Map and plan your way to huge savings

Optimising delivery runs can at times seem a bit like playing three-dimensional chess.

Figuring out the order in which deliveries should be made, the routes drivers should take and the number and size of vans and trucks that should be deployed can puzzle even the most experienced logistician. Throw in a few weight restrictions and the unwillingness of some locations to accept packages and pallet-loads outside certain hours and the net result is likely to be a waste-paper basket full of screwed-up paper and a pencil worn down to little more than a stub.

Fortunately, a number of businesses have developed software packages designed to make the entire task a whole lot easier and to save their customers significant sums of money. Feed in data on what needs to be delivered where and when and the software will slice and dice it and come up with a solution that is cost-effective but which keeps the fleet and its customers satisfied at the same time.

“You may be able to reduce your fleet size by up to 20% along with your total annual mileage,” contends William Salter, managing director of Paragon Software Systems, oe of the the best-known names in the field.

“That can mean saving on drivers’ wages, vehicle leasing and maintenance costs and, most importantly, fuel.

“Since a truck typically generates hundreds of tonnes of CO2 emissions in its lifetime, a routing and scheduling package can also have a direct impact on reducing greenhouse gas emissions.”

Routing software should take into account everything from one-way streets and the traffic congestion likely to be caused by major sporting events to bridge heights and the drivers’ hours rules; and it needs to be constantly updated and refined.

“There is no point in creating a transport plan that does not reflect the real world and utilising a vehicle tracking tool alongside the software can tell you how long it really takes a driver to deliver to or collect from a customer’s site,” Salter says. “Then you refine your planning parameters accordingly. The more accurate your route plans, the more likely you are to achieve savings.”

Cornwall-based Rodda’s represents a good example of how all this can work, and work effectively. It uses a Paragon route optimisation package – Single Depot plus Fleet Controller – to schedule deliveries of clotted cream and milk products to outlets throughout the south west of England.

Every day, the 120-year-old family-run business produces enough clotted cream to outweigh eight rugby teams.

Currently optimising routes for 12 vehicles, when fully implemented the Paragon system will be expanded to embrace 18. As well as deploying it as a day-to-day man-agement tool, Rodda’s will be using it for strategic modelling with the twin aims of cutting costs and improving customer service.

Running on a Windows platform, the Single Depot software holds details of customer addresses, delivery quantities, time windows, vehicle sizes, driver shift details and other transport parameters. Using an algorithm designed specifically for optimising road-based transport operations, the software employs digital mapping to calculate the most effective delivery and collection sequences with accurate journey times, allocating loads to appropriate vehicles and drivers while maximising productivity.

Salter’s views on the importance of using a vehicle tracking tool are clearly endorsed by Rodda’s. Fleet Controller links the in-cab tracking units fitted in its trucks to the Paragon-produced routes, allowing the activities of drivers to be tracked automatically against the planned routes and schedules as they happen.

“This gives transport managers real-time visibility into how the day’s plan is progressing, allowing them to respond quickly to problems or delays that arise,” says Salter.

“It also provides an accurate picture of transport and service performance, enabling fleet managers to spot hidden inefficiencies.”

In a recent development, Fleet Controller can now receive data from onboard CAN bus systems which Paragon says makes it much easier to monitor driving style, especially when it comes to harsh braking and acceleration, excessive idling and other undesirable driving habits.

Another business that has combined tracking – in this case Navman Wireless GPS – with Paragon’s routing and scheduling software is baker Warburton. It uses more than 800 vehicles to deliver 2.2 million bakery products to upwards of 20,000 retail outlets across the UK.

“One benefit is that it gives us immediate feedback on our customer service performance,” says distribution planning manager Jim Norton. “Previously we used manual reporting and had to wait 12 hours to get feedback from our drivers.”

Some companies struggle to reduce their fleet size and annual mileage either because the depots they are delivering from are in the wrong location or because they are delivering goods to clients from the wrong depot.

Paragon’s Fastnet network modelling tool works out how many distribution centres the fleet requires, where they need to be and allocates the right customers to each one.

A properly-organised distribution network can help minimise empty running.

“Empty trucks are a waste of money,” says Salter. “If your drivers can pick up another load on the way back to the depot then your vehicles will be better utilised.

“Paragon’s Integrated Fleets option enables vehicles and drivers at multiple sites to be treated as a single integrated transport resource,” he continues. “That means that movements from different depots can be combined into efficient routes that reduce overall empty running.”

In other words, a truck will not go past one of your sites with either nothing on board or only partly-laden when it could easily pick up a few pallets and transport them in the direction it happens to be heading in anyway.

Such an efficient approach to back-loading increases asset utilisation, improves productivity and can significantly reduce empty mileage.

Sainsbury’s has reduced its empty running by 12% by using Paragon’s software, while groceries distributor AF Blakemore has cut its fleet size by 10%.

Another business that relies on what Paragon has to offer is Noble Foods. Delivering 72m fresh eggs a week to retailers from packing houses in Lincolnshire and Fife, it is using the company’s Integrated Fleets planning solution as its strategic modelling tool with Inrix-based road speed data and Here map content with bridge height information.

Part of Nokia, Here recently convened a meeting of 16 automotive companies and system vendors in Berlin to discuss establishing a standard interface format by which in-vehicle sensor data concerning, for example, traffic congestion and hazardous driving conditions is transmitted to the cloud. Here points out that if such data is transmitted in different formats then the ability of the cloud to aggregate and analyse it is lost.

Paragon is not without its competitors. The list includes Route Monkey, although that company’s chief executive officer Colin Ferguson claims that his company is not actually a Paragon rival.

“They focus on route optimisation and scheduling which is a service that we offer as well,” he says. “What we focus on more, however, is optimisation of all the fleet’s assets, by which I mean people and infrastructure as well as vehicles.

“For that you need a different set of algorithms.

“As well as looking at the size of the current fleet and whether it can be reduced, what we can do is model what it might look like in the future,” he continues. “I’m thinking here about the number of deliveries that could be handled by electric vehicles, or vehicles powered by, say, hydrogen or compressed natural gas.

“That is not to say that Route Monkey is advocating the use of electric vans or has a preference for any particular alternative fuel solution,” he adds. “What we are an advocate of, however, is the right tool for the job and helping fleets reduce their carbon footprint.”

One option that some fleets may wish to look at is the impact of running more 3.5-tonners and fewer heavier vehicles, given the growing shortage of heavy truck drivers.

So what level of operational cost savings can Route Monkey offer? “Anywhere from 5% to 20%, with 10% the average figure,” Ferguson says.

He recognises that Route Monkey can sometimes be asked to work within some demanding parameters.

“You can be looking at a public sector fleet with 100 vehicles where the total could be reduced by 10, but that’s impossible because of the unions,” he says. “Ten fewer vehicles may mean 10 fewer jobs and redundancies as a consequence.

“What we may be able to do, however, is optimised routes, thereby helping the fleet to save fuel.

“One thing we do is offer operators a free benchmarking service. We can take a dataset covering a week or a month, run it through our optimisation algorithm and show what sort of savings could be achieved if things were done in a different way.”

How does Route Monkey deliver what it has to offer?

“In some cases we provide an algorithm in the cloud on a pay-as-you-go, per-vehicle, per-month basis on a minimum 12-month contract,” says Ferguson. “I can see us doing a lot more of that in the future. Typically we’re talking about a cost of from £5 to £20 per vehicle, per month.”

Some clients prefer Route Monkey to sell them the algorithm, however – prices start at  £10,000 – and charge them for maintenance. “Alternatively, we can offer a lease purchase deal which allows them to spread the cost over, say, three years and own it thereafter,” Ferguson says.

A deal with the Clydesdale Bank last December means that Route Monkey now has the funding in place to pursue overseas growth – good news for fleets with activities in more than one country. “We’ll open an operation in Hong Kong by the end of this year; we’ve got plans for Australia too. We’re eager to expand in the Asia-Pacific market – and we’ll be in North America in 2016,” he says.

Ferguson agrees with Salter about the importance of minimising empty running. He is open to the possibility of routing and scheduling companies working together to increase the level of back-loading among all of their customers.

Home delivery and parcels fleets in particular can benefit from routing and scheduling software. Retailer Iceland has been rolling out Route Monkey’s scheduling technology nationwide while trials at Yodel have achieved average fuel and time savings of 19% and 6% respectively so far as its self-employed couriers are concerned, says Ferguson.

The couriers can access Route Monkey by means of a web portal and their deliveries are organised with the lowest-possible cumulative mileage. They can then print out their schedule with a couple of mouse clicks. “Our next step will be to offer a fully-integrated app,” says Ferguson. “This means that each courier will be able to download their personal schedule straight to their smartphone.”

Yodel has more than 60 sites nationwide and delivers more than 135m parcels annually on behalf of leading retailers. It has a peak workforce of 16,000 including employed drivers and agency workers as well as its self-employed subcontractors.

MapMechanics is supplying digital map data to help Tesco.com with the daily scheduling of its 2,000-strong home delivery fleet of vans. Navteq Premium vector street level mapping highlights everything from one-way streets to no left (or right) turns.

To help Tesco.com take into consideration changing traffic speeds and flows at different times of the day when routing its vehicles, MapMechanics has also supplied it with Navteq Traffic Patterns. It’s a data set that contains average traffic speed on individual road segments calculated from past traffic flow measurements and differentiated by time of day and day of the week.

The relationship between Tesco and MapMechanics dates back several years, with the latter originally supplying the former with map data for strategic analysis and planning.

MapMechanics also offers Truckstops routing and scheduling software. However, Tesco.com employs Oracle’s Real-Time Scheduler to plan home deliveries – a £2 billion-plus business for the supermarket giant, points out MapMechanics.

A useful development from MapMechanics is a map of more than 680 sites in the UK where trucks can park overnight. It can be used in conjunction with routing and scheduling software allowing users to plan multi-day journeys that end each day within reach of a suitable lorry park.

A high-profile user of MapMechanics’s services is Eddie Stobart. It is using the firm’s Geoxploit package to help  it tender for work, especially when it comes to costing  each transport movement that might be required by prospective customers.

The difficulty with other systems is that they are too literal in the routes they suggest, says Stobart commercial manager, Scott Robertson. “If we were sending a truck from Sheffield to Manchester, most of them would send it by the shortest route, which is through the Peak District even though we know this would take much longer than going north up the M1 then west along the M62,” he says.

Geoxploit avoids this sort of trap.

Marrying routing and scheduling software to a tracking system from another supplier carries the seeds of potential conflict if one fails to mesh fully with the other.

That, not surprisingly, is the view of Telogis. “Not surprisingly, because it can deliver a package that encompasses the lot,” says OEM marketing manager David Lawrence.

“We do everything on a single platform,” he observes – and average fleet mileage can be reduced by 10%.

Aside from organising deliveries and assisting with longer-term strategic planning, the features Telogis can offer include the ability to monitor the on-the-road behaviour of drivers with an eye to reducing overly-aggressive acceleration and wasteful idling. Both practices increase fuel consumption and the fleet’s carbon footprint.

“Nor do you have to buy a load of new hardware,” says Lawrence. “You can download a free app and manage everything from a smartphone or a tablet. Alternatively, you can run things from a desktop PC.” 

Training employees in the use of this new software does not take long, Lawrence insists. “We’re talking two or three hours if you want to use its most basic functions,” he says.

More training is needed if the fleet wants to use the tool to revisit its strategy. “Training is usually minimal so far as we’re concerned, because we typically go through the benchmarking process,” says Route Monkey’s Ferguson.

Any company proposing to introduce a routing and scheduling package might be wise to tell the workforce what it is planning in advance of the system’s introduction, he suggests, especially if it includes tracking.

If employees can be reassured that the new initiative is being implemented solely to cut costs and improve efficiency, rather than with an eye to making some of them redundant – although in some cases that may of course be the eventual, unfortunate, outcome – then they are more likely to co-operate with managers.

“We encourage a company to try to boost its sales by using the headroom we’ve created for it in order to increase its profitability with the same cost base,” says Ferguson. “That is what the smart companies do.”

Barry Wilkinson, transport logistics manager at Rodda’s, adds: “Some of our drivers were apprehensive, but it doesn’t affect their jobs. It’s just fine-tuning the transport operation.”