Why Include Warehouse Operations in Routing?
Warehousing processes are key to the distribution of goods and optimizing warehouse operations is crucial to guarantee cost reduction and the efficiency of your company. To this end, this next article will introduce an important player in the routing and logistics scenario: the scheduler.
You might ask why, in many cases, building docks and having teams operate/load multiple docks is an expense. If you can have less docks and occupy less of them, all your costs go down, especially labor costs. Therefore, you should optimize the docks to use them at every moment in time. This has implications on the routing because you will have to start certain routes earlier or later without breaking the many restrictions you have on that side and you have to have a very well-oiled warehouse to actually make the times you are planning.
Two levels of the same problem
Dock scheduling or site logistics are two levels of the same problem: how to optimize logistics after the trucks pass the gate and they need to get loaded and unloaded? Historically, drivers were called at the earliest possible time so they would be available for when the warehouse was ready to load. This is having a massive overhaul because labor costs are going up and someone also has to pay for the trucks and trailers that are idle.
Therefore, two models were developed: firstly, having site drivers who drive the trailers and trucks around on site to make them as fast as possible and secondly calling the trucks exactly as they are needed according to the route planning. Both models enormously reduce costs and have had good effects. They both need enormous coordination, because trailers need to be available and trucks need to come in at the exact right time.
This has led to the evolution of this field to optimize docks. Currently the dock is assigned on the feasibility of the route and the availability of the dock. In the future, it will result in an exact plan of when each warehouse action will take place to coincide with the exact time when each truck or trailer will be at each allocated dock without breaking any customer/legislative restrictions.
Assigning a first dock is simple, it is available at the time needed for the route to load and start. The second one already becomes harder unless there are multiple docks available. Let’s start with a first example: there are four docks and twenty routes that are all planned to leave between 6am and 8am, and each loading action takes one hour. You allocate the first four docks to the most difficult routes, which are the ones with the most restrictions. Then the next four will be routes that leave before or after. This way you can allocate twelve routes, but you still have eight left. These eight routes should be the least restricted routes. The ones that are fillers (with less orders/more flexibility) in your plan or that have slack along the way – like customer time windows that only start at 12h, or can receive the whole day – can be shifted, making sure you smooth as much as possible the work in the warehouse and keep everyone on normal eight-hour shifts.
In the future, we will see much more intermingling of production planning with the warehouse and route planning. Production will be scheduled based more and more on customer orders, with warehouse capacity already allocated and routes created, having 90% of planning done at a level that is efficient for production. Making site logistics pivotal in bringing the two worlds together and reducing costs for everyone.
Dock scheduling and site logistics have come a long way from a blackboard planning to currently mostly excel, to going full optimization. Currently we see the allocation of docks but in the future we expect full integrated planning of production warehouse and delivery.