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 neighbourhood 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, Ultimate 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 Scientese 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 Ultimate IEM will relieve many of
the retailer’s worst pains in the ass.