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Use strategic planning to reduce transport costs

The transport planning office in any logistics operation is a pressurised environment. The day-to-day challenges caused by customer demands for tighter time windows and more accurate communication; the ongoing driver shortage; and the need to keep control of rising costs make it difficult to sit back and wonder “what if”.

However, the benefits of doing just that could be considerable, helping you or your transport planners to alleviate some of the daily challenges that cause the pressure.

The power of what if?

Have you ever wondered what would happen if you made small changes to your transport plan such as tightening delivery windows or asking your drivers to start 30 minutes earlier but been reluctant to suggest such changes because of the resources required to carry out a small trial?

Beyond the day-to-day efficiencies gained from automated planning, route optimisation software also has the power to let you calculate the cost – and service implications – of such operational changes. Using your own transport data, you can change the parameters used in your live planning operation and test a wide range of potential changes such as

• The impact of adding larger capacity trailers to your fleet
• The cost to serve a series of new delivery locations
• The impact of increased order volumes during a peak period

Using route optimisation software for strategic planning lets you quickly and easily determine what the effects would be over time. Could you reduce your fleet size, increase drops per vehicle and ultimately reduce your transport costs? Instead of having to spend time collecting data, carrying out a trial and incurring costs, you can see the impact of the changes without spending a penny. You can also use the results to create a water-tight business case for change – with a fully costed proposal that makes you look good and the idea difficult to refuse.

How much does strategic modelling software cost?

As a Paragon customer managing your own fleet, you can use the same copy of routing and scheduling software for both daily planning and strategic modelling. Once you have completed your transport plan for the day you simply take a copy and, using data from your live operation, change the relevant parameters in order to determine the effect of specific changes. For example, extend the delivery window required when delivering certain products because you want to offer a fitting service, or change the shift start times of a number of your drivers.

Once the change is operational and you are seeing the benefits of being able to do more for less then it’s time to think about the next scenario(s) you want to test, ensuring a process of continuous improvement. If you integrate your telematics system with your route optimisation software using Paragon’s Route Execution module you will be able to watch the results of your operational change in real-time as your transport plan is executed.

Can I use Paragon to model potential transport savings for 3PL customers?

If you are responsible for transport planning, or business development at a 3PL then your requirements may be slightly different. You might be analysing future customers’ transport data to work out how you can run a potential customer’s operation more effectively and only need Paragon operationally once you have won the contract. The same principle applies. Uploading the data in to Paragon’s route optimisation software allows you to fine tune parameters and build a compelling business case for you to win the contract. Read more about 3PLs using Paragon to reduce transport costs and improve service levels.

How do other transport operations use Paragon strategically?

Let’s have a look at some transport operations that are already use Paragon strategically:

Blakemore Logistics

Blakemore Logistics distributes to many of the SPAR stores across England and Wales. The business has changed considerably in recent years. Delivery locations have diversified with the addition of sites such as petrol station forecourts and motorway service stations and the company has enjoyed a period of year-on-year growth.

Blakemore Logistics uses Paragon’s software to model different aspects of its distribution operation to understand the benefits of any proposed changes. For example, the company used Paragon to understand the potential benefits of adding double-deck trailers to its fleet. Read the case study to find out more about the transport savings and business benefits Blakemore Logistics has achieved.

LF&E Refrigerated Transport

Specialist temperature-controlled logistics company LF&E has successfully used Paragon’s routing and scheduling software strategically to determine the best location for a new depot. They had already identified potential sites and were then able to use the software to plan actual routes from each location to analyse the impact on the transport operation. In particular, LF&E was able to identify a potential 800-mile a day route saving for one of the sites which when fully operational will reduce cost per delivery and enable the fleet to handle more consignments. Read the full LF&E case study.

Eden Farm

Eden Farm is a frozen food and ice cream wholesale distribution company. Since implementing Paragon they have been able to reduce vehicles and benefit from greater visibility of their delivery operations. The seasonal nature of their business means that they have also benefited from using Paragon as a scenario planning tool, modelling what would happen if a large number of customers suddenly increase their orders during a sunny spell.
Read the Eden Farm press release

Bigger changes to evaluate?

In some cases, your company may want to evaluate a bigger business change that extends beyond the transport office. For this type of exercise, we have a set of high-level business modelling tools. These include Territory Optimiser that can help you balance workloads across territories and Fastnet which can help you evaluate the financial impact of changes to your overall distribution network.

Ready to reduce transport costs?

The benefits of route optimisation software go well beyond the initial transport savings created by more efficient routes. It can create the foundation for years of continuous improvement, as well as the ability to transform your service levels and turn the transport office in to a real differentiator for your business.

Our team of account managers and support consultants have many hundreds of years of experience in helping companies like yours between them. Why not get in touch to talk through your requirements in detail?


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