What is a milk run
Classically a production unit needs several materials as input. We speak of a traditional delivery system when the inputs are delivered by each supplier by their own transport. A milk run is a delivery system where one transport picks up all the material and delivers it to the production unit.
According to the internet there are several origins for the name milk run
One of them is that the name milk run comes from the way milk was delivered from the farms to the milk processing company. Instead of each farm bringing in the milk separately, a truck was used to collect all the milk cans at the farms before delivering it to the milk processing company. On the next transport the empty cans would be delivered back to the farm to be refilled.
Another one is that the name milk run comes from the way milk bottles were distributed by the milkman. The milkman had a fixed daily route where he collected the empty bottles from the previous delivery and replaced them by full ones. The empty bottle went back to the milk processing company where they were cleaned and filled up again.
In both cases the milk run reference to one single transport which stops at many places to replenish materials. In both cases the milk run also creates a stable supply. In one case to the milk processing company and in the other case to the households.
Which kind of milk runs exist
When the milkman did his milk run to replenish milk bottles on his local route, his customer where located closely together. But what do you do when your customers or suppliers are far away.
A milk run works well when the suppliers are close by. This means that performing the route does not take too much time . And thus, you can run the route frequently. This means again, that you do not need large amount of WIP at the production line, since you can replenish it frequently.
If the milk run cycle becomes too long, you will need large amount of WIP at the production line.
If your milk run cycle becomes 2 times longer, you will need 2 times more buffer. You can add of course an extra transport to your milk-run cycle, but there are better solutions available.
Long distance milk run
When the distance and travel time becomes to large you will have to work with a hybrid solution. There are several solutions possible. It Depends on how many suppliers you have and where they are located. Below are two basic solution. Your final solution will probably be a combination of these.
Remote supplier to local warehouse
The first solution is to add a local warehouse in your milk run. This can be an internal or external warehouse. Supplier who are to far away deliver their goods to the warehouse which is incorporated in your milk run. You will have to make a trade-off between travel time and stock in your warehouse.
A group of remote suppliers
If you have several remote suppliers which are located at the same area you can group them and perform a milk run between them and an external warehouse. Traditional long-distance trucks can be used to transport the materials from the warehouse to the customer.
How to set-up a milk run
There are several prerequisites for a milk run:
- There should be a more or less steady demand. If not you risk stock shortage or excessive transport.
- There should be a fixed set of location by which the milk run has to pass
- The materials to be replenished should always the same materials. This means that you can not set-up a milk run for customized items.
The milk run should run smoothly. Therefore, the loading/unloading time should be minimized and waiting time should be avoided. This means that you need to have good agreements with your supplier. The goods which have to picked up should be readily available.
A time schedule should be created to determine when the milk run has to be performed. A trade-off has to be made between the frequency of the milk run and the WIP at the production line.
- A lower frequency will result is more WIP at the production line, but lower transport cost
- A higher frequency will result is less WIP at the production line, but higher transport cost
A clear signal is needed on what has to be replenished. Only consumed materials should be replenished.
When the milkman did his milk run the empty bottles acted as a signal. If the milkman saw empty bottles he had to replace them with full ones. It was also very easy to see how many replacements where needed. The empty bottles acted just like a Kanban in a production area.
This means that maybe the containers and boxes containing the materials have to be adapted. Also the racks containing the containers and boxes have to be often adapted in order to assure a smooth replenishment.
When speaking in lean terms we can say that we need to create supermarkets from where the supplied products can be pulled.
Finally, we have to create standard work for the transporter. The standard work defined what he needs to do at each stop exactly. Which goods need to be loaded and unloaded and which extra steps has he to do. This could be for example certain quality checks or administrative work.
What are the advantages of a milk run
Thanks to the milk run delivers are made on a regular base decreasing the risk for stock shortage and increasing the predictability and reliability of the supply chain. There is no more need to request last-minute products from the warehouse.
A milk run also limits the transport time reducing transport cost. Also, the carbon emission is reduced which results is a better sustainability.
A milk run fits great in the philosophy of lean! Reducing transport and inventory. Lower WIP at the workspace means also that you can work with lower space. It fits perfectly in a pull production.
But be careful, when the milk run is not set up right it could harm your supply chain severally!