Transportation planning is a complex problem – it is not just calculating routes from point A to point B. To meet customer service requirements, better utilize assets and lower costs, planners need to consider the many variables, and combinations of those variables, required to execute shipments. Data includes truck availability, equipment size and capacity, driver availability, traffic details, delivery time windows and dock restrictions, customer locations and unloading/loading times – way too many for a planner to manipulate effectively in his/her head.

Yet, many planners try to create optimal routes and schedules manually without the use of an advanced computer system or transportation optimization software.

Once the order cut-off time is reached, the manual route planner typically takes the printed orders for each of a number of pre-defined zones, sorts through them, and tries to put them into logical and realistic routes.  This is a very skilled task, requiring the planner to know a lot about local roads, customers and assets, and is very time-consuming, often taking a full day to create a plan.

Often the planner will have to start working on the plan before all the orders have come in. If a flurry of orders comes in later in the day, the plan must be redone. The planner is continually having to estimate journey times, think about customer open/close times and vehicle access restrictions, vehicle capacities and how long to allow per delivery, and so on. And all the while, he’s thinking about the counter-acting needs to minimize costs, ensure routes are realistic and fair to drivers and within legal drivers hours regulations, while also ensuring customer delivery requirements, such as time windows, are met. It’s not hard to imagine how this is both very time-consuming and very hard for even the most experienced planner to get right.

On the day of delivery, the drivers carry out the routes and return to the depot. In an ideal world, the transport manager would then debrief the drivers, find out if anything went wrong, and feed that information back into tomorrow’s route planning task. However, it’s rarely possible for a transport manager to debrief all drivers immediately upon their return plus what details he does receive have to be remembered and incorporated into future routes.

If your planner hasn’t quit by now, this process starts all over again the next day.

So when do you make the decision to move from manual planning to transportation optimization software?

Users of advanced transportation optimization software typically report cost savings and efficiency benefits of between 5 and 20% or more, depending on how efficient they were to start with. If we take 10% as a reasonable assumption, it’s easy to convert this to dollars. If you have 10 trucks, a 10% productivity gain equates to cutting your fleet to 9. The total operating cost of one truck ranges between $50,000 and $150,000 per year depending on the type of truck. Compare this with the cost of truck route optimization software, and you quickly get a return on investment – within a matter of months.

Even if you can manage to manually plan for 20 vehicles or more, there are often stronger factors, which force the decision, which can be:

  • Recessional factors – in a recession the pressure to cut costs and be more efficient increases dramatically
  • Customers demanding shorter lead times, which means accelerating the route planning process
  • Growing operations make manual planning impossible
  • Increasing operational complexity in order to improve efficiency makes manual planning much more difficult

Fortunately, eight hours spent planning manually can convert to a matter of minutes with computerized route optimization. Not only will you save time, but transport costs, greenhouse gas emissions and fuel usage will be greatly lowered too.

Find out more about route optimization software in our ultimate guide, including an outline of the main benefits and how quickly you can expect ROI.

Read the ultimate guide to route optimization software

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