THE SHARED MILK RUN THE MISSING LINK IN LEAN MANUFACTUING HOW IT WORKS. spl it - bil l mil kr un. What is it?

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1 THE SHARED MILK RUN What is it? Com p an ies are con t in u ally ch allen g ed t o im p rove t h eir overall op erat ion al services by red u cin g t ran sp ort at ion sp en d in g, in ven t ory levels an d d elivery t im elin es. Th e Cart er Milk ru n Syst em w as d esig n ed t o ad d ress t h ose sp ecif ic ch allen g es an d su p p ort clien t s? lean m an u fact u rin g effort s. Th e Cart er Sh ared Milk ru n Net w ork is a u n iq u e log ist ics m od el d esig n ed t o su p p ort lean in it iat ives by com b in in g f reig h t f rom an in t ern at ion al clien t b ase an d t h ou san d s of su p p liers in t o a sin g le su p p ly ch ain solu t ion. On e of t h e p illars of Cart er?s su ccess is t h e?sp lit -Bill? m et h od olog y, w h ich allow s clien t s t o fairly sp lit t h e overall cost of sh ared m ilk ru n rou t es. HOW IT WORKS Milkrun clients share t he cost of each shared?m ilkrun route? based upon t he percentag e of w eig ht t hey ship. For exam ple, if you ship 50% of t he tot al w eig ht on a m ilkrun route, you pay only 50% of t he t ransport at ion cost s. Carter Log ist ic's analyst s perform w eekly route optim izat ions to ensure shipm ents t ravel in t he m ost eff icient m anner. The prof iciency and determ inat ion of t he Carter Log ist ics team allow s clients to experience subst antial and continued savings and achieve t heir lean init iat ives. THE MISSING LINK IN LEAN MANUFACTUING The Shared Milkrun allow s your part s to?share a ride? w it h ot her custom ers?product s w hile cutt ing your shipping cost s. Carter's hug e netw ork also m inim izes em pty m iles, furt her reducing cost s. As suppliers and/or m anufact uring plants add w eig ht to t he netw ork, t he cost per pound decreases for all part icipat ing clients. spl it - bil l mil kr un Split-Bill Milkrun is a m ust if you?re a sm all m anufact urer or you have a m id to larg e-sized operat ion t hat relies on lean m anufact uring principles. This unique billing system allow s you to only pay for t he percentag e of t he t railer t hat you use. Unlike ot her shipping m et hods like Truckload, LTL and t he Dedicated Milkrun, Split-Bill Milkrun reduces your cost w hile sim ult aneously increasing shipping f requency and flexibility.

2 r et ur nabl e cont ainer shipping Green log ist ics is continually m aking it s w ay onto t he priority list for US and Global Manufact urers. Eco-f riendly shipping can be accom plished in a num ber of w ays including utilizing ret urnable containers. W hen your log ist ics provider offers ret urnable container m anag em ent, t hey low er how m uch physical w aste (in t he form of disposable shipping containers) your supply chain produces. Likew ise, utlizing ret urnable containers inside a Shared Milkrun m eans hig her cube and less em pty m iles driven. It com pletes t he puzzle of coordinat ing t railer fullness, w it h m ult iple custom ers and suppliers receiving f reig ht and loading em pty ret urnable containers on each stop t hroug hout t he Milkrun route. Think of t he Shared Milkrun like log ist ics carpooling. Sharing t railers and routes low ers carbon em issions overall and each com pany can boast in t heir ability to reduce CO2 em issions in t heir supply chain. Tab le of Con t en t s 1. Ded icat ed Milk ru n vs. Sh ared Milk ru n 2. Tru ck load Sh ip m en t vs. Sh ared Milk ru n 3. Less Th an Tru ck load vs. Sh ared Milk ru n 4. Im pact on Lean Man u fact u rin g an d Red u cin g Su p p ly Ch ain Cost s 5. Cart er Log ist ics

3 dedicat ed mil k r un vs. shar ed mil k r un Having a w ell-planned and executed netw ork of custom ers, suppliers and daily routes is key to a successful supply chain operat ion. Analyzing t he w ay f reig ht is t ransported f rom one locat ion to anot her is a crucial part of any com pany?s business plan and can also sig nif icantly im pact a com pany?s f inancials. W hile every com pany?s m ost eff icient m ode of t ransport at ion m ay vary based on t heir needs, tw o options are t he Dedicated Milkrun and Shared Milkrun. In a Dedicated Milkrun, a t ruck w ill visit t he suppliers of only one com pany. The draw back to t his form of t ransport ing f reig ht is t hat t here can be a sig nif icant am ount of dow n t im e for drivers, as w ell as em pty space in t he t ruck w hile it m oves along a lengthy route before it is even close to being full. Once t he route is com pleted, t he t ruck ret urns em pty. These factors lead to w asted space and m oney. W hile a Shared Milkrun is quite sim ilar to a Dedicated Milkrun, t here are som e added benef it s to t his form of t ransport ing f reig ht. In a Shared Milkrun, f reig ht is t ransported for m ult iple suppliers and m ult iple custom ers. This allow s for shorter, m ore f requent routes, w hich m eans t rucks are full of f reig ht a larg er port ion of t he t im e. This allow s for hig her eff iciency and m ore f requent m ovem ent of f reig ht. In addit ion to t his, a Shared Milkrun utilizes dynam ic routes t hat allow for flexibility in volum e changes. In a Shared Milkrun, t he volum e of t raff ic is reduced w it hin a facility because f reig ht w ill be shipped during a scheduled w indow of t im e. In addit ion to t his benef it, t he cost is m ore eff icient due to a ret urnable container m anag em ent system t hat allow s t he cost of ret urning to be based on w eig ht. Com parat ively, a Shared Milkrun m ost def initely has benef it s over a Dedicated Milkrun. The am ount of f reig ht t hat is t ransported is planned in a w ay t hat allow s for t he m ost eff icient and cost-effect ive use of space. That cost saving aspect, com bined w it h t he easy ret urnable container system, adds up to a g reat deal of savings. W hen you factor in t he t im e and m inim al inventory being kept, one can see t hat t here is a f inancial benef it to t aking part in a Shared Milkrun. 1 2 Ben ef it s The cost savings gained both on freight and returnable by sharing the truck with other customers Maximized cube utilization and efficiency when sharing routes with other suppliers/ plants in the network

4 t r uckl oad shipment vs. shar ed mil k r un W hen using t he Truckload Shipping Met hod, a shipm ent w ill rem ain at t he dock until t he t ruck?s cube is fully utilized. Once t he cube has reached it s capacity, it w ill t hen be shipped, result ing in a sig nif icant am ount of dow n-t im e w hile w ait ing for t he f reig ht to reach capacity. This in t urn causes longer lead t im es and allow s inventory to accum ulate w it hin a facility. W hile it does m ake t he m ost of a cube, it is not a benef icial shipping m et hod for just-in-t im e delivery or lean m anufact uring m et hods. Com parat ively, a Shared Milkrun is effect ive w hen w anting to keep inventory levels at a g iven facility low. This m et hod allow s drivers to pick up f reig ht during scheduled t im e w indow s, allow ing t he t raff ic in t he facility to be m inim ized. Because t he routes run 24 /7, crossdocks are alw ays shipping and receiving f reig ht. This allow s a Shared Milkrun to reduce em pty m iles, increase t railer utilizat ion and ship faster t han a Truckload Shipm ent. In addit ion to t his, t he Carter Shared Milkrun has an expansive netw ork of custom ers and suppliers t hat allow s Carter to utilize dynam ic routes. Because t he netw ork is so larg e and can be rerouted to f it each custom er?s needs, it g ives each custom er flexibility in volum e changes to ensure t hat t hey have t he rig ht space reserved for each pick-up. This ensures t hat you are paying for only t he space you are using, despite fluct uat ion in volum e, w hile also sharing t he cost of t he shipm ent w it h ot her com panies. Overall, a Shared Milkrun has several added benef it s w hen com pared to a Truckload Shipm ent. Because Carter Express has analyst s t hat are const antly review ing routes for t he best eff iciency, custom ers can be sure t hat t heir f reig ht is m oving as quickly as possible. 1 2 Ben ef it s Beneficial shippping method for just-in-time delivereies and lean manufacturing methods Reduce empty miles, increase trailer utilization and ship faster

5 l ess t han t r uckl oad vs. shar ed mil k r un A Less t han Truckload shipm ent is typically used w hen t he f reig ht w eig hs betw een 151 and 20,000 pounds. If a sm all am ount of f reig ht needs to be shipped, t he advantag e of LTL is t hat you only pay for w hat you ship rat her t han paying for a w hole t ruckload. In addit ion to t his, LTL allow s sm aller am ounts of product, part s and m aterials to be m oved m ore f requently t han if you w aited for a full t ruckload to be ready, g iving your m anufact uring and w arehouse operat ions just-in-t im e capability. W it h t hat being said, LTL shipm ents do have draw backs. Because t he entire t ruckload is not dedicated to your product alone, LTL providers w ill typically consolidate various f reig ht tog et her, adding m ore dock t im e. Because t he f reig ht is being consolidated, t he product m ay be m oved several t im es into different t rucks along it s route. This causes t he risk of dam ag e to be m uch g reater. A better option for com panies w ho do not need to ship a full t ruckload is a Shared Milkrun. W it h t his shipping m et hod, a com pany st ill has dedicated t ruck space for t heir product just like an LTL and w ill share t he t ruck w it h ot her com panies. Unlike LTL, t he route of a Shared Milkrun is w ell planned and consistent w hich allow s for few er stops. Because of t his, t he f reig ht is only m oved to t he crossdock once and t hen onto a delivery t ruck, not m oved f rom t ruck to t ruck and consolidated like an LTL shipm ent w ould be. This eff iciency allow s t he risk of dam ag e and cost of shipping to be m uch low er. Carter Express has a unique option for it s Shared Milkrun t hat m akes t his form of t ransport at ion even m ore benef icial. It allow s a com pany to pay for t he w eig ht used on t he t ruck instead of charg ing by f reig ht class. In addit ion to t his, som e Shared Milkrun providers offer a ret urnable container service. It also keeps t he t rucks fuller for m uch m ore of t he route, low ering cost s for ot her custom ers. If a com pany has sm aller am ounts of product t hat t hey ship on a reg ular basis, a Shared Milkrun is t he better option. 1 2 Ben ef it s Well-planned and consistent route allowing for fewer stops Significantly lower risk of damage

6 IMPACT ON LEAN MANUFACTURING - Reduced safety stock (low er inventories) - Sm all lot and m ore f requent shipm ents - Im proved t ransit t im es w it h scheduled deliveries - Low er log ist ics cost and reduced cost per pound - Level product ion and delivery schedules - Integ rated pull system s r educing supply chain cost s - Better t railer utilizat ion - Better fuel utilizat ion - Less w ait t im e at t he suppliers - Less dam ag ed m aterial and few er claim s - Few er expedited shipm ents - Single source for all t ransport at ion needs - Ret urnable container m anag em ent

7 For t hree g enerat ions, t he Carter fam ily of com panies have been evolving to m eet t he dem ands of an ever-m ore-connected w orld. W hat beg an as a m odest, fam ily-ow ned dealership in 1957 eventually developed into a t rucking com pany and t hen into a public and g lobally-ow ned log ist ics pow erhouse w it h clients located around t he w orld. Find out m ore: w w w.cart er-log ist ics.com