Route planning and route optimization. Both terms sound similar. Both of them have something to do with mapping out routes. But what do they mean? And are they the same?
In this post, you will see what’s the difference between route planning and route optimization. You’ll take a deep dive into their meaning and how each one works.
After you read through the post, you will get a clear picture of which is which, and which one can have the best impact on your business.
So without further delay, let’s start.
Route planning is closely connected with route mapping or route sequencing. Route planning is the process of creating driving directions (or routes) for multiple destinations on the map and putting them into an order that makes the most logical and practical sense.
Each destination is based on a service or delivery order and represents the customer’s home or office address. In most cases, the orders are put on a list and imported into a route planner, or route planning software.
Route planning software lets you map out the most direct path from your starting point to each of your destinations in the shortest possible order. Technically, it creates a route that links point A with point B, all the way to point Z.
A great example of route planning software is Google Maps. Using Google Maps to map routes with multiple destinations is a solid way to plan trips and journeys with a clear start and finish.
GPS is another good example of a route planner. And a lot of businesses rely on GPS tracking devices to manage supply chains, delivery networks, and both internal and external fleets.
On the surface, automatically mapping routes with multiple stops using route planning software is a much better solution than using a pen and paper pad or excel sheets.
But managing routes for deliveries and field service operations isn’t as simple as creating a path from point A to point B. And once you dive beyond the surface, these problems become clear.
Route planners don’t take into account other factors that affect your operations, such as driver schedules, customer service, or reverse logistics. Not to mention, cost, output, and efficiency.
So once you dive beyond the surface, the problems become clear. And if you want to reach your company’s full potential, you need to find another, better solution.
Route optimization is a better way to plan, manage, and map routes. Route optimization helps you to excel in what you do by letting you create the most efficient routes based on other factors and constraints besides distance.
When mapping a route, true route optimization software takes into account relevant parameters such as:
Take a look at the complete guide to route optimization software for 2020.
Route optimization plays a dual role when raising the efficiency of your delivery or field service.
First, it improves customer service. And at the same time, the software makes it easier to track, monitor, carry out, and improve operations.
Route optimization makes customers more satisfied with their experience because it lets you meet their distinct needs and requirements when planning delivery schedules.
For example, route optimization can enable customers to pick out specific delivery windows (date and time) at checkout. Having a say when the delivery arrives helps customers feel more comfortable about their decision to choose your service.
But customers value choice beyond when and where their purchase arrives. Not offering flexible delivery options is one of the biggest mistakes in delivery management. Route optimization can help build up your offer to include:
More choice means greater convenience. According to a survey about the future of CX, almost 80% of customers see convenience as an important part of their experience, while 51% of them are prepared to pay for it.
So, if route optimization makes it more convenient for people to use your delivery, it also means that they are more likely to spend their money with you. (Rather than your competitors)
From a business perspective, it makes sense to boost the bottom line by giving shoppers a better customer experience.
However, route optimization doesn’t just improve customer service. It also gives you greater control over your operations and how you manage them. And the benefits of that are huge.
Are you still planning manually routes? It’s time to change.
Route optimization software lets you plan driving directions automatically. Instead of spending hours trying to formulate the best route, you and your planners can do it in minutes.
All you have to do is input a list of orders into the dashboard (in bulk or as a .csv file), and the system calculates the optimal route in a few minutes.
The software factors in all of the relevant constraints for every route and every driver, so you can easily plan your routes every single day.
Not everyone is equipped to handle route planning. That’s why companies that don’t use planning tools regularly rely on a professional or a team of professionals to manage these complex tasks.
Route optimization software makes better use of these key individuals.
First, the software makes it faster to plan, dispatch, and manage routes. When teams spend less time on route optimization, they have more time to focus on other key operations, like handling reverse logistics.
The intuitive user interface of route optimization software resembles standard SaaS solutions and apps on the market. That cuts the learning curve down to a few days, rather than weeks or months.
So instead of relying on one professional with advanced knowledge of distribution, supply chain networks, and the local geography, you can train multiple employees to handle plan routes with all of the relevant information at their fingertips.
And when the route planner is out of the office, the operations can continue to run smoothly since you have a replacement close at hand to cover him.
Once your drivers start their routes you lose control over where they are, or what they are doing. Technically, you remain in the dark when it comes to last-mile delivery, which means two things:
Route optimization software takes these problems head-on because it allows you to adopt a cloud-first approach to delivery logistics.
Cloud technology lets you keep track of all drivers in real-time, either by tracking their phones’ geolocation or the telematics in their vehicles.
The coordinates for each driver instantly update into the system and show up on the map on the dashboard. From there, operations managers and team leaders can track progress as a driver moves from one location to the next.
At the same time, drivers have access to routes via a driver app on their phones. Dispatchers and operations managers can add new tasks to driver schedules, while the system recalibrates the route to include the new stop.
The real-time routing, scheduling, and tracking capabilities of route optimization software make it possible to assign supply pick-ups, deliveries, and service visits as the orders for them arrive.
Real-time visibility and control make your teams more flexible, which makes it easier to increase service speed, accuracy, and build an agile delivery operation.
Operating a delivery or field service requires significant investment to get started (infrastructure, vehicles, equipment), as well as overhead to run smoothly (payroll, utilities, maintenance).
One way you can reduce these costs is with route optimization software.
Automating the route planning process can lead to a significant cost reduction of both capital and operational expenses (as much as 50% according to delivery statistics).
On the one hand, real-time visibility lets you analyze operations and track key metrics in delivery logistics to know where your assets exceed the needs of your business. In turn, you can use the data to right-size your staff, vehicles, equipment, or infrastructure.
For example, tracking operations when demand exceeds capacity (peak seasons) helps you downsize the fleet so it remains cost-effective even when business is slow.
On the other hand, monitoring KPIs helps you to increase the efficiency of your operations by finding key opportunities to optimize performance and reduce the waste of resources.
For example, optimizing routes reduces distance and time to destination, as well as out-of-route mileage. Lowering these metrics can help you to decrease the fuel consumption of your fleet.
Best of all, route optimization lets you raise efficiency and cut costs at scale, even when you implement delivery tactics to grow your operations.
Much like route planning and route optimization are worlds apart, no two software solutions are the same. And you have to find the right one to match the ambition and needs of your business.
Luckily for you, these days there is a lot to choose from.
Route optimization is now a key component of specialized or end-to-end solutions, like delivery management software. But even as a platform module, all of these solutions have a few things in common:
1. Automatically planning routes.
2. Adding all relevant parameters to formulate routes.
3. Improving customer service and experience.
4. Increasing the speed of the route planning process.
5. Raising output and performance efficiency.
6. Providing real-time visibility and control over operations.
7. Continuously improving the operational efficiency to cut costs.
When you add it together and step away from the map, you can replace route planning with true route optimization.
What do you think? Is it time to take the next leap forward? Why not right now?
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