3-9. About Milk Run Transport (Circular Collection)
Milk run transport (circular collection) is a logistics method in which a single truck makes the rounds of multiple suppliers (such as parts manufacturers) to pick up and collect cargo (the name originates from the practice of milkmen visiting each farm to collect milk).
1. Basic Flow of Milk Run Transport
In this diagram, logistics flows in the following three steps.
For each area of District A, District B, and District C, a truck circulates among multiple Suppliers to collect cargo.
The cargo collected from each district is temporarily gathered at the Distribution Center (DC).
The cargo consolidated at the DC is transported in bulk to the factory via proxy delivery transport.
2. Planning and Operational Business Flow (The Flow on the Left)
This is the process in which the shipper (business partner) and the logistics company (our person in charge) cooperate to optimize vehicle dispatching and quantities to achieve efficient milk run transport.
| Person in Charge | Business Description |
|---|---|
| Business Partner |
・Ordering Plan: Creating a plan for when, which parts, and how much is needed. ・Delivery Date Adjustment: Adjusting the delivery date with suppliers. |
| Business Partner + Our Person in Charge |
・Loading Quantity Adjustment: Adjusting the quantity to increase the loading efficiency of the truck. ・Optimal Milk Run Dispatch: Planning efficient circular routes and vehicle arrangements. |
| Actual Transport Execution |
・Executing the actual milk run transport and proxy delivery based on the plan. |
3. Merits and Explanation of Milk Run Transport (Pickup Logistics)
Compared to individual delivery (a method where each supplier delivers individually to the factory), there are significant merits as follows:
📈 Improved Loading Efficiency and Cost Reduction
Even if the shipping volume per company is small, visiting multiple companies increases the loading efficiency (full-load ratio) per truck, thereby keeping transportation costs down.
🏭 Alleviation of Congestion and Efficient Receiving at the Factory
By preventing trucks from rushing individually to the factory from many suppliers, and instead consolidating them in bulk at the DC and performing proxy delivery, congestion at the factory's unloading area (berth) can be eliminated.
🌱 Reduction of CO2 Emissions (Lowering Environmental Impact)
Because the total number of vehicles on the road and empty running distances can be reduced, eco-friendly and sustainable logistics can be realized.
📦 Realization of Small-lot, High-frequency Delivery
Because only the necessary items in the necessary quantities can be picked up, it contributes to inventory reduction (Just-In-Time) on the factory side.