Milk –Run concept in logistics

A Milk Run, in logistics, is a round trip that facilitates both distribution and collection at the same time. The term Milk Run originates from the American dairy industry. It refers to a milk man, on his daily route, simultaneously distributes the full bottles and collects the empty bottles.   In logistics the term Milk Run was first used by Winfried Meusel in 1993. According to him, by using Milk Runs the utilized capacity of a transport vehicle can be increased and transportation costs could be reduced.  By making frequent stops, a truck can pick up many types of materials originating from several suppliers and drop off goods destined for various customers, all in the same run. This allows direct pick-ups and drop-offs to be planned more frequently, without having to wait for full truckloads, which in turn enables both inventory levels and response times to be reduced. A consistent approach to planning increases freequency and capacity  resulting in considerable cost savings.

This method is successfully implemented in many industries for accelerating the flow of products between various production processes by planning truck routes in such a way that they collect and deliver materials for many different processes at once.  DHL Global Logistics / DHL Supply chain , a Deutsche company of Germany that provides international shipping, in August, 2008, successfully implemented milk run system for Jaguar .  As per a study for preparing the policy guidelines for the rationalization of freight traffic in Bologna metropolitan area in Italy , which is the origin/destination point of regional, national and international supply chains, it is noted that the implementation of  milk run logistics,  the number of incoming trucks to the area reduced and waiting time of vehicles came down to almost zero.  

The procedure for development of a Milk-Run-Concept consists of the       fixation of weight and volume of parcels of the customers at both ends and proper schedule fixing after considering the delivery frequency, time slots, maximum number of customers etc. The priorities must be given to customer needs, with an emphasis to the technical harmonization and interoperability among systems, particularly for containers.