What are the Invisible Benefits of Route Optimization Software?
July 02, 2020
The value of route optimization software may seem fairly obvious. You’re using computer-based algorithms to figure out the most efficient way of getting multiple deliveries to multiple destinations in the shortest time and distance possible, something the human brain struggles to do even at a small scale.
But many businesses are not aware of the far wider benefits offered by implementation of advanced routing software, ones that can spread across the entire organization.
For Small and Medium-sized Businesses, in particular, sophisticated route planning offers performance efficiencies and internal integration that look a lot like those enjoyed by much larger companies.
We call them “invisible” benefits because they’re not the most obvious ones when it comes to deciding to switch from manual routing or less advanced systems. But they become highly visible over time. Advanced route optimization software can be a real game-changer – disruptive and even transformative.
Routing software benefits: more than saving time and miles
The impact of immediate reductions of time on the road, miles driven and fuel consumed should never be undervalued. Cost reductions are typically 10-30 %, and ROI is usually 3-12 months.
But here are some of the broader benefits.
Improved on-time delivery. Generating detailed, accurate, achievable route plans means you are far more likely to hit even narrow time windows consistently and predictably. That hones your competitive edge. If your drivers miss a delivery appointment and are sent to the back of the line to wait, they risk failing to complete all later scheduled deliveries, driving costs up and customer satisfaction down.
Increased customer service levels. Customers are more demanding than ever when it comes to meeting tight delivery windows. With sophisticated route optimization software, you can confidently plan routes that hit those windows, offer customers more accurate ETAs, and proactively communicate with them about the progress and status of deliveries in progress.
Later order cut-off and picking times. Planning delivery routes manually, or with rudimentary tools, can take hours, meaning tomorrow’s deliveries need to be entered for scheduling long before the trucks leave your distribution center. With advanced route optimization software, route planning takes minutes. That means you can accept orders, and pick and pack them later than you’re used to.
Greater flexibility to respond to unexpected changes. Good route planning technology allows you to respond quickly to evolving situations. Many businesses are currently being forced to flex from wholesale to home delivery, or from store replenishment to ecommerce or omnichannel fulfillment. Spikes or dips in demand are becoming harder and harder to predict, and driver availability remains a problem. This technology allows you to adapt fast, over and over, because it always quickly arrives at the absolute most efficient way for you to use your available resources to serve customer demands and market conditions best.
Powerful business insights. Sales staff can cite on-time delivery performance in negotiations. Any prospective new business can be assessed with highly detailed and accurate cost-to-serve estimates. Accounts payable has more accurate information to compare with invoices. Marketing can realistically plan promotions or seasonal surges around actual delivery capabilities.
Greater ability to plan using modeling tools. Executives at every level can run what-if scenarios to determine the cost and service implications of different distribution and delivery strategies, such as:
- What if we relocated our warehouse to a more central spot?
- What if we used smaller, more economical trucks?
- What happens to delivery efficiency if we begin serving a large new customer whose stores are in a neighboring county?
Route optimization software helps you run any number of scenarios to determine hard costs and softer consequences such as time-to-market, before you’ve lifted a finger or spent a penny.
With all these invisible benefits of sophisticated route optimization, the transportation department can go from being regarded at boardroom level as “just a cost of doing business” to a sleek, agile engine of competitive advantage, even transformation.
Our team of industry experts can take basic transportation data from your company to diagnose how advanced route planning software can deliver benefits that range from lower costs to greater agility in responding to market changes. The software typically delivers overall transportation savings of 10-30 %. Contact us today to find out more.