Milk run help optimize transportation and production. Toyota motor can operate efficiently by increasing the frequency of runs to multiple suppliers, which reduces the lot size of each move, allowing Toyota to fill trucks. The Toyota know they have to sacrifice some mileage, but the benefits are steady and level flows of material and higher order frequencies.
"It's really a Milk Run operation. The inbound material is received and empty shipping containers are sorted and loaded for outbound logistics heading back to the suppliers where we dispatch those trucks out for another pickup coming in", "We don't want to run empty dead-head trucks without optimizing container returns in support of our logistics plan."
As Toyota's 3PL Logistics, VASCOR plays a dual role. "We are one of Toyota's transportation operators, as well as one of its crossdock operators," says Jim Brutsman, general manager of business development for VASCOR.
"Typically, Toyota gives us a month's worth of Toyota milk run Logistics routes to operate, all in the framework of lean manufacturing and a Just in time (JIT) environment," he says. "It's an intense schedule—Toyota measures us by our ability to operate within 15 minutes of the scheduled time."
VASCOR assigns routes to partner carriers and its milk runs employ 580 team and single drivers and 375 tractors. "On an average day for Toyota, we cover the equivalent of seven trips around the equator," Brutsman says. "And while we are making those trips, every 80 seconds one of our trucks stops to deliver returnable containers and pick up parts."
Routes are structured precisely, to and from the plant as well as to and from the supplier. If a driver encounters an exception, VASCOR's centralized communications center is advised immediately. "Then we have to inform quite a string of Toyota personnel," Brutsman says.
VASCOR employs GPS tracking of its milk-run fleet and its sequenced delivery drivers use Nextel wireless communications. These sequenced situations are time-critical because of the distances involved and the precise sequencing of orders, loading, delivery, and entry to the production floor.
"Sequenced deliveries are complicated and well-orchestrated exercises of matching the right part with the right car at the right time," Brutsman says.
Transportation strategy should not drive how and when product is delivered. Rather, customer expectations need to be fully understood, and transportation strategies must be developed to meet these expectations with optimal inventory levels. Transportation strategy and tactics must support Lean inventory strategies. This will undoubtedly change the transportation methods of the organization. For example, a focus on truckload movements and transportation load building based on economies of scale may not support the customer experience. Products are generally not consumed by the truckload or even a skid at a time. Rather, small quantities are often preferred to meet consumption needs. Lean transportation means proactively reviewing transportation modes, matching mode to inventory strategies and customer expectations. Less than truckload (LTL) shipments are being replaced by frequent ground package shipments or multiple stop milk runs to gain control, visibility and delivery stability. Past paradigms of transportation “givens” must be rethought and reviewed to ensure that inventory and customer requirements are driving transportation methods.
Milk Run is one of the advanced delivery concepts that can improve your transportation management system. Milk Run Delivery means a routing of a supply or delivery vehicle to make multiple pickups or drop-offs at different locations on a regularly scheduled basis.