Abstract
This paper examines the role of inventory and transportation in the supply system of parts adopted by most of the Brazilian automotive companies to feed their assembly lines. It is a system for programmed collection of pieces called Milk Run that aims, within a window of time, to collect parts from suppliers, fulfilling established routes in order to minimize the cost of transport operations and reducing inventory in the supply chain. Milk Run, a scheduled collection system of parts can be carried out by automotive industry itself: the automaker manage the best route for its collector vehicle, determining the quantity of parts required to collect at each supplier within a given route, aiming to best utilize the capacity of the vehicle. Another way to work within the Milk Run system is the automaker to find the best routing and determines the amount of parts needed to be collected from each supplier on each trip. The collection, however, is held by a third carrier. As a third way of working, the assembler can determine the quantity of parts to collect and when it will require them. A logistics carrier determines the best routing for the collection of pieces in order to meet the production plan so that there is not a lack of parts or components on the assembly line, which would lead to a stop. In this case, the logistics carrier transports parts on its own fleet of vehicles or transfer the transport operation to a carrier.
Highlights
Many companies use the Milk Run system in Brazilian automobiles industries
In Conventional system of procurement, the supplier transports the parts to the automotive plant while in the Milk Run system the automotive uses one logistic carrier to collect the parts in the plant of each supplier onto its collecting route
The unit cost of order preparation (Cp) does not change with the quantity purchased, the total order preparation cost (CPED), (Generic Costs Relating to Batch Size), will be smaller when the batch size is large, since in their formulation there is a relationship between demand in the period, batch size supply and the unit cost of preparing the application
Summary
Many companies use the Milk Run system in Brazilian automobiles industries. The core of this process is to minimize the inventory (holding) and transportation cost. It returns to the automaker, bringing a load corresponding to 85% of its weight or cubic volume, to minimize transport costs (GORMAN et al, 2014; DEMIR; WOENSEL; KOK, 2014). For this system, it is necessary great integration between all elements like automotive company, supplier companies and logistic carrier. The Just in Time system requires quality in information between automotive, logistic carrier and suppliers, quality parts to supply the automotive plant and accurate quantity of parts in the correct container, at exact time that the automotive company needs them. In Conventional system of procurement, the supplier transports the parts to the automotive plant while in the Milk Run system the automotive uses one logistic carrier to collect the parts in the plant of each supplier onto its collecting route
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