“Milk Run” is an intriguing concept in logistics. In this blog post, we unravel the meaning and significance of this innovative supply chain strategy, which can revolutionize how goods move in logistics and transportation.
When a customer orders multiple products online, an eCommerce owner attempts to collect all the products they ordered in one shipment and deliver them to the customer in one go. This method of delivery is called the Milk Run. Milk Run is also done for various other reasons, such as ensuring optimized available space utilization.
As a business owner, you might want to consider implementing the Milk Run delivery method if you are continuously looking for new ways to optimize your business logistics and ensure that your processes are streamlined.
In the logistics industry, the supplier, instead of delivering products to their customer in multiple packages, often opts to deliver the products in one shipment. However, in a Milk Run, the carrier will have to make multiple halts to acquire all the products that a single customer ordered.
Why “Milk Run”?
It is said that the coinage Milk Run originated during World War 2 (WWII). During those times, people who delivered milk had to return to the same route to collect the empty milk bottles. Pilots during WWII used to refer to routes with multiple halts and low risk as Milk Runs. These milk providers had their set routes and customer lists to ensure smooth milk delivery. In dairy industries, one milk tanker collects milk from various farms and delivers it to one firm that processes it. In some areas, there were trains that used to do scheduled stops at different stations to pick up the collected milk.
How Milk Run Impacts Logistics and Warehousing?
The Milk Run deliveries done in logistics and warehousing differ from that in any other field. The products are delivered to internal distribution centers or warehouses in this case. This method has now been incorporated within several supply chain processes.
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The following are examples in which the Milk Run is implemented:
- Suppose there are several growers of cotton in an area. In that case, the owners can send their products individually to the main cotton collection center. Alternatively, a vehicle could run the entire route where the cotton growers are situated and collect the cotton in one go.
- If you are a manufacturer, you might decide to ship different components of your product from various sellers. Alternatively, you can designate one central warehouse to collect the components and send them to their assembly lines.
How Milk Run Impacts Third-party Logistics?
The Milk Run method applies the lean management principles effectively to logistics. The third-party logistics company must be flexible and willing to pivot according to changing circumstances. However, to implement Milk Run effectively, companies must plan ahead. Along with planning, a whole lot of synchronization is also required. An ideal solution is to invest in a technology that will automate the entire process and give you peace of mind.
The first thing required is that the technical tool you invest in should be transparent and give you complete visibility about the status of your shipment. You are aware of the orders and can then make an informed decision as to where to implement the Milk Run. This way, you will save seller transportation costs and customers the hassle of receiving their packages in multiple shipments.
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Before you think about whether or not to implement Milk Runs in your logistics, you must be aware of the advantages and disadvantages of this method to make an informed decision. Let’s start with the advantages first.
What are the Benefits of Milk Run Logistics?
The products are delivered regularly in the Milk Run method, ensuring you never run out of stock. Consequently, you have the opportunity to continuously restock the popular items. The companies then can automate and regulate their logistics operation smoothly.
In this method, the carbon emission is considerably less as the deliveries are done together. This reduced carbon emission significantly affects the environment, making it sustainable. Not to mention, the smaller number of drive runs means you are also saving money on fuel.
When your deliveries are automated due to implementing this method, you can concentrate on the quality of the product you supply. As a result, companies can concentrate on products and reduce the number of defective products manufactured.
What are the Problems of Milk Run Logistics?
Implementing Milk Run in the logistics field is a complicated process. For the process to be seamless and accurate, you will have to consider various factors, such as the total volume of the product you plan to transport and the time taken to transport the product of that volume mentioned earlier.
Suppose there are gaps in the implementation of Milk Run correctly. Even small errors can have huge financial and logistical impacts in that case. Predicting the logistics requirement incorrectly or unplanned interruptions can quickly escalate to significant issues.
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As the run requires a healthy dose of planning, implementing it can be quite expensive. Depending on your existing logistics system, you might also need to replace machinery and existing technologies. Only implement these runs if you are confident that it will be cost-effective.
Conclusion:
A Milk Run is, without a doubt, an efficient way to handle your logistics. However, implementing a Milk Run takes a fair amount of planning. If your delivery planning includes multiple companies, you must have clear and transparent negotiations and contracts with them about how the cost-sharing will occur. This agreement with different companies can be mutually beneficial as they can create a central pool of resources and costs that everyone involved can dip into. It is a smart way to deal with logistics issues once you have ironed the kinks out.
Multiple industries benefit from Milk Run, and logistics is just one of them. Industries such as manufacturing, receiving operations, and warehousing also benefit significantly from implementing the Milk Run method. However, you can also let the experts do their work and hire an experienced 3PL provider so you can focus on growing your business. Contact XPDEL to learn how we can help you with your supply chain and logistics management.
About XPDEL:
XPDEL helps eCommerce brands accelerate their growth, empowering them with multi-channel fulfillment, whether shipping directly to consumers, delivering to businesses, or selling through retail stores. We are founded and operated by veterans with experience from Amazon, FedEx, UPS, JDA, Walmart, Target, and other leading companies in eCommerce and Retail. Guided by these experts, we provide customer experiences that help you grow your business.
