Routing And Optimization Software — You Need It!
Route planning, done only the way a computer can, saves thousands of dollars per year in transportation costs for greenhouses.
June 17, 2008
If there is one area of transportation that you can get the most from technology, it is reducing the number of miles your deliveries are routed and maximizing how full your trucks are. There is a reason the "C" in "PC" stands for "computing." Computers are designed, by their very definition, to take in data and analyze it according to rules set by the operator or program.
For example, let’s take a simple route that goes from point A to point B (one pickup and one delivery). Any reasonable person may think that with this simple scenario they can be as efficient as a computer in calculating the route. This may or may not be correct (and you would probably have to resort to using PC mapping software to get your results in the end).
The bottom line is that even between two points on a map, there are literally millions of route permutations regarding the route that could be taken. Most simple mapping software bought in a store can do a routing based on the shortest miles, scenic miles (great for vacation traveling) or avoid toll roads (to save money), etc. However, these simple mapping systems have one major flaw – they only do one trip or journey at a time and are designed for car travel. Therefore, they do not allow you to input data about your orders (their size, shape or constraints, etc). You need to calculate that yourself – a recipe for disaster. And if you have, for example, 50 deliveries to make, forget about even getting close to being efficient if you do this calculation on your own.
The number of possible routes and trucks needed are so large that it is not uncommon for you to be 20 percent less efficient than even the simplest routing and optimization system. Take this from a guy who sees this every day of the year – a well-honed routing and optimization program will save you up to 20 percent (or more) in miles traveled, trucks needed and money spent. It is that simple and easy to prove (e-mail me at firstname.lastname@example.org for a real-world sample from a medium-sized grower. All names protected, of course).
Costs And Benefits
How do you make sure every time you process your deliveries you are not giving away thousands (sometimes tens of thousands) of dollars due to simple inefficiency – inefficiency that is easy to eradicate.
Fortunately, there are several solutions available to you. But, first, the "get ready to get your checkbook out warning." Routing and optimization software is not cheap. You don’t go down to your local Computer Universe store and pick up a shrink-wrapped box for $29.95. In fact, you won’t even find the software on sale there. The software you need is available for the bargain basement price of – are you sitting down? – $10,000 or more. It is not unusual to spend $20,000 or more by the time you have a few user licenses, all the bells and whistles you need and the hardware to run it on.
Moreover, you can expect an annual license fee (for updates, fixes and technical support) of 10 to 20 percent of the initial price. So it is a major investment. On top of this, you will likely need an actual mapping system to interface to, such as PC Miler from ALK Technologies or Microsoft MapPoint. This will add $2,000 or more to the total acquisition cost, if you do not already have one of these products in your office.
You will also need someone to actually use the software at your company. While they are generally easy to use, they are not as simple to use as Microsoft Word or your chosen e-mail program. These are powerful and full-featured systems designed to allow the user to play with a whole host of variables in order to massage the results that best fit your needs. In fact, a reasonably intelligent user will be able to squeeze an extra 5 percent efficiency from the system by just using it correctly. So make sure you have someone in the office who will take the time to understand the software and how it should be used. Yes, this could add cost, but I am sure the savings will more than offset the costs in a matter of weeks or months.
Is It For You?
The next question to ask is if routing and optimization software is right for you. While this is hard to answer, I think it is not a question of if it is right for you, but rather a question of how long will it take to see a return on your investment. For example, if you send out 3,000 trucks a year, your return will be almost immediate and you will start "making money" right away. If you send out 100 trucks a year, you will see benefit, but it could take years. Also, if you find your deliveries are very predictable, going to the same places weekly and you are confident you are running things efficiently, you may not need to invest in this type of software. But if in doubt, you can contact a vendor and ask. Most are happy to look at your information and tell you whether their system is right for you.
There are several vendors out there that can help. MicroAnalytics (www.bestroutes.com) is used by 2,400 customers worldwide, and according to the company’s Dan Buttarazzi, it is the most used routing software in the world. MicroAnalytics’ own calculations show savings of over $16,000 per year for a user with only 10 trucks per week and saving only 50 miles per day. Essentially, this means your investment is paid for in year one and the money saved stays in your bank account. Your return will be faster if you run more trucks per week or your mileage savings are larger. MicroAnalytics has found several of their grower clients, including Metrolina Greenhouses and Stacy’s Greenhouses, saving $30,000 to $40,000 per year of use!
Another solution is Direct Route from Appian Logistics (www.appianlogistics.com). This company just celebrated 20 years in business and provides a system that integrates to GPS tracking systems. Several variations of the system solve problems unique to certain growers. While more expensive than other systems, it is a good choice for "mega growers" or growers with many locations or very complex delivery needs.
There are other vendors that can also help. Most growers will benefit from routing and optimization software. In fact, I will go as far as saying you need it. Unless you have the simplest of operations, you will see results the first time you use it – and that is money in your pocket.