How much do you know about the routes your drivers are taking to get to jobs or make deliveries? Does it matter? More importantly, how much could you save by planning routes more carefully?
The routes your drivers take can make a big difference, and the bigger the fleet the bigger the difference. Even if you optimized your routes by only 1% (an independent report suggested a 10% reduction in total miles**) and you run a fleet of 100 vehicles (driving an average of 40,000 miles per year) that equates to a saving of 40,000 miles per year.
At an average cost of $1.59 per mile* that equals a savings of $63,600. If you achieved the mileage savings indicated by the Frost & Sullivan report** then that savings becomes $636,000.
But the numbers can get even better when you consider how our RouteCloud technology can find even more efficient routes for your drivers.
And we’re not just talking about reducing miles, were talking about taking better routes – routes that keep your drivers out of trouble and your customers happy.
*Source: An Analysis of the Operational Costs of Trucking: 2016 Update
**Source: Benefits After Effective Deployment of Fleet Management System – Frost & Sullivan 2015
Why your drivers are taking the wrong routes
First of all, don’t blame your drivers. When you’re in the thick of it, stuck in traffic with a hundred jobs to get through, you just don’t have the bird’s eye view to see the best routes to take or the best order to do your jobs in. You simply do what you have to do to get through the day.
Think of it like someone stuck in the middle of the jungle, armed with only a machete and a vague sense of where to go, maybe they’ll just hack their way towards the sound of water, thinking a river will lead them back home. They may not realize if they’d gone the other way instead they would have stumbled across a main road leading back to town.
That’s the advantage big picture views offer. You can see stuff you can’t when you’re right in the middle of the action. So even if your drivers think they know the roads well and they’ve been driving them for years, they will still have blind spots on ways it could be done better.
That’s where route planning comes in – it’s a high level management tool that can give you that 50,000-foot view of all your routes – and what potential for improving those routes exists.
Why is route planning – or more specifically route optimization – so critical for mobile workforces today?
Why is route optimization vital for growing fleets?
You may already be doing some route planning, and looking at ways to optimize those routes, but is there more that could be done? And why is it so important to automate this process as much as possible?
First of all, you need to remember the inherent complexity of creating routes, with multiple vehicles and stops. The number of possibilities grows exponentially, even with relatively small fleets.
With just one vehicle and 10 stops, the number of possibilities is 3,628,800. But if you have a fleet of five vehicles that number jumps to a whopping 37,267,043,023,296,000.
Obviously, as your fleet grows along with the number of customers you service, the complexity can become overwhelming. This means manual or legacy route planning systems start to miss a lot of opportunities for recognizing better routes for your drivers.
For larger fleets, the cost of running unoptimized routes can seriously impact on the overall profitability of your entire operation, making it that much harder to compete against leaner businesses.
The good news is that, for larger fleets, making just small improvements can lead to route savings that can cover the cost of your route optimization software.
With our RouteCloud optimization software, better routes can be found a lot quicker, with better job sequencing and delivering more accurate routes, routes that don’t require a lot of the ‘real-world’ adjustments that legacy route planning solutions do.
“Our typical routing time has gone from 1 hour down to 15 to 20 minutes. The new optimizer speed could possibly give one man the ability to daily route our whole company (from 2 men).”
Vice President, Pepsi Hickory. Read the full case study.
These optimized routes can be set to comply automatically with any number of custom business rules including:
- Service/delivery time windows
- Driver preferences (including contract drivers)
- HOS driving hour limitations
- Driver attributes
- Yard/depot locations
- Customer/delivery sites
But RouteCloud does more than just offer you an effective way to meet your current constraints – it suggests ways you could save even more by adjusting how you run your business.
So, while some limitations may be non-negotiable (such as hours of service constraints), other requirements (such as when a delivery is made or by whom) could be more flexible.
Businesses that have been prepared to change have reaped significant rewards and become far more competitive. How rewarding exactly? Let’s look at an example.
Business transformation – Flexible routes leads to big rewards (case study)
Change can be challenging, even for small businesses, but we operate in a business environment that is dynamic, with new players equipped with the latest technology making it difficult for traditional methods to remain profitable.
This new playing field is forcing managers to think about how they do business with fresh eyes, and consider different ways of doing things.
We recently worked with a large catering distributor (a Forbes Top 300 company that services more than 37 states in the US) to see how their routes could be optimized, illustrating how much could be saved depending on how restrictive their route conditions were.
For a fleet that has been in business for almost 100 years, change could have been a daunting prospect, however the tests run on their existing routes showed potential for some exciting gains.
- No route changes – 3% reduction (over 2,000 miles saved per vehicle)
- Some route changes (e.g. flexible delivery time windows) – 8% reduction (over 5,500 miles saved per vehicle)
- More route changes (minimum constraints) – 16% reduction (over 11,000 miles saved per vehicle)
So, how much could your fleet save? If you’d like to find out, then contact us and we can help you find ways to stay competitive, keep your business economical, and your drivers on the best routes.