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Use strategic planning to reduce transport costs

Use strategic planning to reduce transport costs

The transport planning office in any logistics operation is a pressurized 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 all make it difficult to take the time to answer “what if” questions about making changes.

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 in the first place.

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 optimization 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 new customer or customer location
• The impact of increased order volumes during a peak period

Using route optimization 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 comprehensive analysis of costs that makes you look good, and the idea difficult to refuse.

How much does strategic modeling 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 modeling. 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 effects of specific changes. For example, you could find out what would happen if you were to extend the delivery window required when delivering certain products in order to offer an installation service. Or you could explore changing the start times of shifts for 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 in-cab telematics system with your route optimization 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 analyzing future customers’ transport data to work out how you can run a potential customer’s operation more effectively, proposing realistic routes, offering an appropriate level of service in the most cost-effective way, to win the contract. The same principle applies. Uploading the data into Paragon’s route optimization software allows you to fine tune parameters and build a compelling business case for you to win the contract.

Read more about how 3PLs use Paragon to reduce transport costs and improve service levels.

How do other transport operations use Paragon strategically?

Let’s look at a couple of transport operations that are already using Paragon strategically:

V&V Supremo

Chicago-based V&V Supremo makes upward of 400 deliveries of authentic Mexican dairy, meat and corn products every week in the Chicago area, as well as to retail customers throughout the US.
V&V Supremo’s new agility in truck routing and scheduling facilitates strategic decisions and helps V&V Supremo play out what-if scenarios. “We have aggressive growth plans in the future, and we want to maximize what we’re getting out of Paragon – not just operationally, but strategically,” he said. “For me, it’s all about continuous improvement.”

Read more about V&V Supremo’s use of Paragon

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.

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 modeling tools. These include Territory Optimizer 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 optimization 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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