Definition – 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, it describes a logistics supply cycle in which goods or empties are delivered on fixed routes at specific times and received at the same time. Based on the milk run concept, internal transport can also be optimized.

The idea behind the milk run concept

The basic idea and the naming are based on the principle of the traditional American milkman who supplied the households with milk. The supply of milk was based on the existing empties, so as much milk was always supplied as was consumed. The empties were immediately picked up and delivered to the head office.

The inter-company milk run

In today’s materials management, milkrun is a supplier concept in which a customer commissions one or more transport companies to control different suppliers/customers one after the other in the form of a transport cycle. In this cycle, goods or empties can be delivered and received at the same time without consolidating them centrally. The goal is a truck that is always as full as possible and as few empty runs as possible. The routes as well as the delivery times are firmly planned in this cycle, so that warehousing can be kept small at the affiliated companies.

Advantages of the milk run concept

  • Reduced transport times, fewer transshipment processes and thus lower transport costs
  • Just-in-time delivery possible
  • Plannability through fixed time windows
  • Less capital tied up due to smaller inventories
  • Disposal logistics can be integrated into the cycle
  • Sustainability through ecologically more sensible transport routes

Challenges of the milk run concept

  • Very time-consuming planning, since transport volumes, delivery time windows, driving times etc. must be taken into account
  • The goods in the process require a constant demand
  • Weather conditions and traffic obstructions can have a negative impact
  • Only economically usable from a larger radius
  • Reliable suppliers must be found

The internal milk run

The concept of the Milkrun can also be used internally in intralogistics as well as in the manufacturing industry. For example, certain consumer goods can be delivered on a regular basis to defined workstations at which a known (continuous) consumption prevails. Empty trays or packaging, on the other hand, are also disposed of on the way back. This ensures continuous supply and at the same time reduces internal transport 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.

 

For further information about transport logistics see the article Transport Logistics -Supply Networks.

Image source: © Charles Dyer / License: (CC BY 2.0)

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