What is Milk Run?

Legal Definition
A milk run, in logistics, is a round trip that facilitates either distribution or collection.

The terms are defined by the customer or by the service providers. Here, the exact number of suppliers, each of which defines the available volume and weight, and the time window for collection from the respective suppliers and the time window for delivery to the customer. With consistent planning, capacity increases to an average of 90% can be achieved.

On the round trips are either goods collected from several suppliers and transported to one customer, or goods collected from one supplier and transported to several customers. In contrast to the groupage traffic, there is no handling, except to transport the goods.

Something more specialist, the Milk-run is described as a concept that is a sequential collection of goods from multiple sources and the direct service to the customers without intermediate handling features of the goods. As a prerequisite for the Milk-Run approach is the spatial proximity between the supplier and the customer.

The procedure for development of a Milk-Run-Concept consists of the following steps:

  1. Fixation of weight and volume of suppliers in a particular region.
  2. Selection of potential milk run suppliers based on the maximum amount of charge, delivery frequency as although volume and weight limits.
  3. Selection of milk run suppliers because of the conditions and the milk run potential.
  4. Definition of milk run parameters to the weight and volume limits, time slots, delivery frequency and maximum number of Milk-Run-Suppliers.
  5. Development and evaluation of milk run alternatives.
  6. Specification of milk runs with respect to the fourth point under these parameters, plus the necessary contingency plans.
  7. Implementation of milk runs: Definition of a milk run schedule, conduct supplier workshops, testing and controlling.

The main benefit of milk runs is, according to common opinion in literature, in the higher utilization of trucks and the resulting reduction of transport costs by up to 30%. In addition, the reduction of stock, both at the supplier side and at the customer side, avoidance in delays at the loading ramp, due to the consolidation of several suppliers and the specified time windows, high security planning and integration of reusable container recycling.

The literature completely ignores the reduction of pollution of the environment, both by consolidation and the resulting higher utilization of trucks, and by the reduction of transportation vehicles, compared to JIT or groupage traffic.

The disadvantages of the Milk run are the following:

  • Not all suppliers are able to implement a milk run.
  • The increasing dependence on road conditions.
  • In the case of poor planning, the number of extra trips can increase, and lead to additional costs.
-- Wikipedia
Legal Definition
In the past, it meant an easy, simple delivery schedule. In current terms, it is a delivery method for different suppliers and mixed loads together. This method is from the dairy industry practice where one tanker collects milk each day from several dairy farmers for delivery to a milk processing firm. Rather than several suppliers each sending their own delivery, one central vendor picks up the deliveries from each supplier for the one customer. In this way, the customer receives the full loads necessary from each supplier, while each supplier provides all the needed supplies to the customer each day,