Milk-run routing problem with progress-lane in the collection of automobile parts

In recent years, the automotive industry has faced an unprecedented crisis. In particular, the zero-inventory approach, which has been widely pursued by many automobile companies, seems to be impractical in some real production contexts since it requires an inventory of all parts but in low amounts. In this paper, we investigate a new logistics method which collects automobile parts by integrating the progress-lane (P-LANE) into the corresponding vehicle routing problem. We propose a mixed integer programming formulation for this new model, which can simultaneously determines the trip routes to collect automobile parts, as well as the P-LANE that each collected part should be assigned to, so as to minimize the total costs of the production and inbound logistics. The comparison with the zero-inventory model shows that the use of the P-LANE within the milk-run system could significantly decrease the total costs and also improve the transportation efficiency. To be specific, for small and large size instances, the total costs of the zero-inventory model are about 10% and 30% higher than the ones with P-LANE, respectively, which suggests that the periodic part collection model with P-LANE could be more appropriate for automobile manufacturing.