Tu says that the benefits of Delphi’s milkrun system include reduced inventory, freight costs, and packaging, as well as fewer damages and improved truck utilisation. It has also balanced its receiving windows and reduced receiving costs, thus improving order-to-delivery performance. Besides its milkrun network, Delphi also arranges less-than-truckload (LTL), rail, air, and water transport on a delivered basis for suppliers that are located outside of the region, which accounts for 20% of its inbound parts.
The milkrun network is also being helped by a trend which sees Delphi managing more of its inbound logistics, especially for its domestic supplier base. Delphi has been changing its delivery terms from DDU (Delivery Duty Unpaid), in which the supplier is responsible for delivery, to ex-works or FCA (Free Carrier), whereby Delphi handles most of the logistics.