Applying Milk-run Method to Optimize Cost of Transport: an Empirical Evidence

Logistics and supply chain play important roles in supporting enterprises’ operations that aim to satisfy customers’ demands. Moreover, the globalization of the world economy and the emergence of the fourth industrial revolution have pushed manufacturers to optimize their operations, particularly transportation and supplying activities. The main objective is to maintain competitive advantages and guarantee the expected benefit. Milk-run, a well-known transportation approach adopted successfully in practice, is used in this study to simultaneously minimize transportation and inventory costs in a just-in-time production environment. The results of this study show that the milk-run approach helps to reduce transportation and inventory costs for the studied company. The milk-run approach, therefore, is proved to be suitable for companies that operate under the just-in-time philosophy.