Logistics managers say that they need a well-planned logistics schedule to plan and confirm that items will be delivered to customers within the agreed-upon service terms. However, if your logistics company is like the vast majority that has to deal with the last mile of logistics duty, planning a multi-fleet distribution operation can be an extreme challenge, especially when executed manually.
Route operations are less efficient than they should be if logistics businesses still use traditional tools to plan last-mile distribution. The general customer service operations depend on delivery operations, which are costly. It can be challenging to determine how your firm is losing funds when using manual route planning.
In this blog, we'll emphasize the impact of planning delivery routes as well as how streamlining route planning technology can help your business save on operation costs.
Route Planning Red Flags You Should Never Ignore:
1. Increasing transportation costs
As your business grows, you'll learn quickly how important it is to choose both more vehicles and drivers. As a result, fleet costs rose faster than expected. The cost of the fleet can be lowered by reducing the number of planners, drivers, trucks, and miles driven.
2. Incomplete information on delivery operations
Planning your routes by hand means you can't get important performance data that could help you grow your business. It is challenging to provide reports that top management can use to evaluate the effectiveness and costs of business operations. Key indicators such as number of deliveries, miles per drop, cost per drop, percentage of on-time deliveries, customer retention rate, etc., will be hard to calculate.
3. Conflicts inside the organization
Increased driver shifts result from unanticipated delays. Drivers may believe that the planner is showing favoritism to other drivers. With manual route planning, it's possible that feelings will get in the way. Companies are willing to pay more to fill the need for drivers, so it is your responsibility to provide them with a pleasant operating environment.
4. One employee is responsible for route planning
Most businesses have a small group of employees who are in charge of planning routes because they know the needs of customers and where they live. The biggest problem is that they take all this data and knowledge with them, leaving you with no base to build upon. To avoid this threat, it is crucial to implement an automation system for data transfer.
5. Limited data to measure customer service costs
The data about delivery cost per drop is excluded when manually planning routes. This makes it tough to evaluate the potential profit of a business proposal. Many companies wrongly expect that a business can immediately turn a profit.
Advantages of Using Route Optimization Systems:
Reducing your company's last-mile delivery costs is only one of the many advantages of automating your last-mile delivery operations. Take a peek at some of them below:
Improve the customer experience by empowering the use of the quickest available delivery route.
The required number of drivers can be scheduled through driver scheduling.
Save fuel costs by utilizing an algorithm to determine the most efficient route.
Vehicles are driven less frequently, which results in a lower operational cost.
Why Should You Use Norma LIVE for Route Optimization?
The time it takes to plan routes is reduced from hours to minutes using AI-based route optimization software like Norma LIVE. You'll have plenty of time to consider other outcomes. Using this software, you may examine how delivery costs affect profits at a deeper level.
Warehouse management, payroll, accounting, and order management are just a few examples of operational processes that could be automated. Reduced costs and improved delivery performance are two major advantages of automated route planning.
Download the white paper "5 Tips to Scale Your Last-Mile Delivery Operations" to find out several tips for last-mile delivery options you can use to scale your business.