MILK RUN METHOD AND ITS APPLICATION IN OPERATION

MANAGEMENT

A milk run, in logistics, is a round trip that facilitates either distribution or

collection. 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.

What is Milk Run Distribution?

It is the combination of shipments from multiple vendors in close geographic
proximity into one shipment received by the customer, normally done for a
defined route on a recurring basis.

Advantages of the Milk Run System

1.) Fast inventory turnover
2.) Less inventory and inventory area requirement
3.) Easier inventory record and monitoring
4.) Speed and flexibility
 5.) Efficient control on the subsidiary industries for the main industry
6.) Creating economics of scale for subsidiary industry and efficient
consolidation possibility
7.) Ability to provide common service to different users in subsidiary
industry and productivity increases

Application in operation management:-

I. Improving the Vehicle load factors by making full use of vehicle’s space
and reducing the transportation cost.
II. Promoting the Establishment and Perfection of Information Platform
III. Improving the Efficiency and Quality of the Service – through minimal
the wastage in the process for delivery, and setting specific standards
because standardize operation could decrease its fault rates, as well as
improving staff quality and quality of service.

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