Impacts op implementing a retailer cross-dock on the Western Europe Procter & Gamble supply chain, by Erick Wesche (with Procter & Gamble)
June 9, 2013
This master thesis describes the different types of cost impacts that result from the move from a traditional supply chain with the retailer distribution center holding stock, to a cross-dock supply chain, where the retailer does not hold any stock. This research is divided into two parts. The first aims to understand what are the main factors that will change when moving to cross-dock across three echelons: Supplier DC, Retailer DC, and the Store, as well as the transport between them. Then it maps out how the main factors may interact with each other under different circumstances. The second focuses on the impacts moving to cross-dock will have on the product availability at the store under different network configurations. It is concluded that for a fast moving consumer goods / retailer supply network set-up in Western Europe, the supplier moving to a cross-dock type of distribution presents mainly an end-to-end cost increase for the supply chain, with costs being reduced at retailer’s side, and increased at the supplier’s side. The current situation of rounding the aggregate of store’s orders to full pallets and full trucks in order to achieve handling and transport efficiency in most cases delivers a better cost than the savings incurred by reducing stock at the retailer to zero and not rounding orders. It was also found that moving to cross-docking will likely have a negative impact on availability on the shelf if current store inventories stay the same.