Knowing the fastest option is not always the most important thing for deliveries. Other aspects like fleet selection, order allocation and visit sequencing add to the complexity of the task. Based on the vehicle type, the fastest route may not be available. ‘Furthermore, the points to be visited may have time windows (i.e., orders can be delivered from 10 am to 4 pm) or vehicle constraints (i.e., the largest vehicle that can unload in that facility) that determine the allocation of orders to vehicles and also define the sequence of the point to be visited,’ says Tuba Yilmaz-Gozbasi, co-founder at Optiyol, a company for route optimisation.
Route optimisation decreases fuel costs by 25%, fleet size by 10% and at the same time improves on-time performance by 30%. ‘This means the same job can be done by fewer vehicles and less fuel consumption,’ says Yilmaz-Gozbasi. She believes if all companies were to use a route optimisation tool the number of vehicles on the roads would significantly decrease. According to Statista, a portal for statistical and market data, retail e-commerce sales worldwide surpassed $3.5 trillion in 2020, with the
highest e-retail commerce growth rate in Turkey, where Optiyol started their operations. The company reached 10x more users in 2020 and is getting more requests from delivery companies to meet this growth.
Optimising the routes and savings in transportation costs are not the only benefit of route optimisation. Consumers demand free and quick shipping with hourly time commitments and instant notifications for the whereabouts of their packages. ‘Route optimisation, complemented with driver apps and tracking, satisfies all needs of consumers, shippers, carriers and drivers,’ explains Yilmaz-Gozbasi. In addition many new companies are entering the delivery business due to the enormous growth, embracing a fully digital solution from day one.
For many legacy operators the challenge was to get over the old ways of doing route planning and rely more on digital tools in an environment where (i) demand is more variable in terms of geography, timing and order quantity; and the set of customer locations is growing and changing every day, (ii) fleet structure has changed, both in terms of different sizes and costs.
‘Everything was changing so fast that companies couldn’t rely on the experience of their employee,’ Yilmaz-Gozbasi adds. ‘Demand changed tremendously so the rules of traditional planning couldn’t be applied.’ The preferred option was for solutions that were robust and able to take into account the constantly changing conditions.
“We concentrated on understanding why most organisations still relied on manual efforts to plan routes even though they invested a lot of time and money in implementing optimisation solutions. It turned out most solutions were purely based
on maths and ignored the human aspect of field operations. Optiyol’s secret sauce is our comprehensive data model which feeds flexible and tunable algorithms for each operation. We capture as much human experience as possible for the most realistic representation of operations.” explains Yilmaz-Gozbasi.
When she talks about implementation Yilmaz-Gozbasi stresses that route optimisation software is very easy to install. Some companies were reluctant to go down with it because they were worried it could negatively impact orders fulfillment in times when demand was skyrocketing and social distancing rules were in place. She believes projects fail when employees are not onboard with the idea and managers do not explain well why a digital tool is needed and how it can help them. ‘These projects pay for themselves,’ Yilmaz-Gozbasi ensures. Due to the pandemic, however, more people have realised the need to make the shift to digital route planning and optimisation.
Look into the future
Yilmaz-Gozbasi believes the rise in e-commerce will have a great impact on where goods come from. She expects to see more hubs being created as a substitute to large retail stores, as well as more innovative ways of delivery being used. This will make the task of route planning harder and more complex. The planned changes in many city will also force companies to consolidate deliveries to retail areas.✷
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