Abstract
The research’s primary objective is to highlight that cross-docking is highly efficient, effective, cost reductive, and timely. These advantages can be derived if proper optimization measures are undertaken with the use of precise technologies coordinating the movement and timing of the vehicles alongside concepts such as Just-in-Time. The major points covered include direct cost reduction through storage unit elimination or minimization, efficiency improvements through better timing and indirect resource efficiencies, and compatibility with other supply chain conceptual models. The assessment and analysis of the literature allow one to conclude that cross-docking has a number of key strengths with weaknesses, which can be negated or mitigated.
Introduction
It is important to note that cross-docking is a strategic framework in logistics, where the emphasis is placed on minimizing the storage and warehouse unit. It aims to coordinate movements and the transfer of goods between two key participants of the cross-docking process. These include inbound suppliers and outbound customers, where materials are directly loaded from incoming delivery vehicles into outbound delivery vehicles with the desired omission of warehousing practices. Cross-docking is highly efficient, effective, cost reductive, and timely if proper optimization measures are undertaken with the use of precise technologies coordinating the movement and timing of the vehicles. In addition, it can be incorporated with the minimization of its weaknesses through conceptual measures, such as Just-in-Time supply chain approaches.
Discussion
Critical Ideas and Arguments
The first critical idea in regard to cross-docking is manifested in the fact that such a strategy is cost-effective. It is stated that “cross-docking is a valuable supply chain strategy given that it offers several benefits, for example, reduction in inventory holding costs, reduction in transportation costs, and on-time deliveries” (Mavi et al., 2020, p. 13). In other words, the direct cost reduction and effectiveness are rooted in the minimization or complete elimination of warehousing units. Cross-docking aims to connect inbound and outbound transportation vehicles directly without an intermediary stage of unloading and reloading. Therefore, it is evident that the given framework significantly reduces the costs a company or organization needs to incur in order to run a storage facility for the goods.
The second critical idea is centered around the notion of time efficiency alongside the indirect costs of transportation as well as inventory. A study suggests that one can successfully implement a “mixed-integer linear programming model with the objective of minimizing the total operational costs that consist of inbound truck arrival penalties for violating contracted time windows, product delivery tardiness penalties, inventory costs and outbound truck transportation costs” (Zheng et al., 2020, p. 6579). The use of well-optimized technological control measures can reduce loading wait times, leading to fewer expenditures on inventory and transportation due to efficiency. The research provided is even more relevant due to its focus on cold-chain logistics, where materials are temperature sensitive. Maintaining low temperatures or temperatures different from the surrounding environment requires additional dependence of optimization, which is achievable by cross-docking. Since standard frameworks of utilizing an intermediary warehousing unit would spend additional resources on these conditional necessities, the supply chain strategy of interest is highly valuable in such a sensitive context.
Moreover, cross-docking improves efficiency in regard to timing and cost reduction through superior information management. It is also stated that cross-docking in both directions can “increase the efficiency of reverse logistics in terms of cost reductions, time savings, and improvement of information management in returns processes” (Zuluaga et al., 2017, p. 48). In other words, a key vulnerability of cross-docking, which is the reverse movement of goods, can be optimized to be as efficient as the one-directional version by integrating a linear programming model. However, the latter needs to operate in an environment where the forward flow is significantly higher than the reverse movement of materials.
The third critical idea is that the effectiveness and efficiency of cross-docking can be boosted without compromising the system’s resilience in both directions. The main reason is that “applying cross-docking in forward logistics has been recognized as an important field of performance improvement, however, approaches to consider this strategy in both forward and reverse contexts (simultaneously) are far lacking” (Rezaei & Kheirkhah, 2017, p. 495). However, the latter vulnerabilities can be addressed by the use of multi-product supply chain networks, where both structural frameworks work in conjunction. It is stated that cross-docking can “minimize the size of the vehicle fleet required to deliver all part containers within their given JIT intervals and without violating the vehicles’ capacities” (Schwerdfeger et al., 2017, p. 1). In other words, the Just-in-Time supply chain concept can greatly mitigate the major weakness of cross-docking by using fewer delivery vehicles with a focus on precision in timing, which relies on technological coordination.
Personal Experience/Observation and Real-World Application
As a customer, it is common to experience a mismatch or imbalance when it comes to the delivery order against the return of particular goods. The former usually takes significantly less time compared to the latter. The given observation is also true when working as an employee in a small or medium-sized business, where products need to be ordered and returned if a client wants to return them due to reasons unrelated to the business’s performance. For example, when it comes to a business model where clothes are ordered in bulk for a customer, but he or she will most likely purchase only a small fraction of them by trying them on, the return process needs to be as quick as forwarding orders. Therefore, cross-docking can be utilized in conjunction with Just-in-Time supply as well as linear programming models to ensure that the flow of goods between inbound and outbound vehicles is well-coordinated. The company I worked for heavily relied upon such a supplier, which utilized a properly optimized cross-docking model in both directions, which provided a significant competitive advantage to it and to my employer.
Conclusion
In conclusion, it is important to note that cross-docking is highly efficient, effective, cost reductive, and timely if proper optimization measures are undertaken with the use of precise technologies coordinating the movement and timing of the vehicles alongside concepts such as Just-in-Time. Firstly, cross-docking directly reduces costs and improves the effectiveness of storage elements since it aims to minimize its role or completely eliminate its presence through coordinative management. Secondly, the given strategy provides efficiency in timing, which also translates to indirect resource efficiencies. Thirdly, the cross-docking’s core problem can be fixed with conceptual models to be able to manage two-directional flow even if they are equally significant. Therefore, companies should consider cross-docking as a valid logistics strategy in order to reduce costs, increase efficiency, and eliminate tardiness in the supply chain management process.
References
Mavi, R. K., Goh, M., Mavi, N. K., Jie, F., Brown, K., Biermann, S., & A. Khanfar, A. (2020). Cross-docking: A systematic literature review. Sustainability, 12(11), 1-19.
Rezaei, S., & Kheirkhah, A. (2017). Applying forward and reverse cross-docking in a multi-product integrated supply chain network. Production Engineering, 11(4-5), 495–509.
Schwerdfeger, S., Boysen, N., & Briskorn, D. (2017). Just-in-time logistics for far-distant suppliers: Scheduling truck departures from an intermediate cross-docking terminal.OR Spectrum, 40(1), 1–21.
Zheng, F., Pang, Y., Xu, Y., & Liu, M. (2020). Heuristic algorithms for truck scheduling of cross-docking operations in cold-chain logistics.International Journal of Production Research, 59(21), 6579-6600.
Zuluaga, J. P. S., Thiell, M., & Perales, R. C. (2017). Reverse cross-docking. Omega, 66, 48–57.