In the highly automated world of distribution, where trucks have even begun driving themselves, a truly surprising proportion of delivery route planning by mid-sized companies is still done manually.
That’s a troubling fact when you consider automated route planning software has been available for over 30 years. Routing software reduces planning time from hours to minutes and can typically slash distribution costs 10% – 20% through lower fuel use, driver time, and vehicle costs.
The ROI timeframe on automated routing is often less than 12 months for companies with 10 or more vehicles. Still, companies rely solely on people, without the help of machines, to optimize delivery fleet efficiency. That can result in routes such as the top image shown below – a visual depiction of a manually planned route. The bottom image is an optimized route plan for the same delivery points.
Sometimes it takes visuals like this to objectively assess if routes are being executed using the least amount of time and miles.
For companies that manually plan routes, they are typically dependent on one person with a strong knowledge of distribution operations. Let’s call him Charlie, the route planning specialist.
Charlie is the critical link between customer orders and customer deliveries. He’s the guy who knows that your biggest customer likes deliveries on Tuesdays and Fridays and that, when the order includes a certain bulky product, a different vehicle needs to handle it. Good stuff to know – but it’s all in Charlie’s head and nowhere else.
A little scary, but we’ll come back to that later. Let’s first look at a day in Charlie’s life.
The manual route planning process starts when orders come in, typically electronically. These orders are often printed and segregated into different piles of paper, which then constitute the routes. Charlie may have a set of pre-defined fixed routes for certain customers, which determine the pile to which these orders are added. If new or non-standard orders come in, Charlie may enter the delivery zip code into an online map service to determine which existing route fits best for this new order.
These piles of orders are then handed over to specific drivers, who may execute deliveries in the defined sequence, or they may shuffle the deck to match their preferred route.
Not all “Charlies” use the same method. Some may use a slightly more sophisticated, but nevertheless outdated system. Others may have turbo-charged spreadsheets with built-in macros that do automated checks on things like whether all orders can fit on the truck and whether drivers can finish the route before Hours of Service limits kick in.
These spreadsheets are rudimentary, home-grown route planning tools whose effectiveness is almost entirely dependent on the skills of the individuals who created them.
With automated routing and scheduling software, orders are loaded into the software, then sophisticated algorithms create routes that meet agreed customer requirements, using the least amount of miles. The algorithms factor in elements such as available roads, average speeds, historic traffic conditions and many other considerations. This intelligent automation eliminates hours of planning time and, perhaps more importantly, the need for subjective judgements that can lead to inefficiency.
Delivery route plans that are inefficient or otherwise problematic don’t announce themselves with alarm bells and flashing neon lights.
They are typically an invisible but insidious component of a busy operating environment where things seem to be going pretty well. Even to savvy business owners, route inefficiencies won’t stand out on a P&L if they don’t know how to root them out.
Here are just a few of the things to watch out for in manual delivery route planning:
Not necessarily. In fact, specialized tools such as Paragon’s route planning and scheduling software are designed to make the most of knowledge that resides in human heads, adding more data in a constant improvement loop. The best results depend on smart people knowing how to make sure the software is configured to meet a company’s exact operational requirements.
In a manual route planning environment, companies rely on Charlie’s knowledge of customers and existing routes to get product out the door.
In an automated route planning environment, companies rely on Charlie’s ability to positively impact the bottom line by developing a system that constantly and progressively minimizes miles, fuel usage, maintenance costs and driver costs – all while maximizing customer satisfaction.
Either way, Charlie’s role remains critically important. But we like his earning potential more in the automated environment.
Download our whitepaper to find out how you can master technology to help you plan accurate routes, make the most efficient use of your vehicles, retain drivers and future-proof your transportation operation against changing legislation.
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