Published 02 Jun 2021
WHAT IS ROUTE OPTIMIZATION AND FLEET MANAGEMENT?
Today, competition on a global scale is forcing companies to produce their products better, prepare them faster and deliver them faster. In addition, to maintain and increase market share in international markets, low-cost input supply is required to deliver manufactured goods to international markets at competitive prices without delay.
Route optimization and transport planning are central concepts for the logistics of the future. If you have hundreds of orders to satisfy with different time and capacity restrictions, it’s beyond human capability to get your resources to customers on-time while making sure you are not overspending on fuel and fleet costs. In such cases you need a process to find the most effective solutions for problems such as long driving hours, complicated routes, and excessive fuel consumption faced by field service businesses.
Nowadays route optimization technology has become one of the strongest tools to increase the efficiency of logistics and field service operations. There is a great potential for savings here, with the help of which the growing traffic flows can be managed with limited capacities. This can be supported by suitable route optimization software.
Why Is Route Optimization Important?
Whether you are a logistics company or distributing your own products, the feature that will set you apart from your competitors is that you attach importance to route optimization, which solves the problem of large number of vehicles and fleet routing. It saves you from excess fuel and labor costs and increases your service quality by enabling you to reach your destination as soon as possible.
Increasing the number of deliveries each driver needs to make in a day can increase your profits. However, the downside is that more deliveries equal more time behind the wheel, which may result in exhausted and dissatisfied drivers. One way to boost your driver morale while increasing the bottom line is by optimizing routes.
Route optimization software helps delivery companies work out the best and shortest routes possible for their drivers every day. This leads to shorter service times, allowing you to increase the number of deliveries sustainably and safely. Scheduling more reliable ETA’s and better adherence to delivery times, ensuring that travel times on multi-stop routes can be met as efficiently as possible, will increase your customers' satisfaction.
In determining the optimum route, many variables are evaluated together and the result is calculated by looking at the benefit-cost ratios among the presented alternative routes. Various factors such as the points to be visited and the frequency of visits, the characteristics and constraints of the vehicles to be transported, the characteristics of the load to be transported, customer demands and expectations, restrictions on the transportation network (road charges, traffic, road works, etc.) are taken into consideration.
Benefits Of Using Route Optimization Softwares
Enhances Customer Experience
The easiest way to ruin your customer experience is by delaying deliveries- or worse- giving them incorrect or vague delivery timelines. To protect your company’s profitability and reputation, your drivers must meet every delivery timeline. If you fail to deliver an amazing experience, customers will turn to your competitors- which will mean bigger trouble for your business. Avoiding this is simple — all it takes is an advanced route optimization software that builds optimal routes while considering factors such as weather updates, road conditions, traffic congestion, multiple stops, and specific delivery time windows. You will be able to provide your customers with real-time delivery updates, eliminating the problem of incorrect ETA’s.
You can also modify the existing routes to accommodate last-minute customer requests. Drivers can immediately see the changes on their route optimization app for iPhone or route optimization app for Android, follow the modified routes accordingly and still make deliveries on time.
Ensures Driver Safety
Optimizing routes is only half the battle. An effective way to reduce driver stress and the risk of stress-induced road accidents is providing them with an optimized and easy-to-follow route with turn-by-turn directions. Your drivers will be more focused and ready for any unforeseen hazards.
Investing in a route optimizer with GPS tracking feature will also allow you to see if drivers are speeding or driving recklessly. Long story short, a route optimization app can play a crucial role in reducing travel time and improving driver safety.
Increases Driver Productivity
Increasing the number of deliveries each driver needs to make in a day can increase your profits. However, the downside is that more deliveries equal more time behind the wheel, which may result in exhausted and dissatisfied drivers. One way to boost your driver morale while increasing the bottom line is by optimizing routes. Routing optimization software will ensure that your drivers are on the best route possible, in terms of both distances traveled and travel time. This leads to shorter service times, allowing you to increase the number of deliveries sustainably and safely.
Improves Fuel Efficiency, Reduces Costs
Fuel is one of the highest costs for any field service business. Poor route planning can negatively impact fuel efficiency and cut into your margins. Route optimization software will calculate the best route by considering factors like specific delivery time windows and backtracking. This reduces the driver's time behind the wheel, lowers fuel consumption and reduces wear and tear on the vehicle, which ultimately lowers maintenance costs.
Also, route optimization and fleet planning application is a green logistics technology. Because it helps your fleet generate lower emissions by reducing the distance covered.
Be Careful While Choosing Route Optimization Software
With routing requirements of companies becoming complex, the need for route optimization softwares arose. It is of prime importance that companies choose these softwares with utmost care according to save fuel costs, reduce overtime costs, and minimizing human dependency.
Businesses often think of route optimization software as a guide for telling them the shortest distance between point A and B. Even though route optimization software does provide that facility, modern-day software is a lot more than chaperones for guiding shipments from one location to another. The advanced solutions in route optimization allow route planners to manage a fleet, get driving directions, add multiple stops, improve productivity and increase service-level agreement (SLA) adherence. Route optimization can thus lead to saving fuel costs, additional pick-up/delivery stops, reduction of labor overtime costs and minimizing human dependency.
Here are the factors to keep in mind for selecting the correct route optimization software for your business:
1. Real-Time Traffic Consideration: Businesses should look for software that plans routes and calculates ETA based on dynamic, real-time data.
2. Order-Vehicle Constraints: Many a time software tend to focus on cold, hard data and ignore real life order-vehicle constraints. Softwares that consider order-vehicle constraints have a better chance of helping businesses in real-world scenarios.
3. Accurate Geocoding: Understanding ambiguous addresses and comprehending local contexts is the key to accurate geocoding. Softwares that have a stellar database of local addresses and apartment locations should be preferred.
4. Historical Data Inspection: Your route optimization software should examine historical data on three levels- riders, customers and time of the day. It should learn from past experiences and plan routes accordingly.
5. Rider Preference Consideration: To smoothen out the optimization software process, it is important that your software takes preferences from the on-ground team to phase out the traditional system rather than trying changing the entire procedure on a single go.
6. Change Management: In case your on-ground team is still adamant on their traditional ways, it would make sense for your software provider to assign you a group of on-field experts who convince your on-ground resources and make the transition smoother. Training modules, incentives and success stories from other organizations can help motivate your on-ground staff to get used to your route optimization software.
7. Analytics and Report Management: Your route optimization software should give you the ability to track and manage your entire operations in real-time on a single platform. It should allow you to track the actual routes vs the planned routes and should help you compare the performances of your different business hubs.
8. Dynamic Route Planning: Your software should have the capability of optimally handling on-demand orders along with scheduled orders. Rerouting on the go is another feature that is increasingly preferred by businesses. In case the orders/preferences of the customers change while the rider is out to deliver, your route optimization software should be able to change and create new routes for the rider.
When it comes to managing delivery operations, planned routes, and timely deliveries, route planners are the way to go. Every business is different, but there is no doubt that route optimization software will have a significant impact on your delivery operations and keep your company competitive. However, you should avoid using any basic route planners or even doing route optimization using Google Maps. This is because Google Maps is not designed for multiple destinations or multiple drivers. Remember, there are many benefits of route optimization, but only if done correctly… and that is only possible when route optimization is done through an advanced route optimizer. Software that plans routes intelligently to improve delivery efficiency and reduce costs will edge over others in the future.