Route design software: how does it generate value for your business?

Route design and distribution software has capabilities that can go far beyond "plan today for tomorrow's deliveries" functionality. Let's look at just a few strategies that can pave the way for dramatic cost savings and customer service improvements.

Integrate routing software with a telematics system.

Integrating logistics distribution software with a telematics system to compare planned activity with what's happening live on the road allows you to automatically identify discrepancies between planned and actual performance and adjust accordingly.

Benefits include:
  • Improved customer communication. Live ETA updates and "arriving" alerts allow you to update customers on scheduled deliveries.
  • Continuously improving routes. When live GPS data is fed into route design and logistics distribution software, exceptions to the plan are flagged to help identify problems, such as regular delays in a particular customer delivery or regular traffic jams at specific times and in specific areas. With that information, you can update the data to make future plans more accurate.
2. Model what-if scenarios

Modeling what-if scenarios to determine the value of strategic changes prior to implementation in route optimization software allows you to explore any number of changes using real data to assess the precise implications of the change on cost and services.

Often, fleet operators do not explore strategic issues because they lack the time and resources to perform the analysis manually. But - if you decide to invest in route design and logistics distribution software - it will allow you to run hypothetical modeling exercises to explore strategies that can generate significant cost savings.

3. Evaluate the profitability of a new customer

Sometimes, in an effort to close a deal, overzealous salespeople can make expensive promises to new customers before understanding the real cost of serving that customer. What do we mean by this?

It's a difficult analysis to perform without purpose-built logistics software. That's because no Excel spreadsheet can cope with the complexity involved.Where exactly are the new delivery points? When are they open to take delivery? What is the normal order size and how will it vary? How do these deliveries fit in with other existing deliveries? Logistics design and distribution software models these and other factors to develop the best routing plan for new locations and measures the impact of changes on margin.

What is the ROI of route design and optimization software?

In our experience, the ROI is realized in one year and can take up to three months. The actual cost of route design and optimization software can range from simple installations to hundreds of thousands for very large fleets with sophisticated routing requirements.

The ROI calculation will depend on whether it is an installed software with an upfront cost or a software-as-a-service (SaaS) solution with an ongoing monthly payment. Some savings are clear and measurable for an ROI calculation. Others, not so much. If you complete routes in less time and fewer miles, you can, over time, reduce fleet size and driver force, while reducing fuel and fleet maintenance costs.

The value of route optimization software

In today's economy, route optimization and design is a highly underrated strategy for business success. From a customer service perspective, expectations for more frequent and accurate deliveries have never been higher. It has become very difficult for companies to differentiate on product and price, but delivery excellence is a highly valued and achievable competitive lever.

From a cost perspective, private fleets represent a large percentage of total operating expenses and a huge loss of profit if not managed well. For companies that continue to rely on manual methods to plan delivery routes, there has never been a more opportune time to automate the route design process.

But for the effort, you need a partner - like Drivin - to help you with route and process optimization and planning in your business logistics. Hopefully, this comprehensive look at route optimization can help you achieve your business goals. Want to take the first step towards meeting your goals? Contact us to help you!