Asynchrony and Distribution Centers
Freight distribution is characterized by an asynchronous behavior, implying that supply and demand are never perfectly matched in time and space. A temporary buffer is thus required to bring a level of synchronism, particularly in light of the four main forms of asynchrony that challenge freight distribution:
  • Production and consumption. Both the supply and the demand can experience substantial fluctuations depending on the related supply chains. While large scale manufacturing processes are designed to provide a stable output, consumption is often characterized with daily, weekly or seasonal fluctuations. On the opposite, food production is commonly seasonal while demand is relatively stable. A distribution center can thus accommodate the fluctuations of production with the fluctuations of consumption. In recent decades the manufacturing sector has shown a growing level of agility; being able to cope with higher levels of fluctuations in consumption. As such, inventories tend to spend less time in a distribution center.
  • Shipment size. Because of economies of scale and intermodal integration, there is a tendency towards the massification of shipments to reduce transportation costs, particularly over long distances. Distribution centers are able to cope with the asynchrony of shipment sizes by begin able to consolidate or deconsolidate shipments. Transloading is an example of an activity focusing on using a distribution center to change shipment size.
  • Supply and demand. Contemporary sourcing strategies, the complexity of products and the variety of retail inventories often imply a diversity of suppliers, many of which located abroad (offshoring). The distribution center thus enables to reconcile the temporal and geographical asynchrony of suppliers and customers. For instance, a cross-docking distribution center is designed to synchronize a variety of suppliers and regional retail outlets. There are also uncertainties in supply and demand that require a buffer to deal with temporary disruptions in supply chains.
  • Market area. Distribution centers are supplied by different supply chains of various geographical extents (local, regional, global). Many distribution centers located at gateways reconcile the flows of global supply chains through inbound maritime and air cargoes, with regional flows. Alternatively, some distribution centers act as consolidation points of regional output, which is then distributed on global markets. They are thus means to reconcile freight distribution systems at different geographical scales.