What Is a Milk Run?

The milk run is a method for connecting material movement between multiple sources and a storage location nearer to the point of use or processing.  The name comes from a practice in the dairy industry. A tanker truck makes rounds to collect milk from several dairy farms and delivers this mixed load to a dairy processing plant.

In lean logistics, the milk run is a route between several suppliers and a customer site. For example, rather than each supplier sending a truck every few days to the customer, a shared truck stops at several suppliers to pick up loads for the customer on a daily basis.

Increasing Delivery Frequency and Reliability

Milk runs are characterized by a high frequency of deliveries. Milk has a shelf life and needs to be picked up more than once per week. Likewise, the point of milk runs is to reduce inventory and improve customer service by increasing delivery frequency.

Typically this means 1 to 4 deliveries per shift. A mature, high-volume assembly plant may have four to six suppliers on a particular milk run route. A typical milk run cycle is 2 hours for suppliers local to the plant. This allows for four delivery cycles per eight-hour shift. Thus, the individual transport cycles range from 8 to 2 hours.

Milk runs make replenishment lead times more predictable, reduce inventory, and improve inventory visibility via more frequent communication with the points of supply. Receiving operations also benefit from the consolidation of deliveries.

Types of Milk Runs

When transporting milk, the distances between dairy farms and the dairy processing plant are generally not that great. The milk run can be a good fit when supplier factories are located not too far from their customer. But what if suppliers are spread across a large countryside or even the globe?

Broadly, there are three types of milk runs based on distance. They are the local, the remote, and the semi-remote. The local milk run works well when suppliers are within about 200 miles from the customer plant. The distance, but more importantly the transport time, should allow for frequent deliveries without losing time driving. The same basic concept can be applied for internal logistics within large factories or a site with multiple buildings supplying one internal customer.

When suppliers are remote, the system is adapted by using a series of connected hubs, cross docks, a relay system of drivers swapping trailers, and so forth. These methods help maintain the local milk run cadence while making sure that the longer chain of supply is moving steadily and in synch. There is a tradeoff between the benefits of low-cost, extended supply chains and the costs of inventory, environmental impact, and managing a more complex remote milk run system.

Setting Up the Milk Run Pattern

While the concept is simple, setting up a milk run system for complex industrial goods requires careful planning. The route may involve products from different companies, which will require agreements about timing, frequency, container standardization, inventory levels, and how to share costs and savings from pooling resources in a cooperative delivery method. The first step is to agree on such policies and principles.

At the informational level, setting up a milk run system involves creating a timetable. This is the basis for standard work. This requires mapping the material and information flow between suppliers and customers and defining the main suppliers or acting hubs or consolidation centers.

Setting Up Milk Run Equipment and Methods

At the physical level, it’s often necessary to modify the containers for material presentation and even transportation equipment, such as dedicated side-loading trucks for smoother transfer of goods. Competence with the use of supermarkets or similar storage infrastructure is a prerequisite.

At the task or method level, it’s important to observe and time each step of the process, identifying common and unique things to do at each stop. The timetable may be the macro-level standard work for goods movement, but the drivers and operators also need their stop-level standard work. In addition to loading and unloading, this often involves information verification tasks such as the part number and quantity verification, handling of kanban cards, a quick quality check, and flagging any issues or discrepancies.

Starting Small with a Plan to Scale

It’s important to have an overall idea of the items, suppliers, and number of milk run routes that will be needed in order to gain practical benefits from this system. However, depending on volumes, distances, and the maturity of and stability of the supply chain, it’s typical to start out with two or even just one milk run cycle, delivering every four to eight hours. This allows us to go from theory to practice, working out the kinks before making a larger commitment.

It can be tempting to add just one more supplier, or one that’s just outside of the route, in order to save costs. However, this can be a slippery slope, disrupting standard work, causing delays, shortages, etc. if we are not careful. It may be possible to integrate these cases into a milk run by having these parts delivered to one of the suppliers or a third party logistics site on the route. It’s best not to be greedy but to start small, and scale up methodically.

How Not to Spoil the Milk Run

Milk runs need to be standardized and dedicated routes. Sometimes companies use the term milk run for more ad hoc, quantity-based rather than time-based deliveries, but this should generally be avoided. At other times, a customer may expect that a supplier is capable of handling multiple daily pickups, which may not be the case. A reliable timetable is key both for predictability and for reducing total cost.

Milk runs may not be suitable when transportation conditions are unpredictable across the route. This may be due to weather, bridge closings, seasonal or event-based traffic spikes, etc. Careful route planning, with alternative routes and a thorough understanding of how conditions vary can help with this. A common pitfall is to rush the route planning, resulting in either increased inventory buffers or outages.

When a product is only required sporadically from a specific supplier, it’s less complex if these items are excluded from the milk run system, at least at first.

Setting Up a Milk Run Is No Milk Run

When it comes to setting up and running milk run systems in modern supply chains, it’s not quite as simple as backing up to the next dairy farm and filling up the tanker. It’s ironic that the expression “milk run” also means a routine, uneventful journey, or simple task.

Milk runs require significant upfront planning and coordination. However, by standardizing the timing, sequence, and quantity of items to deliver, the flow of goods becomes simpler and more reliable. This also sets a base for continuous improvement of material movement.

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