Milk run logistics: what it is and how it works
In logistics, the milk run system is a method of shipping goods used to transport stocks and raw materials from different suppliers to a single destination. It is an efficient logistics process, a real strategic tool for managing deliveries, and a great ally of warehouses that will never be overstocked or understocked.
Let’s see together what the term “milk run” means and how the application of this method works in logistics.
What does milk run mean? The “milk run” in contemporary logistics
Nowadays, in a world increasingly focused on production and consumption, the cost of transportation cannot be neglected. For this reason, it is crucial to optimize shipments by organizing trips in such a way as to fully load the vehicle. As a result, more and more companies are working by following the philosophy of full-truck shipping, but without understanding its limitations: on the one hand, the customer may be oversizing his supply needs, and on the other hand, the supplier may only be interested in filling the vehicle.
It is in this context that the milk run, a strategic alternative for replenishment logistics, is developed. To understand what this is all about, however, we need to take a trip back in time, more specifically to the 1960s in the United States. Families used to leave empty milk bottles outside the door, which were promptly refilled with fresh milk so that they would never be without or overstocked. This is the rationale behind the milk run: managing raw materials according to a useful method that allows the real needs of the stock to be met and delivery to be organized from a Just in Time perspective.
How the milk run process works in logistics
The milk run method in logistics allows companies specializing in transportation to make multiple pickups and deliveries to different suppliers. But how does such a process work?
First, to make transportation efficient and avoid loaded vehicles, milk run logistics requires planning that takes into consideration the route to be taken, different intermediate stops, and delivery times. This will help to assess the most efficient route, greatly reducing transportation costs.
Once the planning is defined, the milk run process comes into motion: the vehicle travels to the suppliers’ warehouses to pick up the load, which will then be transported to the various destination areas, according to the defined route and within the established delivery time.
What are the benefits of the milk run system?
The main goal of milk run logistics is to carry out a lean production process that keeps the number of inventories low, limiting waste. Not only that, with this system the benefits are many:
- It improves stock logistics, as having only the right amount of goods on hand saves space and optimizes storage;
- Involves a reduction in transportation costs because it is planned in such a way that one vehicle can pick up different loads and deposit them at the same end point, without each supplier shipping the goods on their own;
- Environmentally friendly because optimizing transportation has a major impact on reducing CO2 emissions.
For a business, therefore, implementing milk run management could bring several advantages in terms of economics and coordination of production resources, greatly improving its performance. If you think your business might require such an approach, contact us; we at C.T.I. International Forwarder are available to provide you with the most effective transportation solutions in line with your business.