Plan, procure, execute, & track transportation for every shipment across your supply chain & logistics operations
A SaaS solution to help grow your business by achieving 100% perfect order execution at high volumes
Increase vehicle capacity utilization and customer promise adherence
Grow your business with omnichannel presence and automated pickups
Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
Reduce freight costs & get end to end visibility across shipments
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In the eCommerce industry, shipping has a 7% share in overall operational costs, which shoppers expect enterprises to bear. Alongside free and fast shipping of packages, customers are increasingly expecting better order visibility, multiple delivery and payment options, and much more. Getting back to the question of free and fast delivery, this puts additional pressure on businesses to accelerate the delivery process without increasing the shipping costs. Moreover, manual route planning methods fail to infuse agility and effectiveness into their delivery system.
In such a scenario, route optimization tools can strengthen the delivery and logistics operations for retailers and on-demand delivery providers. These solutions ensure customer satisfaction with enhanced transparency & minimal operational costs and help overcome the challenges of manual route planning methods. The increased acceptance of these platforms can be easily gauged from the estimated market size. The global route optimization software market is expected to reach USD 12,416 million by 2030 and grow with a CAGR of 11.56%.
Businesses seeking leadership status in terms of market share and operational excellence are upgrading their delivery abilities to ensure timely and cost-effective operations. There are several parameters that they need to consider before choosing the right route optimization tools, and one such aspect is route planning vs route optimization.
Though the terms are used interchangeably, they are fundamentally different and are explored at length in the following write-up.
Let us explore each of them individually before discussing route planning vs route optimization.
Route planning is a process of creating short and cost-effective routes for the execution of multi-stop deliveries by using artificial intelligence and machine learning (AI/ML) tools. Through advanced route planning solutions, an eCommerce company can plan the delivery route smartly by conducting more deliveries in less time. An automated route planning system will plan the route in such a manner that will make multi-stop deliveries possible as well as meet the delivery window timelines.
Route optimization is a process that optimizes business functions by taking route planning to the next level. This allows real-time generation of the most cost and time-efficient delivery route by considering multiple factors, including the vehicle type, driver schedule, delivery location, delivery time window, and more. This allows companies to drive efficiencies by reducing their overall operational cost and enhancing customer experiences.
Logistics companies can set several parameters like vehicle capacity, driver schedule, reviews, payment instructions, time windows for deliveries, etc. These parameters create a base for route planning. Whenever a company needs to accommodate any customer request, such as delivery re-scheduling, a slight change in parameters offers the best route solution by keeping business efficiency paramount.
How does it happen? How does route optimization overshadow route planning?
The answer lies in the process. Route optimization is generally performed by tools that analyze the routes using AI/ML algorithms and quickly narrow down these options with the support of advanced heuristics. Pre-set parameters infuse agility and efficiency to impact the company’s ability to exceed customer expectations.
Before arriving at a conclusive result for the Route Planning Vs Route optimization dilemma, it is important to take a glance at some stats.
These stats outline the importance of automated route planning and optimization in the dynamic management of routing in the unpredictable transport scenario.
Now, before we move on to a detailed exploration of route planning vs route optimization, let us have a quick look at the various advantages it offers.
The benefits of automated and smart route planning cannot be understated. From empowering businesses to save and optimize delivery costs to boosting customer experience, it indeed helps make deliveries seamless. Let us quickly glance through a few of the major benefits.
In business, fuel cost and delivery distance – are two elastic variables. Any unplanned increase in these two has an adverse effect on the company’s budget. Algorithm-driven route planning and optimization solutions can cut down operational costs and improve the company’s bottom line. Automated route planning and optimization solutions help reduce miles traveled, empty miles, vehicle costs, and fuel consumption. Hence, the overall delivery costs are reduced.
In logistics operations, deliveries need to be tracked regularly by making necessary route adjustments to achieve maximum efficiency. By comparing key performance indicators (KPIs) like on-time delivery percentages, successful deliveries, no. of deliveries, customer review rating, idling time, and drop-offs per pickup (via built-in reporting tools), companies easily identify areas for improvement to augment delivery executives’ productivity.
With such functionalities, companies can track the activities of their drivers, which makes drivers more responsible and work-centric. Moreover, new-age delivery tools optimize fleet capacity scientifically. As a result, riders get loaded evenly and complete their delivery scheduled within set time frames.
Meeting the SLA standards is an important prerequisite. Automated route planning and optimization solutions’ algorithms analyze variable parameters in relation to their impact on SLA commitments.
Meeting the delivery windows is a significant parameter affecting service providers’ abilities to organize resources in the desired manner. Also, changing customer demands might require an alteration to the SLAs. Automated route planning and optimization platforms allow for swift and secure inclusion of any changes into the parameters.
Hence, when it comes to the best results, it is not about route planning vs route optimization but route planning and route optimization.
In today’s competitive era, mere cost-effectiveness cannot win the business battle. Customer satisfaction is the key driver that each company wishes to achieve. Automated route planning and optimization tools significantly cut down on delivery times and make a quick delivery possible.
This software not only helps achieve SLA standards but keeps all stakeholders in the loop. As a result, real-time parcel tracking, reduction in incorrect or failed deliveries, and ease to accommodate customers’ last-minute requests – all these factors enhance customer experiences and let the company win customer loyalty.
Manual route planning generally overlooks the volume load of reverse logistics. Returned products need to be picked up from the customer’s doorstep and shipped back to the manufacturer.
Reverse logistics adds time and load burden on the carrier. Automated route planning and optimization software takes loads of reverse logistics and failed deliveries into consideration while generating the route and volume allotment to a rider.
Hence, when it comes to business aspects of routing, optimization takes the lead in a route planning vs route optimization scenario.
Automated tools for route planning and optimization are quick and efficient in creating delivery routes. They automatically take care of multi-stop deliveries by analyzing all delivery locations, driver load, fleet capacity, delivery window time, and route feasibility. This reduces the cost involved by limiting unnecessary trips by multiple drivers along the same route.
Smart route planning software have in-built AI and ML modules that allow the ability to self-learn the ‘right’ delivery address. This is accomplished by analyzing the failures and successes of deliveries to the same address in the past. Once a successful delivery to an address is saved into the system, it is used internally for the next delivery to optimize last mile connectivity.
By accurately mapping customer addresses, businesses can significantly reduce logistics costs with increased efficiency and fewer miles traveled per delivery.
This brings us to the question – While route planning and route optimization are often used interchangeably. But are they really the one and the same thing, or there exists some difference between them?
Although route planning and route optimization sound similar, they are two distinct concepts. Route planning, route sequencing, and route mapping are three phrases that mean the same. In route planning, the system depends on a predetermined order list and places the relevant destinations in a format that promotes efficiency and economy.
Although route planning may be a useful technique for some companies, it does not account for the complexities of more dynamic routes and events that can impact a driver’s day, like fog, on-road accident blockages, etc.
On the other side, route optimization allows companies to optimize their logistics functions by augmenting their routing operation in near real-time. From a business perspective, route optimization allows a company to add strategic parameters to its route planning process.
Moreover, with route optimization, companies can successfully control end-to-end operations leading to a gratifying customer experience. Companies get leverage by setting parameters about everything crucial, including vehicle weight limits, drive time, and shift patterns – factors that create hindrances in optimization. They smoothly manage the speed of delivery by achieving overall efficiency.
The new age cloud-based field service software offers a robust solution that replaces hours of manual work and unnecessary route tracking. Some of the key differences between route planning and route optimization are as follows:
There are multiple ways automated route planning and optimization can empower retailers, on-demand delivery providers, and logistics service providers to shrink delivery costs, especially in the last mile. Let’s have a look and explore the advantages in more detail.
For an enterprise, more deliveries convert into more business. However, over-booking can cause your drivers to burn out. This might end up creating hindrances such as longer delivery times, inaccurate delivery windows, or incorrect order delivery.
Route optimization software algorithms take geolocation and volume of deliveries into account while allocating routes to any driver. This significantly reduces stress on drives and optimizes their delivery potential.
Fleet managers save costs by deploying the correct number of riders, and each rider ends up making higher successful deliveries. Also, during seasonal surges, route optimization software helps alert delivery managers about the need for extra riders to fulfill deliveries. Reducing Distance Traveled
With route optimization software, every delivery order to the specific fleet vehicle is made after working out the efficient delivery sequence focusing on the shortest possible route. This brings down the cost of transportation, as it means fewer miles spent on the road and less time is taken.
Smart route optimization solutions inherently account for traffic considerations. Based on historical data and current updates, traffic is estimated for all locations within the city and route direction. This helps reduce delays on account of traffic congestion.
Customers are increasingly demanding deliveries within shorter time windows and accurate ETAs. On the other hand, the bottom line of businesses is constantly threatened by unpredictable fuel prices, rider shortages, and increased competition.
With manual route planning applications, errors, delays, and incorrect deliveries are frequent due to inherent inefficiency. This causes customers to think twice before ordering again from the same service provider. This could prove to be detrimental to the company’s interests in the long run.
But, with smart route optimization software, all such constraints are taken care of. Addresses are converted into geolocation to aid navigation. Loads are distributed according to loads and route plans. This reduces any chances of miscalculation to almost zero.
Businesses must deal with many complex situations while planning their deliveries or transport operations. For example, a logistics or delivery enterprise must take into account inventories, work orders, vehicle capacity, fuel usage, loading time, and delivery time windows.
Scheduling logistics operations by taking the factors mentioned above takes up valuable time, especially in a manual setup. This leads to increased downtime of vehicles and wasting of rider work hours.
With intelligent route optimization software, the job of a logistics provider becomes much easier. The smart solutions accept multiple parameters and allocate vehicles and route plans for deliveries in real-time. This is done in an optimal manner, thereby reducing delays and wastage of resources.
The significance of on-demand delivery gets lost the moment businesses fail to deliver the correct packages on time. Wrong addresses, incorrect packages, and riders arriving outside the delivery window are a few of the potential sources of irritants for companies while fulfilling deliveries.
Several logistic managers face re-dispatch problems as they receive the wrong parcels at their delivery locations. Delivery managers have to reschedule delivery attempts if a rider misses the customer’s preferred time slot. These force businesses to bear extra costs and risk customer happiness. delivery windows. Ultimately, the efficiency of delivery operations takes a hit.
The AI-based route planning and optimization solutions are intuitive in nature, i.e. they automatically convert delivery addresses into geo-locations. This feature enables exact coordinates and correct routing.
As a result, riders make accurate deliveries in all prevailing conditions. Many businesses find streamlined and unified AI/ML insights easy to comprehend. This helps them to maximize the utilization of route planning and optimization software to reduce delivery time and exceed customers’ demand for fast order fulfillment.
Now boost your customer experience with exceptional route planning and robust route optimization with Shipsy. Our innovative delivery solutions offer seamless integration with logistic systems to optimize vehicle capacity management. Our platform helps enterprises intelligently plan delivery routes to make last-mile operations feasible.
Shipsy’s AI-powered logistics platform comes with in-built algorithms that analyze, evaluate, and allocate consignments to the right vehicle, optimize the efficiency of assets and carriers along with offering automated alerts and real-time tracking links to the end customer.
With Shipsy on your side, you will experience increased transparency in your delivery operations, better efficiency by delivering more in a single trip, and get added competitive edge with a host of more advantages, such as:
For more information on Shipsy’s route optimization solution, please contact our experts and schedule a demo today!
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