[3537]

Cross-docking in retail logistics

Date:
February, 2016
Prototype:
proto$ gen VI mod 3FFECA (Londinium)
Customer:
Ulmart.ru
Cross-docking is usually perceived to be a part of big business or some transcontinental routes. However it allows to cut costs in any retail company.

Ulmart’s retail deliveries in big cities follow a standard scheme: the vans are loaded at a suburban logistical hub and drive into their respective delivery sectors.

However, in Moscow, a huge agglomeration with a Kafkaesque organization of its road network, it can’t work so smoothly.
Wherever the distribution warehouse is located, there will always be a neighborhood that is at the city’s other end (whether inside the Ring Road or beyond) hard to reach "if you ride for three days", as Gogol put it: your delivery vehicle will take half a day to get there, half a day to return, and no time will be left for the value creation stage proper — taking the goods to the customers, issuing the orders and collecting the money.

For Ulmart, with its Suburban Distribution and Order Execution Centre located in the town of Domodedovo outside Moscow, the area around the Voykovskaya Metro station became such a hell of a place — located at the opposite end of the agglomeration and very luckily surrounded by railways, lakes and other "friends of the driver".
A one-way ticket™, in short.

 

But there is a big Ulmart store there.
Of course, also supplied with goods from the same distribution warehouse.

The Ulmart logistics guys (inspired by common sense, unlike the classic), decided that it was irrational to send two fleets of vehicles to such an AH (one loaded with goods for the shop, and another, with retail deliveries).
It was more reasonable to load the whole thing — both the shop’s assortment / product range replenishment stock and the goods ordered for home deliveries in the district — onto the same trucks and then to forward the latter from the shop, on other vehicles.

But another question immediately arises: the goods flow intended for the shop is processed in a strictly standardized way, with acceptance followed by distribution into stock bins and to addresses.
And then, for orders from retail / corporate customers" orders newly registered and paid (via the store’s salesman or the website), the goods are assembled, brought to the issue counter and handed out to the buyers.

But for goods brought from the central warehouse to be forwarded for home deliveries, this scheme’s acceptance, pigeon-holing and re-assembly stages are obviously redundant. This is purest muda.

Here’s what pure muda looks like:

In a streamlined procedure, the goods already ordered for delivery must arrive at the shop assembled and packed into their individual orders" boxes, so that they can be offloaded, accepted by "pieces", not goods items, and reloaded onto small pick-up vans for retail deliveries.
But to permit this, the warehouse IT system should be able to (a) distinguish between the two goods flows and (b) work with the "cargo piece" (container) abstract unit.

And, what is damn specific, dia$par can do both.

Now goods ordered for delivery from Ulmart to that "cursed place" can be concurrently reserved at both warehouses: some at the hub and others, at the store.
The delivery order’s portions assembled at the hub travel to the store ready for shipment and supplied with documents for the customer.
Additionally assembled at the store itself are the portions earmarked at the local warehouse; these are added to the ready and packed "cargo pieces" from the hub and then taken to the local addresses.

The same picture, but with the muda crossed out.

The Science term for the above process is cross-docking.

Geography and geometry are the exclusive domain of God, and we can do nothing about them.
But a combination of common sense and dia$par will relieve many of the retailer’s worst pains in the ass.

Being inside dia$par. Some stories
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