Milk runs

Figure 5.3. Chromatograms of a mixture of 10 pesticide standards, extracted from milk, run on various detectors (ref. 3). (a) Flame ionization detector.

Military projects, work bretikdown structure for, 1273-1275 Milk runs, 1513 Milling, 1322... 

The consolidation center is not used for every item. Indeed, suppliers deliver directly all the items other than those explicitly identifed for the consolidation center. Returnable containers with item-specific dunnage are used for local deliveries on milk runs because (1) they save assembler time and disposal costs, (2) their number caps the amount of parts in circulation, and (3) the trucks that ride back to the supplier plant would otherwise be empty. The economics of returnable containers become less favorable for distant suppliers, whose remote or overseas locations may provide opportunities for return freight. 

Breadman A term applied to automatic replacement of inventory by third-party logistics providers, normally distributors. The analogy is the breadman who replenishes stock in the grocery store on a regularly scheduled basis. A related term is milk run. The term can also apply to types of vendor-managed inventory. 

Milk run A transportation link in the supply chain characterized by regularly scheduled shipments to one or more points. By combining shipments, more frequent shipments are economically feasible. The milk run lowers the incremental cost of filling an order, enabling continuous flow in the supply chain. 

Periodic replenishment Aggregating requirements to place deliveries of varying quantities at evenly spaced time intervals, rather than variably spaced deliveries of equal quantities. The term fixed cycle also refers to this method. The milk run is also a tool for implementing this approach. (Adapted from APICS Dictionary, 10th edition)... 

Variable costing is more valid in making decisions related to make or buy, economic order quantities, and other decisions. Supply chain design may transform variable into fixed costs. For example, a milk run will be made regardless of a decision to replenish any single SKU. Therefore, the reorder cost (including transportation) assumption related to the decision should be reduced accordingly. 

Both methods pull material through the supply chain. According to Monden, the constant cycle method is favored for subcontractors in the Toyota Production System. These may take the form of "milk runs" to the supplier several times a day, a constant cycle method, to pick up material for... 

Technically, some of the methods used to reduce lead times domestically are equally applicable in this context. For example, milk runs could be set up in the country of origin to fill shipping containers with mixed loads from multiple suppliers. Practically, however, this is much more difficult to set up overseas tiw in the planFs own neighborhood. 

The supplier had at most 36 min to perform processes (6) to (10) and make the assemblies available for Toyota to collect them, through a milk-run within the campus. The parts from Toyota s ten suppliers were picked up in a precise sequence that matched the assembly sequence. The operation of the milk run was placed under the responsibility of a logistics service provider. 

Should each delivery route supply a single destination or multiple destinations (milk run, discussed later) ... 

FIGURE 14-3 Milk Runs from Multiple Suppliers or to Multiple Buyer Locations... 

The online grocer Peapod uses milk runs from DCs when making customer deliveries to help reduce transportation costs for small shipments to be delivered to homes. OshKosh B Gosh, a manufacturer of children s wear, has used this idea to virtually eliminate LTL shipments from its DC in Tennessee to retail stores. 

Direct shipping with milk runs Lower transportation costs for small lots Lower inventories Increased coordination complexity... 

Shipping via DC using milk runs Lower outbound transportation cost for small lots Further increase in coordination complexity... 

The vice president of supply chain is considering whether to use direct shipping from suppliers to retail stores or setting up milk runs from suppliers to retail stores. What network do you recommend if annual sales for each product at each retail store are 960,000 units What network do you recommend if sales for each product at each retail store are 120,000 units ... 

Now, we analyze the network in which suppliers run mUk runs to retail stores. Milk runs increase the transportation cost but decrease the level of inventory each store has to hold. We provide a detailed analysis for the instance of suppliers running milk runs to two stores on each truck. In this case, we have the following ... 

Batch size shipped from each supplier to each store = 40,000/2 = 20,000 units Number of shipments/year from each supplier to each store = 960,000/20,000 = 48 Transportation cost per shipment per store (two stores/truck) = 1,000/2 + 100 = 6(X) Annual trucking cost for milk run network = 48 X 600 X 4 X 8 = 921,6(X)... 

This analysis shows that when demand per product per store is 960,000 units, the direct network is cheaper than running milk runs with two stores per route. Increasing the number of stores on a milk run ends up costing even more because it raises transportation costs more than it... 

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