Businesses are always in the process of reducing costs. Wouldn’t it be great if you could just twist a dial and see savings?
Over the past few weeks, I have read a few articles on how costs are reduced by eliminating unnecessary staff, reducing inventory levels, and generally tightening up business processes. And all these point in the same direction; that is, lower costs improve profits, or in this time of the pandemic, at least reduce losses.
Last mile product delivery is one place where costs can be reduced. Any business that does not use some type of route optimization or dynamic routing is leaving money on the table.
For any small number of stops on a single vehicle, it is easy to put them into some reasonably cost-effective order. If you have some larger number of stops and group them by vehicle, the problem is reduced to ordering the stops on each vehicle.
But manually grouping stops by vehicle misses the greatest opportunity for savings. Part of the overall saving is putting stops in the lowest cost order on each vehicle, but the big savings come from deciding which vehicle to use.
I have seen routes being built where the planner would sort delivery tickets by ZIP code and then select a few adjacent ZIP codes and manually build a route. While this is a very simple process, many opportunities for saving are missed.
Growing up, I lived near the edge of an urban ZIP code. Using the ZIP code technique, a stop a block away could go on a different route, but worse, most of the nearby ZIP code was not really nearby. A very large railroad yard divided 60636 into two very unequal parts with limited passages between those two parts.
Take a look at the aerial photo below. Would you really want to include houses in the circled area with stops in the rest of the 60636 ZIP code? Or should those stops be included with the 60629 stops?
An automated process has no biases. It does not care about town names or ZIP code boundaries. It only considers the actual time and distance between stops.
After showing optimized route to load planners in the past, I sometimes got the response “I wouldn’t do it that way”. And that is exactly the point. The route optimization process won’t do it the same way as a human. Depending on the number of stops being assigned, can save 10 to 30% in actual transportation costs. And fewer miles means less time behind the wheel which can save further by reducing overtime costs.
There are some usual reasons for not implementing route optimization. I have heard that it is too hard to implement or it will change a business process that appears to be working. So let me show you a short video on how a daily work process may be implemented.
Click to see Route Optimization Using The Daily Process
If you can place the work to be done in almost any type of file, you can then create a place to hold the work for a day, upload the work, and optimize routes in just a few clicks. You can the review the routes, make changes, if necessary, and print in only a few more clicks.
In fact, you will have a cost-effective solution in less time than it takes to sort the delivery tickets on a desk or table.
We can do a demo using your data or can offer a free trial so you can see for yourself how much you can save with route optimization from Strategic Movements.
Whether you are just curious, thinking about a solution, or are ready to implement a process that will reduce transportation costs every day, you can sign up for our blog and see what Strategic Movements can do you do.