Whether you manage an in-house fleet with dedicated drivers, use agency staff or are a 3PL providing distribution services to your clients, route optimisation software can help you reduce transport costs in your operation.
A bold statement? Typically we find transport operations that move from manual planning to Paragon’s automated route planning can reduce transport costs by a margin of 10 – 15%. Whether your annual transport spend is £10m or £500k that’s quite a saving.
So where can you expect to reduce costs? To start off with savings are usually found in these areas:
1. Reduced fuel costs
Delivery schedules created by route planning software are more efficient so will typically result in cutting miles and fuel.
Systems such as Paragon’s route optimisation software will always produce feasible routes that factor in parameters such as specified delivery windows, vehicle size restrictions, loading times and driver working hours. Once all this data has been entered into your routing software, sophisticated algorithms will plan cost-effective routes and take account of all your operational constraints.
The result is a transport plan that creates the most efficient routes for every driver, every day.
2. Increased productivity
Route optimisation software automatically allocates deliveries to the most suitable trucks and the appropriately skilled drivers. This ensures that use of your vehicles is optimised each day and drivers can maximise the number of deliveries they complete during their shift.
For example, one of our healthcare distribution customers NRS Healthcare found that they increased driver productivity by 28% during their initial trial of Paragon’s routing software.
Automating your route planning process not only ensures vehicles are fully utilised on the outward journey, you can also schedule backhauls and collections of empty containers or packaging on the return leg. This maximises vehicle utilisation and driver productivity on every trip but also removes the need for additional trips for collections or expensive third-party costs.
More efficient use of your drivers leads to slimmed down agency costs, or in some cases no agency costs at all. This can really help you to reduce transport costs. For example, Marigolds & Onions cut their use of third-party couriers by 50% in the first few months of going live.
Still need to use agency drivers?
With Paragon’s route optimisation software, you can also plan agency drivers and vehicles needed to complete the day’s transport plan. Our flexible configuration settings enable you to prioritise your own fleet for work allocation, ensuring you are making the best use of your own vehicles before using agency vehicles.
3. Reduced fleet costs
If your fleet is travelling fewer miles and the number of drops per day increases then it’s highly likely you will be using fewer vehicles. Some customers find they can remove vehicles from their fleets while others simply find that costs for maintenance and replacement vehicles are reduced in line with the reduction in mileage.
4. A better customer experience
While not strictly a transport cost, customer satisfaction is obviously an important KPI for every team across your organisation. More accurate arrival times backed up by more frequent communication contributes to increased levels of customer satisfaction, reduced inbound call volumes and higher customer retention rates.
In addition to the cost reductions highlighted above, route optimisation software will also reduce transport planning time. In fact, many of our customers find that planning time is reduced from hours to minutes. This allows planners to focus on a wider set of tasks. It also eliminates the danger of dependency on one person’s knowledge. Useful when they take annual leave, or have to be out of the office for any other reason!
Automated route planning also ensures that planning is completed consistently.
Often, the person responsible for route planning wears multiple hats, and allocating time for planning each day can be challenging. Route planning might get squeezed in at the end of the day, or in between other tasks, making it difficult to consistently achieve a good plan. When you implement advanced routing software, you can be confident that you have an accurate and reliable transport plan every day.
In a larger operation, there can be multiple people planning routes; perhaps one at each site, each trying to fit in planning among other tasks. With automated route planning and scheduling, you can centralise the planning from one location, freeing up the remaining members of the team to use their skills and knowledge to benefit the business elsewhere.
A business case for investment in route optimisation software will obviously need to include a prediction of how quickly costs can be recovered.
Every company is starting from a different point of operational efficiency. Those with the most limited route planning tools – or no tools at all – usually have the most to gain from automation. Size is also a factor. If you have a £10m transport budget, and implementing route optimisation software saves you a minimum of 10%, your saving will obviously be significant. But, for many of our clients, a £50,000 saving in the first year is a compelling return on investment.
It is also important to remember that this saving will continue year on year so the lifetime saving created by the software could have quite an impact on your bottom line.
Once you have completed your daily planning process, you can also use Paragon’s route optimisation software for strategic modelling.
“What if” scenarios such as changing the capacity of your vehicles, implementing double shifting or adding new customer locations can all be modelled so you can understand the financial impact of every decision…without investing a penny.
There are many reasons for investing in automation. Perhaps your planning requirements are now too complex to manage manually; your business has grown too big; or it is too risky to depend on a single person to carry out the transport planning. Whatever the reason, Paragon’s route optimisation software is proven to drive operational efficiency, improve customer service levels and reduce transport costs.
Why not get in touch to find out how we can help you enjoy the same benefits?
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