By Tom Kelley
Routing optimization is one method by which distributors cannot only cut delivery costs, but also improve customer service. In addition to determining the most efficient routes based on available fleet resources and the day’s delivery orders, optimized routes enable a distributor’s customers to better schedule their labor resources based on accurate delivery windows.
While dedicated route optimization software is used by a significant number of beverage fleets, an amazingly high number of the fleets still are using manual routing practices, home-brewed database programs, or the rudimentary scheduling capabilities available in some ERP software packages. In many cases, it’s inertia that prevents the upgrade to modern optimization software; in other cases, it’s the mistaken belief that the fleet isn’t large enough to generate an acceptable ROI by using the software.
High fuel prices and a tough economic environment should provide enough motivation to overcome corporate inertia, and small-fleet-friendly routing optimization programs are helping to address the ROI issue.
Paragon Software Systems
One routing optimization vendor, Paragon Software Systems (Surrey, U.K.), offers solutions that are cost-effective for fleets with as few as 10 trucks, while still being robust enough to handle thousands of trucks dispatched from multiple warehouses across a region.
Routing and scheduling are the core elements of Paragon’s software offerings, made available as individual modules, or as part of an integrated fleet management system. Beyond the core routing and scheduling, other module features include load optimization, territory optimization, labor scheduling, maintenance management, vehicle tracking and distribution center location planning.
The software is designed to work equally as well with stand-alone single fleet operations (Single Depot), as with centrally-managed multiple fleets, each operating from separate distribution centers (Multi Depot). It also can manage routing and scheduling in an environment where individual trucks interact with multiple distribution centers (Integrated Fleets). In addition to optimizing relatively static routes in market segments like HOD water, Paragon also manages dynamic routes where volumes vary daily in market segments such as on-premise beer, wine and spirits.
Among the savings cited by Paragon’s clients are reduction in route planning time by as much as 50 to 75 percent, reduced total transportation costs by up to 20 percent, reduced order lead time, improved delivery window accuracy, reduction in total fleet miles, reduction in fleet size; reduced fuel consumption and reduced environmental impact.
In order to deliver big-fleet functionality at a price that won’t bust the budget of a smaller fleet, Paragon’s pricing model is based on the number of trucks being managed, the number of program modules added to the base-level routing and scheduling capability, and the fleet’s required level of mapping detail.
“For a fleet of less than 20 trucks, the routing/scheduling software with some mapping and user training would come in well under $20,000,” according to Paragon CEO Will Salter. “And the beauty of that is you can add capability to that system, so if the fleet suddenly became a 100-truck operation, running out of a number of distribution centers, you would not throw away that initial investment.”
Meanwhile back on this side of the pond, Maryland-based vehicle routing and scheduling company Roadnet Technologies recently released the latest version of its “Roadnet Transportation Suite,” version 3.50 (RTS v3.50). The latest edition incorporates technological upgrades that more accurately track service time maintenance intervals, improves the quality of location delivery cost reports and includes new features to address a range of product and delivery variables. “RTS v3.50 reflects the result of feedback and extensive conversations with our existing customers,” says Roadnet CEO Len Kennedy. “Our team of engineers utilized this input to implement new features that can achieve important bottom-line and resource efficiency results.”
The fleet management software upgrades focused primarily on the service (delivery) time maintenance, location delivery costs, and mid-route sourcing product features. The “Service Time Maintenance” tool ensures that future routes and calculations are more accurate by utilizing historical delivery data. A “Location Delivery Cost” report module provides accurate data regarding the actual costs for visiting individual customers.
Other features in this version of Roadnet’s fleet tracking and management software include additional break windows for routers to configure their system to account for extended work days; a “Mid-Route Sourcing” feature that factors in additional activities during the regular pick-up and drop-off schedule and a Return to Stop and Redeliver element that addresses overlooked product that failed to be delivered at the pre-determined stop.
HighJump Software now offers a hosted version of its RouteCenter Route Acounting System (RAS), eliminating much of the cost and administration time required with installed software. As with the installed version, “RouteCenter On-Demand” manages routes, handheld computing devices, customers and driver schedules. It also integrates with corporate accounting and ERP software.
The difference is that the system is hosted in Highjump’s secure data center instead of being installed on-site at your business. Installed software requires space, electricity, cooling, bandwidth, hardware and trained IT staff. The On-Demand system eliminates these costs and maintenance hours.
Whether installed or hosted, Highjump’s RAS software integrates sales order management, inventory management, route planning, delivery, driver reconciliation and financial accounting.