December 2017 | How-To | Ten Tips

Optimizing Route Planning to Cut Costs

Tags: Transportation, Logistics, Supply Chain

With consumers expecting more delivery options and the return of rising fuel prices, supply chain managers are finding ways to run leaner. For instance, ensuring transportation operations are making the most efficient use of vehicles, fuel, and drivers is a high priority. William Salter, CEO and president of Paragon Software Systems, offers these route planning tips to help keep transportation costs in check.

1. Automate route planning. Routing and scheduling software can significantly cut costs by considering all the real-world constraints your distribution operation faces everyday.

2. Link routing software to live vehicle tracking. Linking routing software to live vehicle tracking enables you to compare planned routes against actual routes. This allows you to detect unplanned activities such as drivers taking detours or regular delays at customer sites. It also helps identify areas of slack in your planning setup that will improve productivity.

3. Model what-if scenarios. Modeling the consequences of changing vehicle sizes, drivers’ hours, delivery frequencies, and delivery locations helps you make decisions without having to invest time or money to see the results.

4. Evaluate route optimization settings. Delivery windows, new customers, and levels of congestion usually change over time. Fine-tuning your operation as it evolves is important to make sure you keep fuel and fleet costs to a minimum.

5. Time heavy deliveries. Vehicle weight can have a huge impact on fuel consumption levels. Since heavier loads consume more fuel, they should be dropped off first. If they can’t go first, collect heavy items last so you are only paying for transporting them back to your depot.

6. Implement fuel reduction improvement strategies. Enact fuel efficiency strategies such as eliminating empty miles and curbing driver speed.

7. Integrate backhauls into delivery schedules. Combining collections and deliveries in the same vehicle can improve efficiencies, asset utilization, and turnaround times. Reduce additional time and empty running miles by not having to needlessly return to the depot.

8. Use accurate product data to maximize truck efficiency. Maximize vehicle fill with up-to-date volumetric data. This allows for optimized routing and schedules while also taking constraints into account.

9. Identify plan deviations. With information collected from vehicle tracking devices, transport managers can identify and improve driver and vehicle utilization to keep transport operation costs down.

10. Benchmark and review progress. Ensure that your planners are collecting accurate operational data each day. You can use this data to benchmark the planning process, uncover areas for improvement, and detect trends.

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