Route Planning Helps Smaller Players Punch Above Their Weight

William Salter
CEO, Paragon Software Systems
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Route Planning Helps Smaller Players Punch Above Their Weight Software
A smarter, more automated approach to delivery operations, aided by cutting-edge route-planning technology, is now a competitive requirement for smaller companies

Whether you’re a grocery retail chain handling your own store replenishment or a wholesale food distributor, you’re under increasing pressure to perform with greater agility and speed when it comes to delivery operations. Trends such as consumer demand for fresh-not-frozen food, proliferating SKUs and a shift to consumers doing smaller, more regular grocery shops, have spawned a new set of distribution requirements: more frequent deliveries, unforgiving ETA precision and unprecedented efficiency. 

For anyone in the food distribution business today, it’s no longer just about the food, it’s about how you get the food to market.

New distribution challenges have introduced a level of operational complexity that’s difficult to manage without the aid of sophisticated route-planning technology. While large distributors and grocery chains have invested in such solutions, many smaller businesses haven’t, continuing to rely on the most basic tools to manage one of their largest cost centers. That’s a mistake. A smarter, more automated approach to delivery operations, aided by cutting-edge technology, is no longer a nice-to-have. It’s a competitive requirement.

The good news is that these businesses can benefit from the same sophisticated capabilities as their giant competitors, cutting the fat from delivery operations and improving customer service levels.

Advanced route-planning software not only drives day-to-day improvements that can cut 10% to 30% off fleet operating costs right off the bat, it also helps answer “what if” questions that allow you to explore strategic changes that can transform the efficiency and effectiveness of your delivery operation.

Efficiency Achieved With Existing Equipment

Advanced route-planning software can be implemented quickly to create more efficient routes that, over time, let you expand the business without expanding your fleet and driver force. This profit-driving benefit can be achieved with a relatively modest investment, with a return on investment in less than six months.

Businesses of almost any size can usefully harness these capabilities. For example, Marigolds & Onions, a Toronto-based catering company, has only 10 vans in its fleet, but by implementing route-planning software, the business reduced fuel usage by 7% to 9%, and cut delivery labor by 20%, saving $22,000-$24,000 per month overall.

Medium-sized meat distributor Colorado Boxed Beef Co. (CBBC), with 20 tractors and 25 drivers, experienced dramatic improvements to its delivery operations, including improved customer service, when it switched from a rudimentary route-planning tool to route optimization software.

Previously, CBBC routed individual orders exactly the same way each time, leaving no flexibility to cope with fluctuations in order volumes. Now, sophisticated algorithms ensure that CBBC’s routes use available resources in the most efficient way. Squeezing more out of its existing assets allowed the company to expand its customer base and geographical reach using existing vehicles and drivers.

Promoting Delivery Satisfaction All Around

Whether you’re delivering ice cream to your own stores, or freshly baked bread to a chain of supermarkets, it’s likely that the recipients expect more than just an a.m. or p.m. delivery slot. Perhaps they want deliveries after 11 a.m. so that staffers have time to complete other tasks before the delivery arrives, or before 8 a.m. to prevent disruption to front-of-house service in the store.

Advanced route-planning software allows you to offer tighter time windows, but it also allows you to enter the relevant delivery restrictions against each delivery destination – once. The algorithms will then take care of meeting each recipient’s request, so you don’t have to worry.

With advanced route planning, you can communicate accurate ETAs via SMS or email while the driver is en route, letting delivery recipients know exactly when the truck will arrive. To optimize future routing, the software flags deviations from the plan, such as habitual unloading delays at a specific location, and adjusts plans accordingly. Over time, plan accuracy and efficiency steadily increase, as does customer confidence in your ability to hit stated ETAs.

Routing Software Fuels Strategic Decisions

Advanced route-planning software is more than just a tool for day-to-day routing and scheduling; it can drive major business decisions with six- and seven-figure savings potential. Using actual data from the operation, distributors of all sizes can run analyses that let them see the exact cost and service implications of any number of strategic changes, like relocating or adding a warehouse, using smaller vehicles or expanding into new regions.

U.K. baked goods distributor and retailer Greggs used advanced route-planning software to examine its entire distribution network. The company determined that it would greatly improve delivery efficiency if it consolidated the operation of two regional distribution centers into a single one in a different location, improving fleet utilization by more than 30% and removing almost 900 miles per week from its route plans. The software allowed it to examine the costs and implications before it made expensive and potentially nonbeneficial changes.

Big or Small, Efficiency is King

To survive and thrive in the margin-thin grocery and food distribution industry, your delivery operations need to operate at peak efficiency all the time. Whatever the size of your business, you simply can’t afford to achieve less than that. Routing software drives value far beyond reducing miles and time, helping you to overall achieve distribution excellence on par with even your largest competitors.

About the Author

William Salter is CEO of Paragon Software Systems, a provider of advanced route planning software based in Dalla Read More

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