The milk run concept
The milk run concept is a method for optimizing inter-company procurement logistics, often used in conjunction with just-in-time production. Based on existing consumption values, a logistical supply cycle is defined in which goods or empties are delivered on fixed routes at specific times and received at the same time. Internal transport can also be optimized based on the milk run concept.
The idea behind the milk run concept
The basic idea and the name are based on the principle of the traditional American milkman who delivered milk to households. The milk supply was based on the available empties, so as much milk was always delivered as was consumed. The empties were picked up at the same time and delivered to the head office.
The inter-company milk run
In today’s materials management, a milk run is a delivery concept in which a client commissions one or more transport companies to deliver to different suppliers/customers one after the other in the form of a transport cycle. In this cycle, goods or empties can be delivered and picked up simultaneously without consolidating them at a central point. The aim is to have a truck that is always filled to the maximum and as few empty runs as possible. The routes as well as the delivery times are planned in this cycle so that warehousing at the connected companies can be kept to a minimum.
Advantages of the milk run concept
- Shorter transport times, fewer handling operations and therefore lower transport costs
- Just-in-time delivery possible
- Predictability thanks to fixed time windows
- Less capital tied up due to smaller inventories
- Disposal logistics can be included in the cycle
- Sustainability through ecologically more sensible transportation routes
Challenges of the milk run concept
- Very time-consuming planning, as transport volumes, delivery windows, driving times, etc. must be taken into account
- The goods in the process require constant demand
- Weather conditions and traffic obstructions can have a negative impact
- Only economically viable from a larger radius
- Reliable suppliers must be found
The internal milk run
Both in intralogistics and in the manufacturing industry, the milk run concept can also be used internally. For example, certain required goods can be delivered to defined work stations on a regular basis, where there is a known (continuous) consumption. Empty tubs or packaging can then be disposed of on the way back. This ensures a continuous supply and at the same time reduces internal transportation costs. In addition, production and assembly lines can be linked in such a way that an automatic supply cycle is created via the internal material flow, thus reducing manual replenishment movements.
Further information on transport logistics can be found under Transport logistics – supply networks.
Image source: © Charles Dyer / License:(CC BY 2.0)