How Route Optimization Can Cut Costs in Your Supply Chain

How Route Optimization Can Cut Costs in Your Supply Chain

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Transportation plays a vital role in any supply chain and especially in perishables. The more complex routing requirements of companies get, the more important it is to opt for a route optimization software that can ease the process.

An inefficient transportation system can have costly and disruptive consequences for a business. On the flip side, a route optimization software can give companies the edge they need to compete in today’s market.

What is route optimization software, anyway? Some businesses tend to think of route optimization software as a guide for telling them the fastest way to get from point A to point B. But intelligent, data-driven software does a lot more than that.

In this article, we look at the benefits of route optimization and at what an effective route optimization software should include.

Table of Contents

What Ineffective Route Planning Is Costing You

To understand how critical the issue of routing is, let’s first look at some of the costs of ineffective route planning.

The most obvious thing a business stands to waste here is fuel. When a carrier’s route is inefficient, every extra mile means more stops at the gas pump. Not only that this is costing companies money, it can also have a damaging effect on its reputation when it comes to environmental sustainability.

An ineffective route also means increased cost of labor. The more time a driver spends on the road, the more money a company ends up spending. 

But perhaps the worst thing a bad route choice can do to a business is lead to dissatisfied customers. Today’s customers expect deliveries to be on schedule, no matter what disturbance is happening on the supply chain. Delayed shipments are therefore, unsurprisingly, one of the leading factors in losing customers.

Benefits of Intelligent Routing

Optimal delivery routes usually depend on a variety of factors. For example, where the customers are located, their preferred delivery times, vehicle capacity, available drivers and more.

Route optimization allows supply chain businesses to manage a car fleet, get real-time driving directions, add multiple stops as they go, improve productivity and improve SLA (service-level agreement) compliance.

More than that, the right route optimization software can provide your business with these benefits:

  1. Save (a lot of) money. Cloud-based routing software allows you to reduce your milage, limit fuel consumption and save time planning, ultimately cutting down your transportation costs substantially. 
  2. Stick to the schedule. Needless to say, getting a package delivered on time is probably as important as delivering it to the right person. A route optimization software helps you analyze traffic patterns to avoid unpredictable setbacks that might hurt scheduling.
  3. Keep customers happy. In a world of increased consumer demands like fast shipping, delivery flexibility, and live ETAs, an intelligent routing software can notify customers about the status of their order, allow live tracking, delivery confirmation emails and more. The more you keep your customers informed about their delivery the more you can expect satisfaction levels to go up. 
  4. Make carriers your brand ambassadors. having a mobile app with all the relevant information about the customer will help your drivers be more affable, for example by greeting customers by name and knowing the details of their order.
  5. Do more. Intelligent routing is a great productivity enhancer. When routes are optimized based on location, equipment, and goods, drivers can make more deliveries in less time. 
  6. Stay organized. It can be a logistical nightmare to plan and monitor a fleet of delivery trucks. A route optimization software can make all the headache of having to  deal with unplanned road work, vehicle maintenance, increased demand or drivers’ vacation requests, simply go away. 

What to Expect from a Route Optimization Software

The right route optimization software should be optimized to the specific needs of your business. Here are some considerations to guide your choice.

Does it have real-time traffic tracking?

Real-time traffic is unpredictable, which often results in steep logistical costs. The only way to deal with it is by having a reliable software that plans routes and calculates ETA based on dynamic, real-time data.

Does it use accurate geocoding?

Knowing how to direct carriers to ambiguous addresses via the safest, fastest and easiest route is the key to accurate geocoding and the foundation of a good routing software.

Does it incorporate historical data?

Learning from past historical data and preparing accordingly is the basis of all good planning. A good routing optimization software should be able to give you the optimal route based on customers’ preferred delivery times, availability and special instructions for delivery. As well as insights into traffic conditions at certain times of day.

Can you learn from it?

Being able to track and manage your entire operations in real-time on a single platform is a great advantage. If you are then able to compare actual routes vs planned routes or the performances of different business hubs, then you’ve hit the jackpot of route optimization software. 

How Cheetah Can Solve Your Routing Troubles

Cheetah Intelligent Routing provides businesses with an intelligent route planning suite that helps reduce costs in warehousing, transportation and inventory.

With an effective route planner at hand, your service levels, efficiency and operations visibility will get the boost they need. Cheetah’s Intelligent Routing suite gets you:

Automated Routing: Daily routes optimized with traffic conditions, truck sizes, and customer delivery preferences.

Dynamic Delivery Windows: Allow your customers to schedule delivery windows that better suit their business needs.

ETA Messaging: Integrate our communications tools to keep your customers informed about ETAs and real-time delivery updates.

We help your logistics in every mile so that your customers stay happy and your bottom line gets bigger.

Get in touch today to schedule a demo!

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