Route Optimization: Translating labour into results.
Imagine a day in the life of a product or service delivery vehicle. How much do you think one motorbike, truck or car travels in day?
In the case of last-mile mile delivery agents, a large number of deliveries are made over a radius of about 30-40 kms. The last delivery man I spoke to – one for a popular food-delivery service – used to make almost 100 deliveries in a day, in a radius of 25-30 kms.! In the case of bulk deliveries, the parameters are interchanged. The number of deliveries per day are few, but over a huge spatial range – anywhere from 100s to 1000s of kilometers.
In either case, let us consider that the delivery vehicle gallops through at least 200 – 300 kilometers on average (The figure is probably much higher considering the incentives delivery-persons get on each delivery). So, in a day, a short-range delivery vehicle can do up to 300 kms. of traveling, while a long-range vehicle probably does at least 500-600 kms.
While your vehicles tirelessly burn rubber and fuel, and assist you like loyal companions through the day, their efforts don’t bear fruit without a little bit of reciprocation from that nifty business mind of yours…
You see, the labour of your vehicle doesn’t automatically translate into results. In other words, more distance travelled in a day doesn’t necessarily mean more deliveries. The gross figure of how much distance was travelled in a day, says more about how much the delivery person and the delivery vehicle slogged, than how many successful deliveries were made. If your focus is on efficiency and optimization, rather than blindly charging forth into huge volumes, your goal is to ensure the least possible amount of slogging for your delivery persons and vehicles, while making the maximum possible deliveries. Misunderstanding and flipping this equation of efficiency (which is frankly high-school stuff really) is often the reason why many businesses are just not able to turn big profits.
Optimizing deliveries is a much smarter way to maximize deliveries than overworking delivery vehicles and agents. The question arises then, how does one do that exactly? What is it that must be optimized? The answer is simple enough. To optimize deliveries, you just have to take care of those involved at the front-end of your business, especially in the last-mile. That means making the lives of delivery agents and delivery vehicles easier by providing them with a foundation of efficient planning. For the agent, what matters most is time and for the vehicle, the same can be said about fuel. Both time and fuel are precious commodities and saving them translates into minimized costs for the whole business and maximized efficiency.
Optimizing Routes with Tookan:
Minimizing time and fuel costs is what makes high-distance work days valuable. The simplest (and the most complex) way of minimizing time and fuel is Route Optimization. It is the simplest because it doesn’t take a genius economist to figure out that making the most efficient use of fuel and time makes for a profitable business and a happy fleet of employees (and vehicles). At the same time, it is the most complex because optimizing routes can be an extremely complex cognitive task! It is more complex than simply finding the shortest path between two points. Many other factors have to be considered:
- Number of turns or intersections on the route
- Availability of the nearest delivery agents
- Traffic conditions (which are always changing)
- Location Proximity
- Delivery Windows
- Traffic Conditions
- Local Regulations
- Minimum and maximum order load
- Weight capacity
The number of possible routes with just one route and 10 deliveries can go up to 3,628,800 (Source:Telogis)! Finding the best possible one for your vehicle can be quite complex arithmetically. That is why software with algorithms to compute all this stuff are used for this job.
Furthermore, making your delivery agent’s life easier means providing him/her with the most optimized route, making his delivery process as convenient as possible with all the required information and planning and assigning their pick-up and drop-off points considering their positions, availability and frequented routes, which they are more likely to be familiar with.
Having looked into Route Optimization, here are some of the common challenges and ways to overcome them:
Proximate Centers: The common practice these days is to have huge, central warehouses as distribution centers for delivery. However, that leads to gross inefficiencies in the delivery process. The smarter thing to do is increasing the number and the spatial spread of distribution centers. By focussing on areas of highest concentration, both delivery and return times are reduced and the costs of fuel are minimized.
Real-Time Tracking: The ‘Bird’s Eye View’ – a map-based interface to track your delivery agents and your delivery locations – is essential to optimize routes. It is the equivalent of sitting atop the clouds, and playing God in the process of planning. The quintessential on-demand experience is created by incorporating latest technologies for optimization.
Route Optimization Software: An algorithm to compute all the variables involved in optimizing routes is imperative. Without it, keeping a track of all the factors and doing the math is simply too impractical. The leaders of the on-demand industry got there by taking advantage of this technology. If you have a fleet of delivery agents and vehicles, without technological support, managing them is impossible.
Apps for Delivery-Agents: In addition to technological support for management and operations, an interface for your agents means that you can communicate all the necessary information required for a delivery, the details of the customer, a map-based display of possible routes, solutions to accept digital payments and all this, with the click of a button.
DRONES! I understand that this is perhaps more a possibility for the near future than the reality of today’s businesses. Regardless, drones are quickly becoming a reality – the most exciting one in the logistics industry! They are already at work in many places and may soon become the ultimate solution to bypassing the logistical challenges related to vehicular transportation!
These are a few of the ways in which route optimization can make the lives of delivery vehicles and agents much easier. In the process, it makes your life easier too! Route Optimization is all about time and fuel (at least, as of now). The way to use that nifty business mind is to efficiently balance their costs. Tookan is a technological solution designed to do exactly this, and much more!