Evaluation of Transportation Distance Optimization Route for Milk Run Logistics System

An efficient logistic system has become more important in today's business process. Milk run system is being introduced to encourage efficient logistic system in manufacturing which has indirectly resulted in a reduction of transportation cost, travelling path, as well as fuel consumption. Howe...

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Bibliographic Details
Published in:International journal of supply and operations management 2023-07, Vol.10 (3), p.295-318
Main Authors: Salleh, Noor Azlina Mohd, Ahmad, Siti Fatimah, Shaharudin, Mohd Rizaimy, Rahim, Suzana Ab
Format: Article
Language:English
Subjects:
Ant colony optimization
Energy consumption
Loading rate
Logistics
Matrix methods
Milk
Operating costs
Optimization
Optimization models
Production lines
Tabu search
Transportation
Transportation planning
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Summary:An efficient logistic system has become more important in today's business process. Milk run system is being introduced to encourage efficient logistic system in manufacturing which has indirectly resulted in a reduction of transportation cost, travelling path, as well as fuel consumption. However, the poor optimal state of the original delivery route and low vehicle loading rate has a huge impact on the production effectiveness. The objective of this study is to evaluate the current milk run route, optimize the transportation volume capacity and propose a transportation route for the milk run logistics system. The milk run concept is introduced to deliver components to the production line from multiple suppliers. This approach is based on the Just-In-Time concept promoted by Toyota Production System where the small batch is delivered to the production line to reduce the side inventory. A high frequency of delivery is required. Therefore, the load for each of the delivery needs to be calculated to achieve maximum load with minimum inventory. The Saving Matrix Method based on Tabu Search model and Ant Colony Optimization model is used to evaluate the current milk run route. The result of the analysis showed an unutilized capacity of 49% that can be reduced to 3% with a distance deviation between 0% for direct milk run route and 2.0% to 6.8% for indirect milk run route. The managerial suggestions that can increase the logistics efficiency of the milk run are provided to benefit the organization by reducing the total logistics cost.
ISSN:2383-1359
2383-2525
DOI:10.22034/IJSOM.2022.109361.2347