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

Document Type: Case Study


1 Faculty of Industrial and Energy Management, Electric Power University, Hanoi, Vietnam

2 Toyota Motor Vietnam Co., Ltd.


Logistics and supply chain play important roles to support enterprises’ operations that aims to satisfy customers’ demands. Moreover, the globalization of the world economy and the emergence of the fourth industrial revolution pushes 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 had been adapted successfully in practice, is adopted 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 operates under just-in-time philosophy.


Baudin, M. (2005). Lean logistics: the nuts and bolts of delivering materials and goods: CRC Press.

De Moura, D. A., and Botter, R. C. (2016). Delivery And Pick-Up Problem Transportation-Milk Run or Conventional Systems. Independent Journal of Management & Production, Vol. 7(3), pp. 746-770.

Liu, Y., Huang, J., and Zhang, Q. (2010). Development Mode of Automotive Logistics and Optimizing Countermeasure of China's Automotive Enterprises. International Business Research, Vol.3(3), pp. 194-196.

Mácsay, V., Bányai T. (2017). Toyota Production System in Milkrun Based In-Plant Supply. Journal of Production Engineering, Vol. 20(1), pp. 141-146.

Meyer, A. (2017). Milk run design: Definitions, concepts and solution approaches (Vol. 88): KIT Scientific Publishing.

Nemoto, T., Hayashi, K., and Hashimoto, M. (2010). Milk-run logistics by Japanese automobile manufacturers in Thailand. Procedia-Social and Behavioral Sciences, Vol. 2(3), pp. 5980-5989.

Patel, D., Patel, M., and Vadher, J. (2014). Implementation of milk run material supply system in vehicle routing problem with simultaneous pickup and delivery. International Journal of Application or Innovation in Engineering & Management (IJAIEM), Vol. 3(11), pp. 122-124.

Peterson, B., van Hoeve, W.-J., Kekre, S., and Debo, L. (2010). Flexible milk-runs for stochastic vehicle routing.

Sabadka, D. (2015). New trends and challenges in automotive industry logistics operations. Acta logistica, Vol. 2(1), pp. 15-19.

Shaaban, S., Hudson, S., and Zhang, L. (2013). Kanban‐controlled exponential production lines: analysis and design. Journal of Manufacturing Technology Management, Vol. 24(3), pp. 358-383.

Womack, J. P., Jones, D. T., and Roos, D. (1990). Machine that changed the world: Simon and Schuster.