As a delivery company, you know that as you grow your delivery volume, every delivery needs to be optimized for perfection. Given that, it’s important to build the right system and employ the right set of tools that will help you manage your delivery routes, taking into consideration all the factors that make the difference between a successful and a failed routing strategy.
In this series on route optimization, we will list these factors and explain how we approached them at Deliveright to optimize our routing, improving the chance that every delivery will make it to its destination on the first try while managing our costs and efficiencies.
First, let’s assess some of the factors that can impact a delivery route:
- Customers – They can (and will) change their delivery preferences during and after the routing process, sometimes even while the truck is on its way to their home.
- Weather – Rain, snow, even just fog could throw off all delivery time estimates.
- Traffic – While sometimes traffic can be anticipated, there are situations where it cannot be, for example in the event of accidents.
- Unexpected complicated delivery – Unforeseen complications can always come up once at the customer’s home. For example, upon reaching the customer’s home you could realize that the furniture pieces don’t fit in the elevator, and your team must carry it all the way up to the 10th floor via the staircase.
These are just a sample of factors, but you get the gist – there are some factors that you can’t really plan for. These will cause great frustration for you and for the customers who are waiting for their deliveries. Even if everything goes perfectly, your costs still must be managed and your trucks still must be run efficiently. Your routes and schedule must make sense time-wise and distance-wise. Taking all of this into account is hard, complicated and frustrating if you don’t have the right tools.
But wait, there is some hope, and a solution!
At Deliveright, we have spent a great amount of effort to figure out how can we leverage our data analytics platform, Gloverix™, to plan, and sometimes eliminate, situations like the ones listed above, while making sure that our trucks are routed to perfection and that our delivery teams can meet their daily goals.
Here are a few approaches that we take:
- Weight / mile ratio – When you load your truck, one of the ratios that you need to pay attention to is the Weight-to-mile ratio, or how many miles a truck is driving at a given weight. Your goal is to make this ratio as big as possible in order to optimize fuel efficiency. At the same time, you don’t want your truck to sit in traffic all day or be overly packed with merchandise because you stretch your limits on this, so make sure you trade-off wisely.
- Volume per truck – An empty truck is a losing truck. You always want to maximize the volume that you load on each truck. However, you can’t wait until you get a completely full truck to make your deliveries. Your customers would be upset and your entire operation would be a mess due to the random delivery schedule. At Deliveright, we developed and adopted several distribution models that allow us to determine how many trucks we should allocate for each route (daily or weekly), factoring seasonality and other effects on demand into the models. Our models run automatically and rebalance our trucks’ distribution as we see (or foresee) changes coming. The predictability enables retailers to adapt to our delivery network and use us for some of their deliveries while still running their own trucks.
- Fight the traffic – At Deliveright, we have experimented with different technologies and approaches on how to optimize our routes to avoid traffic. We realized that for traffic, crowed-sourced decision-making is always better than relying on one software to call the shots. Hence, we embedded Waze routing optimization into our delivery teams mobile app and the results are just amazing! We have seen a meaningful increase in our delivery teams making it to their stop before or at the scheduled arrival time, and have been able to reduce our delivery window down to 3 hours. We are working to narrow it even further!
- Be fluid – Deliveright’s routing algorithm has another neat feature: it can react to changes occurring after the truck has left the hub, and adjust the delivery team’s schedule while they are on their way. For example, there are instances where a customer calls us on the day of the delivery to inform us that they won’t be at home during their delivery window. In the old days, the drive team would have take the piece back to the warehouse at the end of the day and you would have to reschedule with the customer, sacrificing revenue and time. However, we realized that making a delivery on the same day is always more cost-efficient than sending it again, and also reduces the change of damage to the furniture piece by saving it from another trip. In a case like this, our Routing Intelligence, GIT (Get It Today), will take the customer’s preferences (for example, a later time on the same day) and will re-route the delivery team’s route and push an updated route to the delivery team’s mobile app. The delivery team does not need to do anything, as the route changes automatically. The satisfaction that the customer has once they see that they can still get their delivery despite the last minute change – priceless!
This was part I of optimizing your routes. Part II is coming shortly.