Are you still using manual processes when it comes to your route planning methods? Are you ready to make the move to a more advanced automated route planning system? Is it time to think about upgrading your routing software to the best available?
The answer, in almost every case, is: Yes.
Even if you have a relatively small fleet of delivery vehicles or you’re performing more or less the same deliveries to the same customers on a regular basis — call it a milk-run scenario if you will — there are huge financial and service benefits to installing advanced route planning software into your operation.
Like most businesses, you’re probably facing the tactical and strategic challenges of an ever-changing marketplace and ever-escalating demands from customers. This is where advanced routing software is no longer a nice-to-have, but a competitive must-have.
Let’s look at some of the questions to ask when determining if it’s time to embrace the wide-ranging advantages of this technology.
There’s a cost to serving each and every one of your customers, including delivery costs. In a manual route planning environment, it’s hard to calculate these costs. This can lead to profit-draining decisions —like saying “yes” to a customer request for twice-a-week delivery to a remote location.
In contrast, advanced route optimization software gives you a detailed, easy-to-view analysis of exactly what the cost to serve each customer or delivery site is. You may be surprised at what these hard figures reveal.
Although every business is different, each company can get important indicators of true profits by monitoring transportation costs over time and measuring how they’re changing. Advanced route planning software can show you where you can plan and execute routes so they reach maximum efficiency (and lower costs) while satisfying customer requirements.
Monitoring performance is critical to your business, because it shows how you’re living up to the promises you have made to your customers. If you’re still routing manually, or with rudimentary software, you won’t be able to easily produce reports that allow senior executives to assess delivery performance.
That makes it much harder to handle complaints from customers and to set realistic charges when it’s time to renew a contract.
Advanced routing software gives you a clear and immediate view of service levels in the form of percentage of on-time deliveries, so you can be extremely well informed with detailed information when interacting with customers.
The solution also forms an important feedback loop for gathering and utilizing information about the reasons for late or missed deliveries, including habitual delays in unloading, chronic congestion at delivery sites, lower-than-expected average road speeds and any number of other factors that prevent drivers from delivering a load on time. By incorporating these findings into plans for future routes, you can produce accurate and achievable schedules that increase your chances of on-time delivery — and stellar performance.
Are your customers pressing you to offer later order cut-off times? Are you paying overtime for picking and packing in the warehouse on the graveyard shift in order to get delivery vehicles out of the distribution center in time to meet delivery deadlines the next day? Are multiple staff members at different locations having to take hours out of their day to put together routing plans when they could be doing other things?
All of these could be signs that your route planning process is taking too long.
When you implement advanced route planning software, it takes minutes rather than hours to produce efficient, achievable route plans. That frees up your staff to perform more critical tasks. Getting a route plan firmed up much faster also gives you the option of either pushing back order cut-off times or reducing third-shift costs in the warehouse because you can pick and pack orders earlier in the day.
Truck driver turnover in the U.S. currently stands at near 100% annually, according to the American Trucking Associations (ATA), and it costs an average of $8,200 to replace a driver, according to TruckersReport.com. Drivers leave for many reasons, but survey after survey shows they’re as concerned about conditions as they are about pay. If driver shifts are lasting longer than planned, route plans leave drivers stranded far from home or if drivers feel dispatchers (not the software) are assigning them the least attractive routes, then you’ll likely find drivers tempted away by competitors.
With advanced route planning software, the sequence of deliveries automatically makes the best use of the driver’s time. For example, the plan can factor in the times when loading or unloading facilities are actually open and functional, and send drivers to those points at the right time. The software automatically calculates how many hours a driver has already driven and assigns routes that will keep him or her within hours of service (HoS) limits, meaning drivers don’t need to worry about being compliant with HoS regulations. Even better, the algorithms maximize the number of hours drivers work within those limits, increasing their earning power. And, of course, computers don’t play favorites with route assignments. All of this makes for happier drivers who stay.
These are just a few areas of concern that advanced route planning software addresses. For more details, read our Ultimate Guide to Route Optimization.
Distribution businesses that don’t invest to create a more efficient fleet operation tend to view that fleet as a necessary evil. The attitude: further investments simply reduce profits.
But that’s short-sighted thinking. Even for distribution businesses with smaller fleets, the ROI on routing software is attractive. Payback comes not only from reduced fleet operating costs, but also improved customer satisfaction and faster, streamlined processes throughout the organization.
Implementing sophisticated routing software can transform the transportation department from a cost center into an engine for profitable growth. To find out more about why this technology is a must-have in today’s business, contact Paragon, from Aptean, today.
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