This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Cross Docking involves efficient synchronization of inbound and outbound trucks to achieve zero inventories by zero or minimum storage time. Fig.1 depicts a schematic representation of the material handling operations carried out at a cross docking terminal.
Fig 1. Material handling in a cross docking terminal
Nils Boysen, Malte Fliedner, Armin Scholl describe a cross docking technique based on simplifying assumptions in their paper on "Scheduling Inbound and Outbound Trucks at Cross Docking Terminals". The Inbound semi trailers are either directly assigned to an unloading entrance upon arrival, or have to wait in a queue on the yard until they are assigned. After the inbound trucks are docked, their contents are unloaded and scanned to classify their respective delivery points. Then these products are conveyed using mechanized tools like a manually operated fork lift or conveyor belt system to their designated outbound shipping door and discharged in front of the outbound trailer and then loaded onto it. This course of action repeats for other trailers.The efficiency of such a system depends critically on the appropriate coordination of inbound and outbound flows, e.g. by computerized scheduling procedures. The paper on hand deals with the truck scheduling problem, which generally comprises the assignment of each inbound and outbound truck to a door of the dock and of determining the schedule of all trucks assigned per door. Thus, the respective dispatcher faces two interrelated decisions: where and when the trucks should be processed at the terminal. This scheduling task has to consider additional constraints, because an outbound truck can be processed not until all required products have been delivered by their respective inbound trucks. Thus, to reduce the delay of shipments at the cross dock, a synchronization of inbound and outbound product flows becomes crucial. This general claim for synchronization can be operationalized by minimizing the total completion time of an operation, which is also referred to as makespan.
Case Study of Cross-docking facilities
Eastman Kodak Company is primarily engaged in developing, manufacturing, and marketing imaging products and services for consumers and commercial customers. In 2003, the company identified an opportunity to improve the inbound-material flow from suppliers to its manufacturing facilities in Kodak Park, Rochester, New York. At that time, some of its inbound material was moving as less-than-truckload (LTL) shipments directly from suppliers to plants. Other materials moved as full truckload shipments from suppliers to a local area warehouse, where they were stored and then shipped by truck to the appropriate manufacturing facility.
A critical review revealed an inbound-material flow that was ineffective and inefficient. Five problems in particular were evident.
Each plant was managing material movement from common suppliers independently. As a result, material managers could not take advantage of transport-consolidation opportunities. Because some suppliers selected the carriers and controlled inbound movement, Kodak had no control over these shipments. As a result, unscheduled material deliveries were being made at the warehouse and plants. This caused poor utilization of material-handling labor and floor space at all facilities.Inventories were not visible in-transit, which made production scheduling much more challenging and, at times, negatively affected production operations.Order-cycle times were long.In some cases, suppliers held shipments until they had a full trailerload. Although this practice resulted in lower transport costs, it also increased leadtimes and inventories. Consequently, Kodak had high inventory levels at the warehouse and plants, which resulted in congested facilities and high inventory-carrying costs and storage costs.
Clearly, Kodak had an opportunity to develop a leaner inbound-material supply chain.
Kodak Sets Objectives
In pursuing that opportunity, Kodak used the expertise of Transfreight, a lean cross-dock specialist. Transfreight was formed in 1987 as a joint venture between TNT Logistics and Mitsui Trading Company to provide sole logistics support for all inbound part movement to Toyota's North American assembly plants. The Kodak-Transfreight project team developed a pilot project that replaced an existing warehouse with a lean cross dock that utilized planned milk runs.
The project team began by educating employees about the application of TPS principles to a supply chain. Then, the team developed project objectives based on thorough discussions with Kodak managers in production, purchasing, and logistics. Viewed in the context of the TPS pillars, the specific objectives were:
Decrease order-cycle time.Decrease plant inventory levels.Decrease plant storage-space requirements.
Improve visibility from scheduled pickup at suppliers to delivery of materials at plants.Have visual control of shipments at cross dock.Continuously improve supply chain performance.
Create employee-empowered, team-oriented problem solving.
Create a stable, repetitive material flow.Decrease inventory dwell time at cross dock.
Supply Chain Costs
Decrease inbound-material supply chain cost.
From Goals to Action: Cross-Dock Implementation
Prior to the cross dock's start-up, the Kodak-Transfreight project team took four preliminary actions. These efforts involved: (1) selecting a subset of suppliers and materials for the project, (2) choosing a cross-dock location, (3) developing appropriate information systems, and (4) reorganizing the company's transportation systems to support lean cross-dock operations.
Three Kodak film and photo processing plants in Kodak Park agreed to participate in the pilot project. From the list of suppliers that shipped materials to all three plants, the project team selected three suppliers for the pilot: a paper supplier providing bags for photo-finishing paper, a coated-metal supplier providing metal parts for the photo film canister, and a plastics supplier furnishing containers for photo chemicals. The team chose these suppliers because they had a good relationship with Kodak, provided a relatively high and steady volume of materials to participating plants, and were in close proximity to these plants.
Next, the project team selected the cross-dock site. The team chose a warehouse facility in Kodak Park that fed materials to the plants involved in the project. This site had to be useful for the pilot project and viable as a long-term cross-dock site. It had to be capable of handling the material flow required to support many Kodak plants in Kodak Park. The site selected fit all these requirements.
A successful lean cross dock requires fast, accurate, and timely material order information. Accordingly, the project team developed a plan for how and when order information should be sent between the plants, suppliers, and the cross dock. In addition, the team ensured that the information technologies employed by all supply chain partners were compatible and capable of fully supporting a lean cross-dock operation.
Finally, to accommodate a lean cross dock, Kodak needed to change its transportation operations. First, the project team, with the aid of corporate purchasing, gained control of the inbound-materials transportation from the selected suppliers. Second, routes were designed and carriers selected for milk runs from suppliers to the cross dock and from the cross dock to plants. Third, the team developed a cross-dock layout and design. This involved the development of designated staging areas for shipments received from suppliers and plant-specific kanban squares for deliveries. Additionally, the cross dock incorporated kanban cards (tickets) for tracking shipments at the cross dock and signs to label cross-dock locations.
After completing the preliminary stages, the project team selected a start date and communicated procedures for ordering, pickup, and delivery as well as route plans to all parties. With these changes, Kodak was able to open up its cross-dock facility 20 weeks after the project inception.
Going Lean Produces Results
Kodak's move from a traditional warehouse to a lean cross-dock operation produced significant improvements in supply chain effectiveness and efficiency. Key performance indicators for each of the objectives provided evidence of the project's success.
Just-In-Time. The lean cross-dock operation resulted in scheduled inbound-materials movement from suppliers to the cross dock and from the cross dock to plants. By controlling inbound-material flow, the project team was able to reduce the inbound-material order-cycle time from seven to two days, a 71-percent decrease.
Because Kodak is now pulling materials to production from suppliers as needed, inbound-material inventory levels at the plant decreased by up to 76 percent, from approximately a one-week supply to a one-day supply. One production department, for example, was able to remove 130 pallets of raw material during the first week of the project. Thanks to the shrinking plant inventory levels, the plant-floor space required for inventory storage also decreased by up to 50 percent. Finally, the more level, rhythmic (heijunka) delivery of materials reduced dock congestion at the plants.
Quality. The project team improved Kodak's control of shipments both by replacing LTL shipments with scheduled, dedicated milk runs and by using kanban squares at the cross dock. The result: Kodak's inbound-material shipment visibility improved from zero to 100-percent. Better shipment visibility, in turn, facilitated better problem identification and improvement. In addition, daily, regular routines and visibility checks (poka-yoke) made abnormal situations very obvious, which meant they could be addressed immediately. Finally, key performance indicators (KPIs) that focused on supply chain operations were tracked and used to make improvements.