The profits of logistics companies are largely determined by the quality of their route planning. So for logistics route planning, the companies’ planners (dispatchers) need to work with the best tools.
However, even today many transport companies still rely on manual logistics route planning. Is that still responsible, when excellent automatic scheduling software are available?
In some offices of logistics companies, a map still hangs on the wall. Using sticks, the planners map out the journeys along the loading and unloading addresses. The quality of this route planning method is mainly dependent on the knowledge and experience of the planners. They know the addresses and bottlenecks along the way, often because they had been behind the wheel for years.
Nevertheless, the human brain cannot always calculate all journeys accurately, down to the mile or minute. They simply lack the tools and the time.
Switching to logistics route planning software
The first logistics route planning software provided relief. Planners suddenly got their hands on a digital planning board. This allowed them to easily link transport orders to trucks and drivers.
They could add up the loading meters per trip to check whether a truck still had room for an extra shipment. With a route planning software they could calculate the distances and driving times for each trip. This led to better and quicker route planning process. Call it logistics route planning 2.0.
But when using the digital planning board in a logistics management or other administrative system, the quality of the planning still depends on the knowledge and experience of the planner. It is still the planners who have to distribute the orders over the journeys.
Because planners can’t keep puzzling endlessly, they have to rely on gut feelings and rules of thumb. At the same time, they must consider many requirements and wishes, such as time agreements, vehicle specifications, driver certifications, time windows, and environmental restrictions.
Bigger profits from better route planning
The question is whether today it is still optimal to purely rely on the knowledge and experience of planners. After all, the quality of the planning determines the load factor of the transport company. And the higher the load factor, the greater the profit margin.
This requires logistics route planning that is based on hard facts, instead of an often-deceptive gut feeling. It is especially important for the logistics sector, where profit margins have been narrowing for years.
In addition, logistics route planning is becoming increasingly complex. Customers are making more and more demands and wishes, which translate into an increasing number of restrictions that planners must consider.
And if that wasn’t enough, many governments put increasing demands on logistics companies. Those include limited time windows, environmental zones (low emissions zones) and mandatory access routes in city centres.
It has become almost impossible for planners to consider all the restrictions. The risks for a company relying on a single planner for its business operations are simply too big.
Automatic logistics route planning
With an intelligent automatic route planner we can make the next step in transport planning. Call it logistics route planning 3.0.
With such a system, planners can increase the automation of their work. For example, they can project the orders on a digital map and then create their own journeys. The system checks whether all restrictions are met, and that maximum loading capacity is not exceeded (semi-automatic scheduling).
Planners can also opt for a fully automatic scheduling of the logistics route planning. With only a press of a button, advanced algorithms distribute the orders over the journeys and create a plan proposal.
An automatic route planning software has many more advantages. Planners complete the scheduling earlier, make fewer mistakes and don’t forget about restrictions.
Because the algorithms calculate many more possibilities in a few seconds, what takes planners a few hours, automatic scheduling leads to a higher load factor and a higher profit margin.
And finally, much of the data and the restrictions are recorded in the system. So if a human planner leaves the company, the knowledge and experience remain available.
Planners are still needed
What does that mean for future of planners employed in logistics companies? It seems certain that route planning software will not replace the dispatchers! It is still not recommended for companies to blindly rely only on a plan proposal produced by algorithms.
That’s because there are, almost every day, exceptions to the rules and restrictions laid down in the logistics route planning software. It is the task of the planners to check the plan proposal for those exceptions.
In addition, the planners know better than algorithms where there is room for maneuver and for refining the proposed plan. Because the overall planning time decreases, planners have more time for optimization. That can increase efficiency by a few percent every day – and every percent counts.