The purpose of this study is to examine and compare the effects of different inbound logistics models that can be used in automotive parts procurement in automobile manufacturing industry. We have used simulation experiment to test the effectiveness of four procurement models. The four models tested are Direct delivery, Milk run, Cross docking, and a hybrid model of Cross docking-Milk run. The simulation models were developed based on the real life data collected from a Korean car manufacturing company.
The results show that there are differences between the inbound logistics models in terms of logistics cost and the customer service measures such as on-time delivery percentage and order fulfillment rates. Also, it was found that the operating conditions such as the distance and the order frequency had great impacts on the performance of the logistics models.