Internal logistics : Optimizing the flow of goods with milk runs

Abstract: In today's world the challenge of logistics becomes more and more important for all companies, which consequently contributes to the need of an integrated system of in-house logistics. Goods must flow easily between stations and departments in order to achieve the best utilization of transportation as well as maintaining a good distribution structure to handle these processes in an efficient and effective way to enhance business performance and competitiveness. This report aims to provide research on how to strategically organize, plan and structure the flow of internal logistics within an organization. The research in this study originates from 3 main methods, a theoretical review, a case study and a benchmark. The main idea of the thesis was to contribute with scientific knowledge of improvements that can be achieved within internal logistics targeting companies operating within the service sector. In order to understand the scope of the problem the current state at the case Tropical Islands was analysed and served to identify areas where possible improvements could be achieved. Further on, in combination with the theory and empirical findings the main conclusions of the thesis was the need to strategically organize the flow of internal logistics to improve efficiency and enhance competitiveness. It was made evident that planning is essential in order to successfully implement the milk runs. Other tools could be utilized to further eliminate drawbacks that might occur.