Route Planning in Logistics: The Ultimate Guide

  What is route planning in logistics?

Route planning for logistics defines finalizing the delivery sequence of the orders and the passages associated with them. It is often done through financially computing the most viable transportation path that involves minimal disruptions. From a mathematical point of view, stakeholders have to ensure that maximum number of deliveries are made in minimum timeline possible. Such roadmap also comprehends the load capacity, vehicle maintenance, and tolls, among other factors, to finalize the best way ahead.

Gone are the days when maps were a staple in every logistic office to pinpoint the routing that commenced from the stages of planning to execution. But archaic methods went obsolete owing to the fast-paced world we live in. This is where logistics route software virtues stand to benefit organizations from start to finish.

1. Resource Allocation: Owners can allocate the best resources to complete a delivery consignment by knowing the nearest asset available to ensure streamlined logistics operation in the least amount of time. With software fueled by AI and ML, companies get complete visibility with real-time communication, enabling better collaboration.
2. Sustainable Operations: Smart route optimization equals opting for the best navigation possible. This results in reduced fuel consumption and better adherence to ESG goals from an organization's point of view.
3. Less Human Effort: When it comes to documentation of each transaction to ideating a delivery plan by selecting a time window based on location warrants a lot of clock hours. Implementing an AI route planning software nullifies all the repetitive tasks to make sure that task masters focus on more strategic matters at hand. Not to mention, it saves time, money, and effort.
4. Data-based Planning: Logistics route planning software makes the most of the information feed to it. Based on the machine learning algorithms at its disposal, the transport management application makes much-needed improvements to the process via insights backed by stats such as timeline metrics, driver performance, location-based facts, customer feedback, etc.
5. Reduced Cost: Faster, astute planning coupled with end-to-end streamlined operations, complete utilization of vehicle capacity, and minimum fuel consumption contribute to a positive balance sheet.
6. Driver Performance: Another added advantage is that SCM also gets insights into drivers' behavioral and performance metrics. From their adherence to regulations to their vehicle handling, small factors compound to maximum effect and can help save a lot of time and effort.

Based on the nature of shipments and demography, a company can choose from many types of route planning that are best for them.

1. Multi-Stop Route Planning: It’s a scenario where the drivers themselves have to cover multiple stops and have to ensure the delivery of the product.
2. Dynamic Route Planning: As the name suggests, dynamic route planning accommodates last-minute changes in delivery patterns and allows drivers to opt for navigation that suits their other deliveries with effort and schedule in a complete context. This automated route, which refreshes itself, is easily available on the drivers' end through mobile support, making it feasible in terms of visibility and execution of updated plans.
3. Open Path Routing: In cases that are few and far between, the driver is allowed to cover the maximum number of stops in the minimum time possible, based on the suggestion received. The final call remains with the driver.
4. Closed Path Routing: In this situation, the drivers plan their deliveries to ensure that the last consignment is close to the distribution center from where they started.
5. Reverse Open Path Routing: Here, the driver starts making the first delivery to the furthest stop from the distribution center. The route has the last consignment near the depot.
6. Depot-to-Depot Route Planning: An outline where driver sticks to a route that covers depot to depot.

While we make a case for modern logistics software, on one hand, it is imperative to know what led to the wholesome change. Traditional route planning software made it difficult to keep up with customers' rising demands, especially in the age of instant gratification. Not to mention, retaining and acquiring new users is becoming as challenging as ever.

• Manual Route Planning: Manual route planning requires a tremendous amount of effort. From finalizing the time frame to calculating the best passage, the timeline invested compared to the actual work done doesn’t work in favor of a company’s growth.
• Lack of Visibility: With no touch with the real-time status and transit current state, archaic method operations find themselves in limbo, especially when an unwarranted disruption arises. With no coordination possible, the company has to settle finger-crossed, hoping for the best outcome. This is especially true in today’s online marketplace experience where customers like to keep a tab on their transit live pin.
• Fuel Consumption: Improper route planning directly translates to unwarranted fuel consumption, leading to extra costs incurred.
• Delayed Delivery: With lack of adaptability, consignment with traditional practices generally see delayed deliveries with inaccurate ETAs, leading to subpar user experience. This directly impact a business future with user not opting to continue in many cases.
• Increased Cost: All the factors above combine to result in increased costs on the enterprises account. From improper resource allocation to wrong route planning to losing customer owing to bad transit experience, collectively undo a company’s constructive effort.

Often many decisions are driven by the financial viability of an execution. While it still remains a major call, other metrics too have an equal say in the market standing of an organization.

• Negative Balance Sheet: If your operations are inefficient, chances are that sooner or later, your balance sheet will be reflective of the fact. This is more true on the cost brunt by the organizations processing the return orders. With returns being free of charge and convenient to users own time window, the reverse logistics directly impacts profit margins while increasing operational cost.
• Delayed Deliveries: If the core functions are under par, then your customer experience and your company’s standing in the market receives a negative impact.
• Drivers Hurdles: As the stakeholders with ownership of delivering the consignment on time, drivers sometimes face hurdles. Due to the lack of visibility, it becomes difficult to resolve the issue in collaboration with the management, resulting in human effort that warrants time and loss of finance.
• Resource Optimization: For companies with small-scale operations, resource availability always remains a necessity. In such a limited framework, the timeline remains of the utmost essence, with astute resource usage driving a company’s success. In such cases, deploying smart asset management remains a key to an enterprise's success.

When an organization has the added advantage of logistics route planning software, it spins out the drawback of traditional execution methods and infuses it with intelligent edge driven by data analytics and machine learning, resulting in cost savings, efficient planning adherence, increased user experience and better management of the fleet. Giving more transparency on offer, especially with the last-mile delivery and reverse logistics, automated route planning software drives analytics and reporting for more streamlined returns.