In modern logistics and transport operations, we often come across really well organised and highly customer centric organisations that for one reason or another manage to service their customers through highly inefficient transport routes. In many cases the transport schedules we see will have built up over time and will be based upon the knowledge and experience of local transport operators.
Nothing within these schedules and how they are constructed would typically imply criticism towards those managing the transport operations. It is simply the case that delivering the day job and ensuring that customers get the products they deserve on the day they expect them takes priority ahead of tactical and strategic evaluation of what delivery routes
should look like.
Delivery schedule problems can include a range of factors, such as:
- Imbalances between volumes on routes on given days;
- Variabilities in demand and service area coverage leading to significant fluctuation of demand from day-to-day within the operation;
- Incorrect fleet and vehicle sizing leading to expensive cost and underutilised capacity;
- Fixed daily routing often meaning driver resources are underutilised, missing the opportunity to make additional deliveries.
As transport consultants we have seen many different types of customer delivery inefficiencies such as those listed above, and of course many more. There are a number of ways that issues such as this can be addressed, and the approach to doing so really depends on how you as a business operate, what your cost and service objectives are, and how influential your
customer base is in the decision making process.
Before embarking on a process to redefine and optimise your delivery routes, it is important to particularly understand the impact of your customer base on the choices you make. In many organisations the commercial or sales team will tell you that under no circumstances can you change how we deliver to customer X or customer Y. When challenged, and often when the actual customers are spoken to, it can be found that on some occasions customers are prepared to be more flexible than you may otherwise have thought.
It is important however not to assume how flexible your customers can be, and before embarking upon any routing or service coverage change, it is sensible to undertake a process to survey your client base and understand how flexible they could be in given circumstances. It is also important to know that you may not need a one-size-fits-all approach. A level
of flexibility displayed by one group of customers does not necessarily need to be matched by all customers for you to be able to get efficiency benefits from reorganising how you deliver to your customers.
With a clearer understanding of the customer limitations, you can then undertake a range of different options.
Static Re-Plan
A static replan involves reorganising your customer allocations and delivery days and creating a new static plan that can be
followed each day of the week. This is the least flexible type of plan, but can often be the easiest type to implement.
Partial-dynamic re-Plan
A partial dynamic replan will involve creating fixed customer to depot service area allocations but allow the depot to dynamically plan how it delivers customer demand on each day an area is serviced. As you move into this type of solution, the role of the transport planner becomes more critical, as they will be tasked with deciding how best to route a given
customer order.
Dynamic scheduling (fixed delivery days)
Dynamic scheduling with fixed delivery days provides a good means of balancing typical demand across the working week with the ability to be flexible as to how the demand is delivered. In this type of solution as an example, customer X may be allocated delivery days on two days per week, but within those two days, there is no preset route or plan created in advance
before customer demand is known. Typically to achieve planning of this type will require the implementation of a dynamic scheduling transport planning system. The level of decision required by a manual (human) transport planner would lead to likely poor vehicle fill and potential failed customer service.
Fully Dynamic planning
Fully dynamic planning is where customers can order anything on any day (subject of course to standard minimum order quantity or value levels set commercially by the business). In this scenario it is highly unlikely that any form of manual planning solution will be workable. Fully dynamic planning is likely to require efficient integration of host ERP /
customer management and ordering systems with a well-designed transport planning system. This type of solution will typically offer the optimum customer service experience, that is almost certainly at the higher end of distribution costs as customer demand will typically be split across a week, and your delivery fleet will need to travel across significant parts of the country on much longer and less dense delivery routes.
Summary
Efficient transport planning can be delivered in incremental steps. Getting back to the first point, understanding your requirements and your service aspirations is the first thing to do to ensure that the right solution is ultimately implemented. Typically, inefficient routes can be costing your transport operations upwards of 20% more than efficient transport operations, and in the first instance understanding the benefits is where transport consultants such as our team at Logistics Consulting offer the greatest value.
