Cross-dock distribution and operation planning for overseas delivery consolidation: A case study in the automotive industry

Abstract

One of the strategic objectives of supply chains in the automotive industry is the development of international sourcing. Renault works with a global network of cross-docking platforms to link distant assembly plants with first-tier suppliers. These platforms act both as information and physical consolidation points. At shop-floor, inland deliveries are received, sorted, repacked (if needed) and loaded onto containers for overseas transportation. Distribution and operation planning are key activities in such a cross-dock platform but despite its interdependency, current research considers them separately. This paper presents a detailed analysis of Renault cross-dock platforms called ILN (International Logistics Networks), their planning process and physical flows. An integer linear programming model to plan jointly the distribution and shop-floor operations in a cross-dock platform of Renault is developed. The objective is to minimize total cost composed of transportation cost (inbound and outbound), cost of internal resources and storage cost. Numerical offline tests of the model with CPLEX, based on real data for a number of past periods, have showed a 13% reduction of total cost. These encouraging tests confirm both the ability of the proposed approach to deal with real-size instances and the potential gains which can be obtained by considering decision related to distribution and planning together. Taking into account these results, the part of model concerning inbound logistics was integrated in the planning system used in a Renault ILN. The results of the first exploitation period have shown a reduction of 20% of inbound transportation cost comparing with the previous period without increasing the other costs.