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A supplier sends the goods to a warehouse. The warehouse serves many smaller customers. The warehouse distributes the goods to the end customers using a milk-run for vehicles.
A milk run is a route on which a truck either delivers product from a single supplier to multiple retailers or goes from multiple suppliers to a single buyer location. In direct shipping with milk runs, a supplier delivers directly to multiple buyer locations on a truck or a truck picks up deliveries destined for the same buyer location from many suppliers. When using this option, a supply chain manager has to decide on the routing of each milk run.
Source: Singapore University of Social Sciences, LOG207 Warehousing and Material handling, Study Guide (2018).
Use of Warehousing for Break-Bulk Operations
Use of Warehousing for Break-Bulk Operations
Break-bulk is the opposite of consolidation. It is feasible when:
the inbound transport rate per unit is less than the outbound rate per unit,
customer orders are in LTL quantities, and
distances between manufacturer and customers are great.
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