“You’re on the shortest route to your destination”. An innocuous statement, but a credible one that puts many minds at ease. But logistics in businesses is different from logistics catering directly to consumers. Handling a number of consignments for several customers is a logistics problem simply not solved as easily. Vehicle routing problem (VRP) is an issue that has plagued the supply chain sector since ages and technology has made it easier to test the different algorithms that have evolved to deal with the problem. Within goods distribution, labour and rent costs are more rigidly structured, while transportation costs make up the majority of spends for distribution, while also offering the most flexibility in costing. 1 This is why route optimization techniques on a digital platform need to be honed for any business and this is possible only through a technology-forward approach.
For the Indian logistics industry that has gotten onboard with the smartphone revolution, leveraging its benefits for their day jobs is still a long way away. For many traditional players, squeezing profits out of logistics is still about taking the well-travelled route, and depending on drivers to figure it all out. Less effort. Less time spent talking. Simple.
Can we schedule two pick-ups within the same location? Can they ensure optimal capacity usage for their cargo? These are only the most basic of questions. Technology not only answers these, but many others with more accuracy than can be provided by human intervention. For technology might be present with traditional players, but not necessarily the intelligence required to manipulate it. The different route optimization algorithms used in any tool are extremely important as they can decide the margins for any business. Ongoing monitoring and updating activity as carried out only very few players globally will evolve to be the most sought after integration for many businesses, but already, bigger players in the field have jumped into using tech-based logistics for their ventures.
The 13-15% range of logistics costs for each product still operate on the higher end for traditional players. There remains a straight 10% saving to be made, provided there is ‘right’ kind of route optimization with the right players, which can only be derived from constant upgrades on a SaaS platform. While digital transformation is much touted about in every industry sector, Indian logistics are yet to catch up with the same. For many who have, the returns ensure that they stick with the approach. This 10% cost-savings can translate into a 12% increase in usual profits and 15% decrease in travel time. Here’s how players are using route optimization to achieve these numbers:
Seamless coordination for multiple pickups
Traditional players struggle to deliver to different drop points and serve multiple customers around the same geographical area. Route optimization, driven by geographic information system-based (GIS) software ensures scheduling and planning trips that save a lot of back and forth. Not only does it ensure that high density routing is possible, but it also achieves it within efficient timelines. Also, as pick-up/drop points are added to a single route, dynamic routing algorithms pick up the inputs and offer a highly optimized selection that allows the most efficient usage of time, fuel and effort. Dynamic routing is here already and offers the next big thing to businesses looking to optimize logistics.
Vehicle space optimization
SaaS products for logistics are also capable of ensuring that trucks operate with optimal usage of cubic capacity. Routes are charted instantly that ensure multiple pickups by the same truck. Not only does it prevent scheduling conflicts, it also boosts vehicle utilization by 15%. The savings on fuel adds up to another bonus.
Digital fleet mapping
While traditional players struggle for real-time availability of clients, tech-enabled players like Instavans are tapping into an all-digital platform that provides a seamless logistic experience. To map real-time availability, data monitoring, and notifications under route optimization and ensure truck and driver availability, safety, and maximum capacity utilization is less of a challenge using a SaaS-based logistics partner.
The lesser turnaround time in each process allows for higher savings, with more choice. Less effort. Less time spent talking. Simple.