Manual Route Planning Can Be a Barrier to Growth
Category: Routing and Scheduling
Manual route planning can be a significant drag on a company’s performance and competitiveness. It can drain profits out of an otherwise healthy business. Worst of all, it can stand in the way of growth.
Every day fleet managers face the challenge of responding to increasing customer demands for short lead times and convenient delivery slots. Meanwhile, companies everywhere are under pressure from aggressive competition, making it harder than ever to keep the balance between cost-efficient delivery and competitive service levels. In these circumstances, it can be hard enough to keep existing customers happy, let alone grow.
There is an urgent need for improvement in delivery performance -- speed, accuracy and predictability – but also cost and efficiency. Planning all your routes manually, and communicating with each customer individually is near impossible, it is certainly inefficient, and it is likely to set you at a disadvantage against the competition.
And yet a huge number of companies are still depending on manual route planning or, rudimentary planning tools, to manage this critical part of their business. In a typical scenario, a planner -- or team of planners -- plots out the next day’s deliveries using either an Excel spreadsheet or software that is simply not designed for today’s routing and scheduling complexity. Often he or she then assigns those routes based on the drivers’ preferences, or which drivers are the most vocal about their preferences! The result is that expensive inefficiencies creep into the process.
A Drag on Performance
These inefficiencies occur because a human brain is not capable of juggling all the myriad factors involved in a scenario where multiple trucks are making multi-stop delivery runs. And emotion is allowed to creep in. As a consequence, trucks crisscross each other needlessly in transit, fail to take account of factors such as habitual delays at one delivery point that put the rest of the delivery schedule out of whack, and generally do not perform deliveries in the most efficient manner possible.
Your delivery performance suffers when you have a limited number of assets (trucks and drivers) out on the road following a less-than-ideal plan. With manual route planning, the danger of missed or late deliveries greatly increases, which leads to poor performance reports which could impact customer relationships.
Missing out on Competitive Advantage
Take the example of a wholesale grocer delivering to food retailers. As the Amazon-fueled demand grows for deliveries made faster, within tighter time-windows and real-time progress reports available to the end-customer, the ability to deliver on-time and with accurate and frequent communications has become a clear competitive advantage.
The implications extend far beyond the delivery department. Say you’re a catering company delivering hot food to a corporate event, or a drug-delivery service getting time-sensitive pharmaceuticals to patients at home. In these cases, it’s absolutely essential that you deliver what you promised, when you promised, or you will most likely lose the business. Your customer service staff should be able to answer the questions -- Have we delivered what we said we would, and are we within the agreed time windows?
A supplier of baked goods, to take another example, will benefit hugely from being able to show, during client review meetings or potential sales pitches, detailed statistics about percentage of on-time deliveries and other KPIs that demonstrate its ability to make fresh product available for consumers to enjoy. And yet, with manual route planning, those figures are very hard, if not impossible to come by. Demonstrating clearly that you are capable of delivering in full and on-time delivers a significant competitive advantage; failing to do so can make you look like a laggard.
Profits Disappear, Threatening Growth
More business is good… but it also brings greater complexity. If you have an inefficient, manual route planning process, it’s easy to find that your response to added volume is to throw more trucks and drivers at the problem than you need to. This can mean costs escalate out of proportion to the extra income, draining away whatever profits you hoped to gain from new business very quickly.
Expansion without highly efficient route planning also often negatively impacts the amount of control you have over your delivery operations. If there’s already an inherent sense of chaos in the dispatch department, more volume will only make it worse.
Another disadvantage to non-sophisticated route planning is that it’s impossible to accurately predict what will be the cost of bringing a new piece of business on board. You need to be able to get a clear answer to the question: “How much would it cost if we agree to deliver to an existing customer four times a week instead of two?” Or: “How much would it cost to take on this piece of new business?”
Your planner or planners are already stretched just figuring out the daily delivery route schedules, let alone imagining how added routes and destinations will factor in.
If you operate without route planning software, information on delivery cost-per-drop and other cost-to-serve type data is either vague or non-existent. Not all new business is good business.
Automated Route Planning Offers a Way Forward
There are so many variables that go into transportation planning -- customer locations and delivery quantities, delivery time windows and dock restrictions, truck availability and maintenance schedules, traffic congestion, driver shift times and layover requirements, truck size and height restrictions, to name just a few. With high gas prices, customer service requirements, driver shortages, and hours of service (HoS) regulations, the need for automated, fully optimized routing and scheduling is even greater than ever.
Further, implementing route execution software, which compares planned routes with actual ones, makes available a wealth of information that allows you to craft the best, optimized route plans (and much more than that) into the future.
Taking account of hundreds of variables in order to deliver an optimized plan can challenge even the most experienced of transportation planners. In reality, a far more efficient result comes from using a powerful optimization engine to create the best routes and schedules.
If you are spending too much time and resources trying to make the most of your available transportation fleet while meeting customer delivery demands in a cost-effective way, you are ill-prepared for growth. Time for a rethink?