Route optimization is the planning process of the most cost-efficient route. It goes way beyond the delivery from point A to point B. There are many constraints involved with route planning in terms of time, resources, operator, conditions, communication, and technology. The latest route optimization strategies focus on eliminating these constraints via efficient solutions. Using real-time and historical data is the most critical process in finding the best route.
Companies need an adaptation to the current conditions as the new digital trends arise. There are still some conventional ways used for route optimizations. Creating routes manually is the oldest way to do it. However, it is risky and not efficient. Saving time or controlling costs is not possible with manually optimized routes. Why? Because there will always be costly human errors, lack of fast response, and lack of instant response ability. Most importantly, manual route optimization will always be a challenge for growing your business.
Route optimization is critical for many different business areas. Logistics and shipment companies are not the only ones that benefit from developed route optimization strategies. Every business which needs to control a fleet of vehicles could benefit. It is essential to implement route optimization strategies from waste management for smart cities to food delivery businesses.
The human-made optimizations are not keeping up with the trends, and some methods handed over their places to the latest solutions. Static route optimization had been used by most of the conventional companies. It works when a business could predict customer demands and serve consistent customers.
The static method is still better than manual processes. It is the best fit for businesses that require change in strategy quarterly or yearly. But it conflicts with business growth goals due to globalization, increased demands, and high competition. There is inefficiency in the use of resources, insufficiency for saving time, and minimal data collection for improvements.
The newer strategy for route optimization is the Dynamic method. As the name speaks for itself, it is more scalable and adaptable than the Static approach. Dynamically routed network systems are fully extensible. Changes in multiple network topology can be easily adapted to business systems integration. Routes could be created hours before the delivery as the tasks change even shift-to-shift.
It is a preferable way to reduce the probability of errors and get route optimization quickly. Not to mention, SLA tracking and variable performance analysis enable instant tasks to be transferred directly to all environments.
Application is another crucial factor in route optimizations. It is used for communication, data management, and navigation for drivers. It is possible to communicate with the drivers and efficiently manage the field team on a single platform. Also, easy integration can be achieved with applications designed for third-party resources such as CRM systems and service management tools.
The newest strategy is Real-time Dynamic R.O. It is perfectly designed for continuous optimizations. Demands in real-time are considered in route optimizations. Since it processes real-time data, it is easier to sustain communication between the back office, field, and citizens. Collecting data about fuel consumption and time spent on operations increases efficiency.
From our experiences, centralized management and end-to-end system control over real-time operations were easily achieved through the Real-time Dynamic R.O. strategy. AI-based dynamic routing enables excellent fleet management for real-time routing between ad hoc and planned orders.
Time and energy consumptions in day-to-day operations could become very expensive. Controlling costs is essential for a company. Route optimizations could decrease up to 65% in total distance and nearly the same percentage in operational time with an order management system and capacity planning.
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