Promising the moon
The Sentio team does not promise cosmic transport cost savings on day one. For example, during the first conversation with potential clients, we do not tempt them with 50% savings on fuel due to a reduction in the number of kilometres driven. Instead, we invite the clients to join us in an exercise to determine how much costs can be cut and improve the transport management department.
What is the best way to accurately quantify the benefits? Several essential 'ingredients' will be needed for the exercise:
- historical data related to orders completed by drivers over a representative period (minimum of one week, most often one month)
- a description of the services provided in fulfilling the orders (e.g., collecting cash, carrying to the floor, obtaining a signature on a document, etc.)
- information obtained from a direct interview with dispatchers and drivers - we then determine the times for the activities described earlier
- a description of the biggest problems drivers and couriers face - the day-to-day pain points are usually outside the transport management system. However, it is essential to emphasise how important it is to communicate current challenges transparently - this is precisely when you need to pay attention to uncomfortable organisational or process issues.
Unlearning Old Habits
Having promising results from our analyses, we present them to the clients. During such conversations, one fundamental question always arises:
This is an important question as it involves a fundamental change in the organisation of the transport process. Most often, drivers are assigned to fixed regions, which means that, in the case of recurring order locations, both the driver and the employees on the receiving end of the shipments know each other well and usually trust each other. This solution has definite advantages, because the driver, Andrew, delivering a parcel to Elizabeth's shop knows that the parcel should be left at the back, third door on the right. This makes the process quick and efficient and is very convenient for Elizabeth. On the other hand, a new courier would need more time to provide the same service.
Route planning based on the fixed assignment of drivers to specific areas will certainly bring tangible savings, but these could be higher if we treat drivers as "free electrons." Of course, in practice, this means that driver Andrew will only be at Elisabeth's shop sometimes. Still, only three times a week because the route planning system will assess that on the other two days, delivery by another driver will have a more significant effect in terms of fewer kilometres driven and the ability to fulfill more orders.
Of course, we still have the issue of slightly longer delivery times and, which is also worth mentioning, cases of unfamiliarity with the area by a courier who only visits sometimes. A new courier may need more time to find a place to leave his vehicle or park it where there is less risk of being fined.
Do optimise all orders for a given area and then allocate them to the drivers? Or, on the other hand, plan the order of orders for pre-defined driver routes?
There is no single correct answer here. With the results of Sentio's analysis, the clients make data-driven decisions on whether they would like to save, for example, 7% while maintaining fixed regions or perhaps be tempted by 12% with the variability of assigning orders to drivers (we know from experience that between 15% and 25% are addresses that different drivers will visit).
From Sentio's point of view, we are keen to provide the tools that will give the most significant savings. However, we are mindful of how essential the convenience of service recipients is, and route planning algorithms cannot calculate this aspect. These are specific and very individual issues. We discuss this critical aspect with our clients because, in the end, the previously mentioned 7% savings can give a more significant overall benefit than 12%.
Promising results and what comes next
Based on more than 70 analyses, we know that companies that do not use route planning systems and therefore pay on average between 5% and 15% more for transport costs. And we are not referring "only" to fuel costs.
The reduction in fuel costs is due to fewer kilometres driven, but the severe savings start when you can complete the same orders with a fleet of nine cars instead of ten. One less vehicle means fewer fuel costs and, for example, one less leasing contract or saving one driver's salary.
That is how much actual benefit our 10% can bring, and that is "only" transport costs. To this, we can confidently add a definite improvement in the quality of the work of dispatchers, who, with a modern management tool, make better decisions and make far fewer mistakes.
At the Sentio Team, we have yet to have a case where we told a client there was no chance of saving. Another vital aspect is worth emphasising - the 'yes' decision to implement a modern planning tool is only the beginning of the road to more optimal processes, as it involves changes at the organisational level. This is where the power of human habit is always extreme. For driver Andrew, changing the number of shops he visits daily can be a revolution, just as it would be for the dispatcher to give up manual route planning using a map in a popular browser.
Optimal route planning has nothing to do with a single or short-term action. We do not tell our clients that we have a magic wand with which the situation will change for the better overnight. Instead, we responsibly claim that the Sentio Team's tools and experience will enable the client to achieve tangible benefits.