Reduce Your Transportation Costs With Route Optimization
What Is the Problem?
Last mile transportation costs too much.
Route optimization software reduces the dependency on the manual process of assigning pickups, deliveries, or service stops to specific vehicles or drivers.
The manual process is inefficient because the human route planner can only mentally picture a relatively small number of stops at any one time. Beyond that threshold, the routing process becomes one of solving multiple small problems, rather the one larger problem.
And this “divide and conquer” strategy misses many opportunities to reduce costs.
How about a solution that…
- Saves on fuel costs.
- Saves on labor costs by reducing overtime.
- Reduces dependency on human route planners.
- Allocates least costly vehicles first.
- Ensures the right vehicle is selected for each stop.
- Ensures that customer time windows are honored.
- Provides better estimated delivery times.
Route Optimization is the Solution
Why Route Optimization?
Many places. Many ways to get there.
The problem is that many, if not most, routing tasks are complicated.
Most experienced human route planners can take a small number of delivery tickets without time windows or vehicle constraints and do a very good job of assigning work.
The human’s ability to make these efficient assignments degrades when there are more stops, or when the vehicles have capacity constraints, or when customers need to be visited at specific times.
Consider …
In many manual assignment processes, the work is first divided by town name or ZIP code. Stops that are very close together but end up in different groups may end up assigned to different vehicles.
Time windows are a customer service necessity, but when two deliveries on the same street need to be delivered at different times, the costs of using the same or different vehicles needs to be considered.
How stops are grouped and assigned to a route is the most important factor is reducing costs.
How Does it Work?
The three requirements for effective Route Optimization.
Route Optimization is more than just an artificial intelligence algorithm.
Geocoding
First, every address must be accurately located. A geocoding process will find the location of the front door at an address.
There also needs to be a way to change the location when the delivery is made to place other than the front door.
Travel Paths
Second, the times and driving distances between all possible points must be accurately computed.
There is no room for guesswork. What looks close on the map may be further apart due the lack of directly connecting roads.
Assignment
Third, a route assignment process must consider times and distances between stops.
It must also consider the physical limits of the vehicles, the skills of the drivers, and other customer requirements like appointment times and business hours.
Stops In and Routes Out
No application stands alone.
Route optimization is also part of a robust business process. Stop data is collected in an external application, assigned to cost efficient routes, and is then tracked and analyzed.
Where does it come from?
Any application that can export shipment data in a popular file format can provide the stop data for Strategic Movements.
Other applications, like QuickBooks, have an interface available to simplify the data transfer process.
For specialized interfaces, an Application Programming Interface (API) is available.
Where does it go?
After routes are created, they can be exported to handheld terminal and/or GPS applications using the transfer interfaces provided by the application vendor.
If we don’t already have an interface to your existing vendor, we are able to create one for you.
And, as actual data becomes available, it is brought back into Strategic Movements.
Using the Cloud
Times have changed.
In addition, software was licensed with a significant upfront price and recurring maintenance fees.
In the old days, an application for route optimization required a significant capital outlay. Regardless of how often routes were planned, sufficient computer hardware had to be available to provide a low cost routing solution.
With cloud computing, there are no capital costs other than the workstation used by the route planner.
Infrastructure As A Service (IaaS)
- No on-premises data center.
- No servers.
- No storage.
- No backup schedule.
- No networking hardware.
- No security worries.
- All computing resources accessed remotely.
Software As A Service (SaaS)
- No upfront license costs.
- No annual maintenance fees.
- No downtime for upgrades.
- Can be accessed anywhere
- Easily scalable. Grows as you grow.
How Much Can You Save?
Costs to Consider
- Mileage costs – What does it cost per mile for fuel, depreciation and maintenance?
- Overtime costs – What do you pay your drivers every day? What would you save if your drive time was reduced by 15%?
- Planning costs – What would you save if your route planning time was reduced to just a few minutes each day?
| (1) Total Daily Miles Driven | |
| (2) Cost Per Mile | x |
| (3) Total Daily Mileage Cost | = |
| (4) Estimated 15% Savings | – |
| (5) New Daily Mileage Cost | = |
| (6) Overtime Cost Reduction | – |
| (7) Planning Cost Reduction | – |
| (8) New Estimated Daily Cost | = |
| (9) Savings = (4)+(6)+(7) | ……………………. |
Ready to Start Saving?
Every organization that has not implemented a route optimization process is leaving money on the table.
An integrated business process with route optimization will reduce costs.
Cost reduction benefits you by improving your bottom line in the short term, and will allow you to grow without incurring more costs long term.
Without route optimization, unnecessary costs continue, a drain on your organization’s finances.
We are ready to help! Our team has been in the business of providing route optimization solutions since 1989.
We have seen more than a few problems and have engineered money saving solutions for them.
We can show you how to save now.
We can use your current data to prepare a demo showing how we would solve your problem.
Strategic Movements
E-Mail: contact@strategicmovements.com
Contact us today for a demonstration and evaluation.
Hours of operation: Monday to Friday, 9:00 to 5:00 ET