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Route Planning in Logistics: How to Do It Right & Overcome Traditional Route Planning Problems

Modern route planning and optimization tools are transforming the way enterprises execute delivery and logistics operations. A decade ago, customers were happy if businesses provided a home delivery service and were willing to wait for a few days for the said delivery. Manual route planning and scheduling of multiple stops would take hours and it was not always cost-effective and efficient. With the e-commerce industry booming, customer requirements have changed with respect to delivery windows being as short as within a few hours to same day delivery, route planning and optimization of the best route involving multiple stops is the need of the hour. The traditional methods of route planning are not able to deal with real-time events that affect businesses every day.

Current route planning and scheduling is a complex process which has to take into consideration factors like traffic, weather, customer availability, providing real-time tracking of orders to customers, optimization of routes to enable maximum delivery stops and many other factors to make logistics a viable and profitable service for businesses. By implementing automated route planner software, businesses can constantly monitor the changes that affect the delivery network in a real-time scenario thus allowing changes to the delivery schedule to optimize the most efficient and economic route planning available. 

What is route planning? 

Route planning is the process of computing the most cost-effective route involving maximum number of stops with minimum time taken for delivery of products. Businesses use real time route planning software to determine the best route to execute deliveries.

Why is Route Planning in Logistics important?

Route planning in Logistics is important as businesses need to accommodate customer delivery requirements, route availability, and vehicle issues to ensure low operational cost and customer satisfaction. An efficient route will help to save fuel, increase safety of vehicles, drivers and reduce overall expenses for business.

Route Planning Problem: Why Traditional Strategies Fail 

Traditional strategies involved in planning routes are not helping businesses to cope with the rapid increase in their growth with the existing infrastructure. Adding to this, are the changing customer expectations, shorter delivery windows and rising operational costs which make traditional route planning strategies outmoded. Traditional route planner is not able to keep track of delivery fleet in real-time, provide accurate ETAs for deliveries and reduce costs and empty miles.

1. Manual Dependencies

Study of past routes and problems encountered helps to chart a viable route for delivery. But lack of automation in data prevents businesses from analyzing information for critical decision-making. Easy availability of information would help in charting out various cost-effective strategies. 

2. Lack of Real-Time Visibility

Lack of real-time visibility leads to deliveries being mishandled, customer expectations not met and overall operation costs increasing. Real-time visibility would help businesses to track and monitor their fleet and tackle any exceptions or problems that occur in real-time.

3. Results in Poor Delivery Productivity

The absence of predictive visibility, cost-effective route planning and optimization of delivery operations will lead to poor delivery productivity. Traditional route planning would not be able to keep up with the demands of customers for timely, cost-effective and safe deliveries and provide real-time estimated time of arrivals (ETA).

4. Non-Compliance with On-Time In-Full Adherence

With expectations of customers for shorter delivery time windows, the pressure on delivery performance has intensified. OTIF measures the extent to which shipments are delivered to their destination according to both the quantity and schedule specified on the order. 

5. Increased Fuel Consumption

Traditional route planner is not able to map the most efficient routes possible to reduce fuel costs. Lack of information also prevents from monitoring fuel consumption and avoiding empty miles. 

6. Delivery Delays

The non-availability of real-time information on fleet movement and unawareness of any weather or traffic conditions while charting a route through traditional methods leads to late and untimely delivery delays which lead to an unhappy customer.

7. Poor Customer Experience

Customers expect to be kept informed about the status of their delivery at all times. Traditional routing methods are unable to predict the estimated time of delivery or the current location of the delivery to a customer, thus depriving the customer of information. If a delay occurs due to unavoidable circumstances, customers cannot be informed of the same. This lack of communication leads to a poor customer experience.

8. Challenges with Multi-Drop Delivery Route Planning

Executing different routes with multi-drop delivery, especially in the densely packed cities, is one of the main challenges for last-mile logistics and traditional methods of routing are unable to chart a cost-effective and time bound route for the same. Businesses inability to meet this challenge would adversely affect last-mile delivery. 

Can a free route planning solution help?

Route planning solution helps in finding the most cost-effective route, given a set of specific business parameters. This solution takes historical data and real-time constraints into account to provide optimal routes and schedules.

A free route planner can help but with anything that is free, there will be certain limitations to what the software is capable of. Most solutions do not allow planning route with unlimited stops. Few limitations in a free route planner are limited stops per optimization, one to four vehicle optimizations, unable to set delivery time windows and are less user-friendly. 

Is Google Maps a good tool for delivery route planning?

Google Maps is a free route planner and can be used for planning routes with 10 stops or less. 

The difference between online mapping and route planning software is that for online mapping you would require to manually determine the efficient order in which the multiple stops in the route need to be handled. This is because Google Maps finds the shortest path between two stops, but does not find the optimized path for a route with multiple stops. Google Maps do not facilitate optimizing routes with constraints like delivery time windows, vehicle load capacities or driver breaks.

What are the major advantages of route planning?

Route planning helps to figure out the shortest and most efficient route by collating from historical data, cost involved and the resources available. It allows businesses to reduce operating costs, save time and improve delivery productivity.

Major advantages:

1. Automated Route Planning

A route planner which takes into consideration historical data, the traffic and weather conditions to chart the shortest route between warehouse and the recipient’s place would help in saving time, as well as fuel costs.

2. Real-Time Tracking and Visibility

Real-time updates regarding the position and availability of fleet at any given point of time would help to have better control of the fleet and drivers. The option to contact the driver directly and ensure they do not take any unnecessary breaks on the way, guide them through any hindrances will help to maintain delivery timelines. It ensures timely fulfillment with actionable alerts and notifications. 

3. Intelligent Allocation and Dispatch

Route planner enables businesses to implement smart allocation of resources and by adopting automation, avoid mistakes. Deliveries across the route are planned in a logical order to ensure maximum work in minimal time. 

4. Reduces Carbon Emissions

Route planner provides the most efficient routes hence fuel usage is less. This limits carbon emissions and protects the environment. 

5. Pick up and Return

Businesses are able to interact with their delivery executives through mobile app thus enabling to manage and control job allocation, routing, sequence and also facilitate real-time communication with customers.

6. Electronic Proof of Delivery

Route planner equips delivery partners to collect electronic proof of delivery as an image, signature, or timestamp while also providing an easy way to collect feedback for your business.

7. Address Intelligence

Route planning software powered by machine learning algorithms (ML) has the ability to self-learn the ‘correct’ address just from delivery addresses, by analyzing the successes and failures of delivery to the same address in the past. A successful delivery to an address is saved into the system, which is used internally for the next delivery to optimize last mile connectivity making it faster and more accurate. By accurately mapping customer addresses businesses can shrink 28-32 percent of logistics costs by reducing miles per delivery.

8. Crowdsourcing Deliveries

Route planner enables businesses to outsource delivery tasks to third parties during peak business hours and holiday seasons thus allowing scaling of operations according to demand. 

Businesses need to change their approach to route planning if they want to keep up with the customer demands and increase customer satisfaction. 

Amazon is one of the few companies who have made their customers happy by their route planner which takes a customer centric approach. Amazon’s ability to provide flexible delivery time window and date of delivery, notifications of delivery on the way has allowed them to cater to customer expectations.

A leading petroleum company in the United States was facing challenges due to the high cost of fuel and the ever-growing need for reliable delivery services. With the aid of route planning solution, the company was able to reduce transportation costs and keep track of the progress of deliveries more conveniently.

How modern logistics tools can drastically improve delivery route planning?

Route optimizers are powerful logistics tools used for improving delivery route planning. Route Optimization is the method of using Artificial Intelligence technology to figure out the shortest and most efficient route. Route planner software provides optimized route planning through vehicle allocation, historical data interpretation, cost wise route optimization, minimize empty miles and many other features. 

Logistic tools allow route planners to manage a fleet, provide driving directions, add multi-drop delivery, improve productivity and increase compliance to service-level agreement (SLA). These tools have the capability to handle on-demand orders along with scheduled orders. This feature of rerouting on the go or dynamic routing is another feature that is increasingly preferred by businesses to cater to delivery changes initiated by a customer. It provides a single platform to track and manage entire operations in real-time. 

With increasing complexity in the routing requirements of businesses, it is important that a logistic solution operating in real-time should be chosen to chart optimized routes to improve delivery efficiency and reduce costs. FarEye is empowering 100s of businesses across the globe to build robust routing strategies, to know how you can achieve the same quickly sign up for a demo here.

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