Last mile delivery is known to be the most complex and costly part of the supply chain. In recent years, the growth of e-commerce and the increase in the number of retail outlets in urban centers have further contributed to this trend, multiplying the volumes of packages to be delivered. Moreover, the increase in delivery services makes consumers (and professionals) more demanding than ever and less willing to pay for delivery.
What is true for parcel delivery extends to other activities. Long delivery times or missed deliveries are no longer acceptable to customers, whether it is to receive a parcel, a delivery, a technician or a health professional.
These underlying trends make the last mile increasingly complex to manage for organizations that now need to be able to plan it very carefully.
Route optimization is the best solution! But…
By assigning the right resource to the right place at the right time, it allows you to better meet your commitments to your customers (especially in terms of time slots), to reduce your costs (fewer vehicles used, fewer kilometers traveled) and to decrease your environmental impact.
However, in practice, few companies are actually using such a solution. It is estimated that only 20% of the players who have this need rely on a route optimization software. Among those equipped, the majority does not use the solution at all or only in part, making a large number of manual adjustments and rescheduling.
Where does this paradox come from and what are the obstacles to using route optimization softwares?
Data quality is key
As with many technological tools for supply chain optimization, route optimization is essentially based on data. The addresses of the locations to be visited, the size and weight of the parcels, the time constraints of the delivery sites: the data defines the problem and the quality of the data determines the relevance of the solution that will be provided.
In some organizations, some information is known to the operational staff but does not exist in any database: this is sometimes the case for companies requiring technical intervention scheduling, incompatibilities between service providers and customers, or implicit agreements rooted in common habits.
As a result, many players who could optimize their routes do not do so because they do not have the capacity to provide the solution with sufficiently complete and reliable input data.
Logistics never stops and information is constantly added to the system. The idea of having to run a new optimization after each change (or to manage them manually) can put off potential users.
Logistics never stops and information is constantly added to the system. The idea of having to run a new optimization after each change (or to manage them manually) can put off potential users.
The latest smart geocoding solutions use technologies capable of working on unstructured data thanks to Deep Learning, significantly improving the quality of the results provided to route optimization solutions.
Taking into account specific constraints, details that change everything
Many activities have to meet very specific constraints. Here are 4 examples:
- furniture delivery requires 2 delivery men when the shipment exceeds a certain weight,
- some interventions require technicians to go to a PUDO (Pick-Up Drop Off) center to pick up equipment,
- the time spent by a technician on a customer’s premises can vary by a factor of four depending on the technical complexity of the intervention,
- in bulk shipping, some collection locations can only accommodate one vehicle at a time
If these constraints are not taken into account when planning the routes, the solutions provided will be neither adapted nor realistic, thereby requiring the user to make a large number of manual adjustments to the resulting schedule, further complicating the use of the software.
The ability to handle very specific constraints must therefore be a fundamental criterion when choosing a route optimization software.
Real time increases the gap between theory and practice
Traffic jams, absent customers, wrong address, parking issues: the last mile is full of obstacles. While most route optimization software solutions are static (route calculation and cut-off), the last mile is very dynamic and requires utmost proactivity!
How can you ensure that a traffic jam at the beginning of the day does not impact a tight time slot planned later on? How to rebalance the technicians’ rounds in real time if the schedule of one of them has become lighter?
The significant differences that companies observe between the performance of planned rounds and those actually carried out lead to disappointment towards route optimization tools. In the context of urban logistics it is becoming less and less relevant to calculate static routes.
To overcome unexpected events, the route optimization solution must be able to adapt instantly to changes as they occur in order to provide operational staff with the best possible routes, no matter what is happening in the field.
Restructuring your organization requires change management
The implementation of a route optimization solution at the heart of the organization’s operational system is a strategic project for the company. The stakes are high and the implementation often involves changes, both from an organizational and technical point of view, which may be met with reluctance within the operational teams.
This is especially the case if the solution adds constraints instead of removing them, or if it does not match the reality of the field (due to a lack of flexibility or a poor definition of the need at the beginning).
The right approach is to identify and involve all stakeholders from the start of the project. Facility managers, planners, field teams, all have business knowledge that has a strong added value during the development of the solution with the software publisher.
The implementation of a route optimization solution is a large-scale project that will bring real change and require a significant investment within the company. It is therefore essential to be prepared, with sufficient knowledge of the data and the will to lead this change with the teams. Nevertheless, these projects are also new and it is important to be supported by a software publisher who is also an expert in logistic issues, who will be able to anticipate and solve the technical and organizational problems that will inevitably arise, and who offers the latest technology, in line with the real-time needs of the market.
Continuous route optimization solution
Through its technologies and methods, Kardinal supports its customers in the implementation of relevant and realistic route optimization solutions, in line with the needs of operational staff. To learn more, please contact us. We will be happy to discuss your project with you.