred. 9: Extremely preferred.
The even numbers (2, 4, 6, 8) are used in case a hesitation or when a compromise needed. When a 9 is allocated to the comparison of C1 and C2, the preference goes unquestionably to C1. Hence, when a 1/9 is allocated to the comparison of C1 and C2, the preference goes unquestionably to C2.
Comparing different criteria to each other is a starting point of the AHP model. Subsequently, the recommendations are compared to each other pair wise for each criterion. Afterward, the AHP model will be applied to prioritize the recommendations. The procedure of the AHP model is further explained and elaborated, amongst other by van de Water and de Vries (2006); Vassou, et al. (2006) and by Saaty (1994). Detailed mathematical background of the model is described by Saaty and Vargas (1982). In order to get appropriate data, the following questions were asked to two managers of K+N:
Which criterion is more important to you in order to prioritize the recommendations, Criterion I or Criterion J (I,J = C1, C2, C3) and to what extent?
Which recommendation has more effect on Criterion i (i = C1, C2, C3), Recommendation X or Recommendation Y (X,Y = I,II,III,IV,V,VI,VII,VIII) and to what extent?
According to the calculations of the AHP model, the following ranking of the recommendations can be stated:
Priority Recommendation Weight
1 VI. Solve problems on a structured and profound manner 0,236
2 VIII. Balance the workload 0,216
3 VII. Make clear and complete procedures 0,165
4 II. Using timeslots 0,118
5 V. Standardize the unloading methods 0,095
6 III. Standardize the incoming products 0,092
7 I. Temporally stop the unloading process 0,053
8 IV. Keep the amount of products in the buffers on a more constant level 0,027
