Routing isn’t one size fits all. Each business has different needs and goals that dictate the best solution. When there’s more than one way to route, it can be challenging to know which routing method will make you most efficient. And smart fleets needs to maximize efficiencies wherever possible.
First, it’s key to understand the two main types of routing: standard and dynamic.
Standard routing works like a template. The order in which customer orders come through does not matter — orders are always routed according to the sequence in the template. With standard routing, things like customer time windows and route capacity aren’t factored in. What’s good about this? For one, standard routing allows you to maintain consistent customer service. It also lets you pre-assign a driver to each route. Drivers see the same customer each week and therefore build a good rapport with them. You can also pre-assign equipment so that drivers use the same equipment on the same routes each day.
A con for standard routing is that this may result in higher delivery costs. If your sequence is not done well in your template, your drivers may be driving all over the place. It’s difficult to maintain consistent sales because of the nature of standard routing. Say you have one stop on route three today — you’re creating a route with only one stop. This creates inefficiencies. And say you add fifteen new customers? You will need to add these new customers to certain routes and rebalance your template to make sure you don’t put everybody in one place.
Dynamic routing, on the other hand, creates routes based only on the orders in the system. With dynamic routing, you’re only looking at the order you have today. Stops are clustered geographically and routes are created based on variables such as how many vehicles you have, total run time, business constraints, and service times.
There are several variations to dynamic routing, including cell routing and zone routing. Cell routing has a physical boundary whereas with zone routing, you can get around that with flexibility between zones.
Benefits of dynamic routing can include fewer trucks, improved sequencing of stops, and reduced miles and run time. Some cons are that customers could lose consistency with drivers and drivers are unfamiliar with territories.
So, which way should you route?
Each business is unique and what works for your company could be drastically different from even your closest competitor. You’ll need to consider things like number of customers with orders, customer locations, number of drivers, types of equipment, and time windows. It’s also imperative that you consider your business goals when deciding what type of routing works best for you. You’ll need to consider customer relationships as well as cost, distance, and equipment efficiencies.
View this on-demand webinar to learn other ways fleets are gaining efficiencies in their delivery planning.