What is Milk Run System : Transportation Definition

Milk Run Systems is a Delivery method for mixed loads from different suppliers. Instead of each of several (say 5) suppliers sending a vehicle every week to meet the weekly needs of a customer, one vehicle visits each supplier on a daily basis and picks up deliveries for that customer. This way, while still five vehicle loads are shipped every week, each vehicle load delivers the full daily requirements of the customer from each supplier. This method gets its name from the dairy industry practice where one tanker collects milk every day from several dairy farmers for delivery to a milk processing firm.

There are two different types of the milk-run:
1. in-house milk run: the goods will be send to the production from a central supermarket
2. interplant milk run: different suppliers send the goods to the production
*The standardized batches, routes and time tables are helping the company to reduce the complexity of their logistic system. There are relevant savings possible.

A formal approach for specifying and reasoning about earth-friendly logistics management systems is presented. To reduce fossil fuel consumption and carbon dioxide emissions resulting from transport, we must enhance the transport efficiency of trucks, which play an essential role as carriers in modern logistics services. This paper addresses the milk run systems approach. It is one of the most effective and popular solutions to this problem, but it makes it be complicated to implement in a logistics management system. We propose a language for specifying the routes of trucks and an order relation between the requirements of routes and the possible routes of trucks. The former is formulated as process calculus and the latter selects suitable trucks according to their routes.

Concept :
- Need to establish logistics network supporting Just-In-Time (JIT) production parts procurement.
*The milk run concept or also often called milk bottle concept is a system of the procurement logistics and distribution logistics to ensure that goods are available when at the time when they are needed. A model for this system was the traditional milk supplier, the “milkboy” in the United States and England. The milkboy only provides a new bottle if he could take an empty bottle. So it was ensured that there is not too much milk in the house. The Basis of this concept is that there are only as much units filled as were used in the production. The batch size normally is fixed one time and there is also often use of the Kanban system. The restocking circle is also fixed previously.

Solutions :
- Organize milk-run collection from parts vendors according to production plan and purchasing order.
- Cross-docking
- Just-In-Time (JIT) deliveries into manufacturing plant.
- Exceptions management , such as delays and miss-shipments, and organizing special response.

Benefit :
- Small lot size-High frequency deliveries to achieve reduced inventories.
- Better truck utilization.