Technology has reached the corners of all of our lives, we all carry smartphones, shop online, etc. but a surprising amount of delivery routes are still being planned manually in small and medium-sized companies alike.
We are able as people to get very good at repetitive tasks, to spot patterns etc. but we struggle when it comes to ‘zooming out’, seeing the bigger picture and spotting less-than-obvious opportunities for optimisation which are only evident when all the relevant and available parameters are taken into account at once.
By automating routing processes that are currently manual – businesses are generally able to save up to 50% of direct and indirect costs (driver time, fuel costs, vehicle mileage, routing and planning teams, customer service calls etc.).
Click on the link to find out what is route optimization.
Planning and route optimization software for small business, particularly powerful cloud-based solutions pay back extremely quickly with returns vs. manual route planning and reliance on routing teams being seen as quickly as 12 months.
When people plan routes, they take into account things such as postcodes, ‘priorities’ of customers, driver knowledge of a certain area etc. Very rarely are we able to properly take into account capacities of vehicles vs. packages and other goods to be transported with differing weights, sizes, shapes etc.
Here’s a complete guide to route optimization software.
Businesses that plan routes manually are usually highly dependent on one or a small team of people with entrenched working knowledge of distribution and particularly the geographical area in which distribution is taking place.
Without this key person operations quickly start to “fall apart”, the business “doesn’t know what they would do without him / her” etc. This person is the bridge between distribution businesses and their customers – they know what customers like, do not like, which drivers like certain routes vs. others, which vehicles are needed for certain job types etc. The challenge is that all of this information is held in one person’s head and it cannot be used in any kind of repeatable or scalable way. Further, what appears optimal on the surface (a smooth curve on a map etc.) as a result of it having been done that way for many years is likely actually not optimal in practice when it comes to distance driven, driver hours etc.
Orders / tasks enter the process often as print outs or orders received via an order management system. At that point somebody, often the route planner above sorts through the orders, groups them into service areas, postcodes etc. and then adds any particular ‘special requirements’ or exceptions on top – many of these are anecdotal in nature i.e. this is a big customer and therefore we should visit them before 10am because the sales team said it would be a good idea.
Recurring orders are generally part of ‘fixed routes’ – a topic worthy of spending a bit of time on individually…
Fixed routes are a sequence of drops / pickups which involves visiting the same locations on a recurring basis (i.e. daily, weekly etc.) – sometimes customers do not require visits and sometimes other tasks could be slotted into these routes. The challenge is with ‘fixed routes’ is that optimisation opportunities between different vehicles, drivers etc. will certainly be missed and at any kind of scale this means that there is quite a bit of waste when it comes to miles driven etc.
Here are a few reasons why it’s impossible mapping multiple delivery stops without software.
That said, many businesses operate fixed routes as a key component of their customer service strategies with the same driver visiting the same customers and getting to know them etc. and as a result they consciously sacrifice some of the margin that they know is on the table. The reality is that probably a balance between certain elements of a route being fixed and certain areas of a route being dynamic and adjustable daily, weekly etc. around the master plan would lead to the best all-round outcome for these types of businesses.
Often, lack of technology in the office (in terms of planning delivery routes) usually is a strong indicator for lack of technology in the cabs of vans, trucks etc. As a result drivers are usually provided run-sheets or pieces of paper on which they have the product that needs to be delivered and the location etc. They will then regularly rely on their own knowledge to put the individual stops into an order that they feel is optimal and will start driving. When the driver is delivering the items along their self-determined route, there will in most cases be no visibility over where he/she is or how he/she is performing against their plan (i.e. will all these deliveries be able to be made on time?).
In some cases, businesses might be using simple route planning software that doesn’t take into account enough operational variables or spreadsheets which have been created by the routing and planning team (which generally are a continuation of the ‘knowledge in head’ phenomenon which we discussed above combined with a few constraints i.e. when should this driver end their shift etc.
Sophisticated cloud-based route planning software looks at a whole multitude of operational constraints and parameters all in one go (capacities, dimensions, product mixes, particular regulations, required driver skills or vehicle requirements etc.) and therefore allows for an always-optimal route to be produced (either from scratch, or through the tightening up of a master plan as it gets closer to the point of actual execution). Further, sophisticated routing and scheduling algorithms are also looking into traffic, historical patterns around service duration at particular stop points etc. to ensure that routes are practically executable by drivers as well.
While orders have been getting to customers and drivers have been showing up to work, executing routes etc. likely a lot of value has already been left on the table.
Some of the value left on the table might come in the form of:
Could manual route planning be holding back your business? A team empowered with powerful tools which are able to be ‘tweaked’ or adjusted based on their knowledge is likely a winning combination when it comes to staying ahead.