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How Can Fleet Management Route Optimization Boost Overall Efficiency?
Learn why fleet management & route optimization are important to unlock your fleet’s potential and what to look for in a fleet management routing solution.
If you own a business that involves fleet management - such as delivery services or services that make on-field calls - you are well aware of how overwhelming it can be.
And if, on top of that, you want to excel in your line of work, i.e. achieve optimal efficiency at the lowest possible cost without compromising customers’ satisfaction, things get even trickier.
In this blog, we’ll spell out all you need to manage and optimize your fleet usage, including:
- Why good fleet management & route optimization is of pivotal importance for any serious business today;
- How you can unlock your fleet’s ultimate potential by well-planned and carefully executed fleet management route optimization;
- And last but not least, what to look for in a good fleet management route optimization solution.
- Fleet management route optimization is a necessity for improving overall operational efficiency;
- Rising costs and customer standards combined with heavy traffic and busy roads make fleet management route optimization more complex than ever;
- Finding a solution that encompasses the features needed for covering all the necessary areas - customer satisfaction, fleet management & route optimization - is pivotal for success;
- eLogii is the most comprehensive, up-to-date solution that offers all of this essential functionality and more
What is fleet management, and why is it so important?
Fleet management is one of the essential parts of your supply chain logistics.
Sounds pretty straightforward, right?
However, there is nothing straightforward about actually doing it, as it involves taking care of various issues, including but not limited to:
- Vehicle acquirement and maintenance;
- Vehicle telematics;
- Driver, speed and fuel management;
- Compliance with various regulations;
- Safety on the road;
- Route planning, etc.
The main aim of fleet management is to ensure that the fleet runs smoothly, on time and stays within the set budget.
And that’s precisely what makes fleet management such a crucial matter to pay attention to, as optimization of your fleet’s usage and efficiency will save you both time and money.
Foregoing fleet management altogether - or being sloppy about it - means you’ll be left with no guard against all of the numerous challenges fleet management is facing today, such as:
- Staff costs - without proper management and optimization, you’ll be forced to continuously hire new drivers and pay overtime work;
- Fuel costs - with fuel prices soaring, the more unnecessary time your vehicles spend on the road and/or idling, the more fuel will be burned, which will amount to more total expenses;
- Safety issues - with an ever-increasing number of vehicles on the road, traffic is becoming less safe. In fact, someone is killed or seriously injured on UK roads every 22 minutes. That’s why fleet management also involves ensuring that vehicles are in perfect order, that drivers are capable of performing their tasks and that everything complies with health & safety regulations.
What types of fleet management solutions exist?
One thing is clear - not investing in fleet management is simply not a viable option for modern businesses.
And even though there are specialised fleet management systems on the market, we advise against using them for several reasons, including the following:
- They are charged per vehicle, meaning the costs can quickly stack up as you scale;
- There’s often a limited number of stops per route;
- They seldom offer capabilities for optimising loads to specific vehicles and routes;
- There is no dynamic routing functionality, meaning they cannot adjust to changes that happen on the road;
- They are significantly lacking regarding customer satisfaction, as they don’t have dynamic ETA calculations, customer notifications, POD collection functionality, etc.
Today’s market requires more advanced solutions that can tackle more than the mere basics of fleet management.
What is route optimization, and why is it so important?
Route optimization is the process of finding the shortest and most efficient route in a given set of circumstances.
To find the route that’s the most efficient, numerous factors must be taken into consideration, including:
- The number and location of stops;
- Deliveries or customers that are a priority and have to be taken care of first;
- How busy a certain road usually is;
- Specific delivery and service duration times, etc.
And these are just a few of the numerous parameters that influence route optimization.
Given the hectic pace of life nowadays, it’s inevitable that things change quickly and unexpectedly, meaning that the route that was optimal in one moment can become your downfall in the second.
Moreover, if you’re keen on unlocking your optimal efficiency, you should know that it involves more than routing and fleet usage, as we’ve mentioned before.
Another critical point of optimization is customer satisfaction because a lousy delivery experience amounts to customer churn before you know it.
So it’s safe to say that route optimization has never been as challenging as it is today.
And why should you matter about route optimization?
Well, for one simple reason - route optimization is the #1 thing that can help you save money, win over new customers and retain existing ones.
Route optimization - when done right - will effectively reduce your costs and enable you to provide exquisite customer service at the same time by:
- Finding shorter, more efficient routes which mean less fuel cost, less wear and tear on vehicles, fewer driver hours, lower emissions, etc
- Enabling better ETA planning and communication which means higher customer satisfaction and reduced risk of failed deliveries
- Allowing more flexibility and adjustment to unexpected events.
This alone justifies route optimisation as essential to your overall last-mile delivery logistics.
What types of route optimization solutions exist?
While you can do all of this manually, at least in theory, the truth is technology can significantly leverage your efficiency regarding route optimization, as it will perform all the necessary tasks faster and much more accurately than a human could.
However, making sure a solution has what’s necessary for adapting to changes that can and will inevitably happen when the vehicles are already in transit is vital for success.
And although there are tools that are focused on route optimization first and foremost, like OptimoRoute, for example, that does not make them an ideal choice for optimization as a whole.
Putting some effort into finding a tool that can provide you with all the additional functionality needed for unlocking your fleet’s optimal potential, such as eLogii, will go a long way.
To put it in the words of one of our satisfied clients, Ananas:
“We looked at a number of last-mile platforms on the market and few had the capabilities to handle the level of scale we require and provide the level of customer experience we are looking to give our shoppers.”
Care to see how eLogii’s optimization capabilities can boost your efficiency too? Book a demo in under 2 minutes, and we’ll provide a custom-tailored experience of eLogii in action.
What distinguishes a good from a great fleet management route optimization solution?
We’ve seen that fleet management & route optimization go hand in hand when you want to ensure exceptional operational efficiency and outstanding customer experience.
However, there are many fleet management route optimization platforms out there, meaning that it can be quite troublesome to find the right one for you.
Luckily, there are features that differentiate a great fleet management route optimization platform from software that is just ok at best.
We’ll split these features into 3 main areas a great fleet management route optimization solution needs to cover:
- Fleet management and operational efficiency
- Customer satisfaction
- Route planning and optimization
So, if a solution has most - or, ideally, all - of the features listed below, rest assured that you cannot go wrong with using it.
And now, let’s look at each category and its pertaining features separately.
Fleet management and operational efficiency
There are several noteworthy features in this category.
1. Highly customisable optimization and operational parameters
Setting up and customising various operational parameters will help you make the most of your fleet. What that means for your business is:
- You won’t have to constantly hire more drivers or overwork the ones you already have;
- You’ll use your vehicles’ at their optimal capacity, so you won’t have to buy an infinite number of new ones as you scale;
- The optimal usage of your vehicles will minimise their wear and tear, allowing you to use them longer, etc.
Thus, the key feature an excellent fleet management route optimization solution should have is the option that enables optimal allocation of loads to vehicles.
Your solution of choice needs to consider the kind and requirements of each load as well as the type, capacity and characteristics of the vehicle and allocate the loads accordingly.
This can be done by having options for setting up vehicle types and their particular characteristics (e.g. refrigeration, loading equipment, restrictions on movements on certain roads), as well as alternative ways of calculating load, including weight, volume, and others.
That way, you’ll ensure that every package is matched with the vehicle most suited for its safe and efficient transportation without exception.
2. Driver management
Having a comprehensive overview of your drivers’ skills, performance, schedules and availability at a glance will make fleet and operations management much easier and will consequently help with amping up your efficiency.
A driver management dashboard could enable you to do various things, such as:
- Assign the most demanding routes and tasks to drivers that have the necessary skills - and do it seamlessly, as you’ll have insight into any driver’s skill level and performance analysis within reach at any time;
- Ensure that each driver has rested enough between two routes - this is crucial for both safety and compliance with the necessary legislation, as each country has its own policy regarding this. Setting up breaks schedules and their durations will enable you to keep track of this easily;
- You’ll know at any time which driver is available to work and their overall working schedule, including any exceptions such as holidays, etc.
And why is this so crucial? Well, for starters, it will help with minimising overtime work, while the data on drivers’ breaks, preferences, and skills will be taken into consideration when designing optimal routes.
Another essential thing here is enabling drivers to feedback information from the field, which can help significantly improve performance.
The easiest way to achieve this is by using a dedicated mobile app which will enable things such as:
- Making notes on deliveries (e.g. about neighbours who are willing to take in packages when the customer is out);
- Live communications with control, as well as customers;
- Accounting for each driver’s current location in real-time;
- Vehicle telemetry (e.g. time spent in/out of the vehicle), and more.
3. Performance analytics
Keeping track and analysing your performance is essential for knowing whether you’re hitting your designated KPIs and what, if anything, needs to be changed or improved.
A good solution will collect and report on:
- Driver performance - whether it’s deviations from the planned route, adherence to ETAs, speeding infractions, etc
- Vehicle and driver cost analysis - this provides insight into the daily route and other operational costs along with the factors that influence them the most;
- Customer satisfaction - given the importance of this factor in revenue generation and retention, it’s beneficial to be able to collect reviews and feedback from customers and feed it directly in alongside these other KPIs.
4. Options for integration with the entire supply chain
The perfect fleet management route optimization solution should also have options that enable seamless integration with all the other parts of the supply chain.
Being able to easily import and export data from various other tools and databases and connect other technologies with your solution of choice, will allow the whole operational chain to work smoothly.
So, finding a solution with a well-designed API can help you both integrate last-mile delivery optimization with other parts of the process and save you vast amounts of developer time in getting your tech stack to work efficiently.
A good API and webhooks mean you’ll easily integrate it with all the other tools and technology you use to manage other supply chain operations like order processing, inventory, etc.
Making your customers happy and ensuring that your relationship continues to thrive will be much easier with the help of a few features.
1. Real-time notifications
Keeping customers in the loop on their deliveries’ current whereabouts and ETA is the basis of an excellent customer experience.
So, your solution should be able to:
- Send SMS and/or email notifications on precise ETA for every stop at every critical stage of their route;
- Recalculate ETAs and immediately notify the customer in case something changes;
- Provide customers with a possibility to easily track their deliveries’ exact location.
2. POD Collection
Another key factor of customer satisfaction is enabling seamless proof of delivery (POD) collection that can be easily traced if needed.
The use of technology makes it possible to use several methods of proof of delivery, which are impossible to tamper with as they are often time- and geo-stamped. That also makes it much easier to quickly determine where any package ended up at.
Those methods can include:
- Barcode scans
- Alphanumeric and QR code scans
- Cash-on-delivery confirmation, etc.
Ideally, you’ll find a platform that supports all of the above POD methods, allowing customers to choose one according to their preferences or the one best suited for a given package.
Last but not least, the following couple of features are an absolute must-have for a solution to provide first-rate route optimization
1. Dynamic routing
Dynamic routing includes more than simple route planning and optimisation.
This routing considers all the possible unforeseen circumstances that affect the ETA and the optimal route that happen while the vehicles are already in motion.
What this means is that a platform’s route planning algorithm needs to be able to quickly adapt to any change that happens in transit (such as traffic jams, accidents, road closures, weather conditions, etc.) and automatically find the next optimal route and recalculate the ETA.
So, the basics of dynamic routing include the following:
- Automatic real-time rerouting in case of unpredicted events and recalculations of ETA;
- Live monitoring, which allows you to know the whereabouts of every driver and vehicle at any given moment;
- Enabling dispatchers to change the order of deliveries on the go or add/remove them.
When you manage large fleets or complex multi-day or multi-depot operations, some other advanced options can always come in handy, including:
- Long-distance multi-day routes
- “Return to depot” functionality - where a driver visits the depot mid-route
- Custom start and endpoints
- Pickups without corresponding drop-offs
- Multi depot operations management
Geocoding is the process of converting addresses into geographic coordinates.
And if you’ve ever followed your GPS app to an address only to find yourself outside a back gate with the front door around the other side on another street, you’re more than familiar with the perils of poor geocoding.
Different software tools use different geocoders, some of which are better than others, so you should pay attention to this as well.
Without adequate geocoding, you’ll often find your vehicles stuck in back alleys and side streets.
The bottom line
The need for fleet management optimization solutions that can solve more than just one delivery-related problem at a time has never been greater nor more urgent.
With plenty of options on the market, finding and picking the right one for you can be overwhelming.
However, now that you know what the features you can’t do without are, finding a solution that will deliver - no pun intended - will be that much easier.
In fact, one such solution that offers all three categories of features needed for boosting your business’s efficiency is eLogii.