3 reasons why improving routing efficiency increases your company’s productivity

optimizar las rutas

In recent times, the increase in online commerce and home deliveries has experienced unprecedented growth. Given this reality, route optimization becomes a fundamental strategy. Here are three reasons why improving your routes will increase your company’s productivity.

We have previously discussed the challenges that the pandemic has imposed on the logistics field. Our allies at Descartes have argued that since 2020 there has been a “fundamental shift to a dynamic route model.” For this reason, they suggest the adoption of dynamic route planning to meet changing demand and provide flexibility in the face of future uncertainties. Regardless of the type of routing your company uses, route optimization is essential if you want to increase productivity. Read on to find out why.

Why does improving route efficiency increase your company's productivity?

In the logistics field, technology becomes a valuable ally to obtain quality results. Manual planning is counterproductive to your strategy, as it can lead to delays in deliveries and hinder the process due to its lack of precision.

It is crucial to improve your company’s routes and to have specialized software that understands the particularities of your business in terms of logistics and marketing. These needs will determine the level of importance and complexity of the software required. This is because, in situations of volatile demand or multiple deliveries per truck, for example, the use of software becomes even more relevant.

This brings us to our first point about how improved routing increases your company’s productivity.

1. Improve delivery times and increase the ability to accurately manage orders.

Having a planning software will bring multiple benefits to your company. Thanks to accurate data management, information becomes more complete, transparent and accessible to all stakeholders. In addition, real-time editing is possible, which has become almost a necessity in today’s business world.

Improving delivery times by choosing the best route or bypassing obstacles along the way to achieve successful deliveries will increase the ability to manage orders more accurately. The more efficient the delivery times, the more orders can be handled on the same route.

2. Allows to adopt a more efficient cost strategy

In addition to improving delivery times, your company’s route planning increases productivity while optimizing cost management. This is because, thanks to the accuracy of the data provided by routing software, it is possible to save on fuel and reduce fleet mileage.

In detail, an efficient route planning strategy helps to:

  • Reduce transportation costs, such as fuel, maintenance and even tolls.
  • Increase your company’s profitability by saving on logistics costs and improving customer satisfaction.
  • Re-planning a route in real time based on unforeseen events, such as accidents, traffic congestion or the unavailability of a customer to receive the goods, helps to reduce delivery times. This translates into fewer kilometers traveled, lower fuel consumption and, therefore, lower costs.

3. Improve the logistics of the last stage of the process.

We have already emphasized the importance of efficient management at the last stage of the logistics chain, known as the “last mile”, since your company’s reputation depends on the customer experience at this stage.

In recent years, the last mile has taken on a crucial role in logistics. It is also the most costly leg of the product journey, so it is essential to focus efforts on efficient management. Not surprisingly, last mile optimization is among the logistics trends for 2023.

A company’s focus in the last mile is on improving customer satisfaction. Thanks to route optimization software, we can ensure compliance with time windows, arrive on time, reduce product returns, among other aspects.

Route replanning: the challenge of meeting demand in a cost-effective manner

Descartes highlights in his e-book “Critical Moment: Rethinking Route Optimization” that route replanning represents a challenge, especially for retailers due to the traditional static route model. To address this situation, they recommend adopting a hybrid approach combining static and dynamic routing. They suggest serving core customers through static routes, while lower volume customers are served through dynamic routes.

We share the opinion of the importance of having technology and tools that facilitate the task of route planning, since without them, this task is practically impossible to perform with precision and efficiency.

Improving route efficiency increases your company’s productivity as long as you have state-of-the-art technology. Descartes stresses that any route planning and optimization software must have the following capabilities:

  • Strategic routing modeling: strategic routing is an excellent way to redefine distribution operations. State-of-the-art software condenses the multiple steps of the traditional method into a few steps to quickly suggest the best strategy.
  • Hybrid route planning: efficient software should allow route optimization for different customers. This involves planning orders from their creation and distributing them on dynamic routes with scheduled deliveries to key customers. This greatly facilitates the work of planners by allowing them to focus on exceptions while designing routes.

Does route optimization increase my company's productivity? Yes, and it also keeps it competitive.

Rapid changes in the supply chain and in customer demands are a reality that every company must learn to deal with if it wants to stay current. Over the past two years, we have been forced to be prepared for the speed at which customer expectations have evolved.

In terms of logistics, it is not only necessary to meet the demand for products and services, but also to ensure that they are delivered in optimal conditions. For this reason, route optimization becomes essential to increase your company’s productivity and is the strategy you should implement.

How do you determine what adjustments your company needs in relation to route planning? You can start by assessing your responsiveness to changes in order volume and delivery preferences of your customers. The key lies in the flexibility to stay in the game.

SKU Logistics is ready to provide you with efficient route planning solutions through a wide variety of software. We can help you on your way to route optimization. Do not hesitate to contact us for more information.

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