Inefficient route schedules
Route plans that don't consider various constraints can result in higher fuel and delivery costs, hindering retailers' ability to optimize their operations and maximize profitability.
6 Benefits of Route Optimization Software
By Sanjeeth Cherian, Head of Product, Strategy & Business Operations
May 1, 2024 | 3 Min. Read | Blog
In today's rapidly evolving business environment, where supply chains are a critical operating component of any business, organizations have recognized the necessity of adopting efficient solutions. The goal of any retailer is to ensure that inventory is consistently well-stocked and readily available to customers, both in-store and online.
However, the rising costs of transportation and the disruptions in the supply chain have resulted in significant challenges. To address these challenges, it has become imperative for retailers to establish a resilient supply chain that not only focuses on efficiency but also embraces adaptability and resilience. This commitment to a resilient supply chain is not just a strategic imperative; it is also a response to the evolving demands of consumers who seek greater convenience in their shopping experience.
Businesses are actively investing in expanding their warehousing and distribution capacity, as well as embracing tools and automation within these facilities. However, there is a significant opportunity to further enhance productivity by leveraging technology in the transportation of goods between distribution centers and stores.
Despite the emphasis on punctual delivery and streamlined logistics, many organizations’ route optimization software is lacking the functionality to solve their middle mile transportation challenges.
Why does Route Optimization Software matter?
Challenges in route optimization are multifaceted and require various considerations such as network design and transformation, resource and capacity planning as well as route and load plans. In addition, businesses must simultaneously plan for routes with multi-stop deliveries, which adds complexity to the problem, but also ensures that trailers are being fully utilized. Various constraints also need to be part of the larger equation to overcome things like complex road networks, unpredictable traffic conditions, and dynamic delivery schedules all of which can pose significant hurdles resulting in:
Common transportation challenges
Underutilized trailer
Inefficient trailer utilization can lead to unnecessary empty miles, which not only increases transportation expenses but also contributes to environmental impact and inefficient resource use.
Untimely deliveries
Not having the right tools to optimize your trailer plan can result in untimely deliveries causing dissatisfaction among stores and customers, leading to lower brand loyalty and loss of revenue.
Neglect of cold chain compliance
Cold chain compliance oversight may compromise the quality of perishable goods during transit, risking product quality that could impact customer safety and brand reputation.
Balancing these variables to create optimal routes requires sophisticated algorithms that can adapt in real-time.
How does Route Optimization by Walmart Commerce Technologies work?
Route Optimization, a middle mile trucking solution powered by Walmart Commerce Technologies, uses artificial intelligence (AI) to determine the most efficient route between multiple destinations and provides the most efficient trailer plan. This solution is used in Walmart’s trucking logistics operations and was awarded the Franz Edelman Award last year.
The software analyzes factors such as delivery time windows, fuel consumption, empty miles, vehicle capacity, distance, speed limits and more. Using advanced AI-based algorithms, the route optimization mapping process determines the most efficient route.
A Big Opportunity – Cutting Costs & Increasing ROI
Delivering an extensive range of products, spanning from pet supplies to frozen goods and outdoor gear for our customers next excursion, Walmart has always been committed to helping customers save money and live better. Leveraging our years of experience in logistics optimization, Walmart Commerce Technologies is now helping our clients’ transport inventory better and operate more efficiently with our route optimization software that Walmart has been using for the past few years. We are taking the guess work out of route planning and trailer optimization so you can focus on your operations and customer satisfaction while overcoming your logistical challenges.
With Route Optimization, Walmart avoided 94 million pounds of CO2 by eliminating over 33 million unnecessary miles and optimizing routes to bypass 108,000 inefficient paths.*
Benefits of Route Optimization
Integrating a transportation route optimization software can make a transformative impact on your business. Here are some of the key benefits you should know:
1. Reduce transportation cost & improve efficiency
Fuel expenses alone can account for up to 30% of operating costs*. However, by leveraging automated route mapping for improved multi-stop deliveries, businesses can increase savings and operational efficiencies by minimizing empty miles which leads to a reduction in fuel consumption and overall operating costs.
2. Improved inventory availability boosting store service
Maintaining stocked shelves not only improves customer satisfaction but also fosters repeat customers. Achieving timely inventory availability relies on efficient route planning, dependable arrival times, and prompt updates within your trucking fleet. These measures ensure the availability of products for both your loyal and new customers to avoid loss of sales and reduce time wasted for the buyer, while increasing overall customer satisfaction.
3. Faster route and trailer plan by AI & ML based software
Automated route planning and mapping creates a final optimized route and trailer plan within minutes, eliminating the need for time-consuming manual intervention, which demands significant time and expertise of the load planner that could lead to a substandard outcome. With Route Optimization the best possible outcome is delivered through advanced algorithms that analyze many variables while optimizing route and trailer plans. By maximizing trailer space and planning the most efficient delivery route businesses can maximize trailer capacity, minimize travel distances, reduce fuel consumption, lower transportation costs, and enhance overall operational efficiency. This zero-touch software ensures faster delivery times and on-time orders.
4. Dynamic & flexible configurations based on changing conditions
Having a configurable and flexible software allows businesses to handle deviations through advanced Exception Management. An example of an exception is “unplanned pallets”, where a user can intervene and override the warnings or distribute the pallet. Also, a user friendly interface is critical for transportation associate engagement and reduces training time for businesses.
5. Auditing & reporting for data-driven business decisions
Harness the power of real-time data and reporting for seamless optimization and quick adjustments. Gain valuable insights with historical data of trailer utilization for efficient logistics oversight and decision making.
6. Reduce carbon footprint
As business owners we have a responsibility to try to be more sustainable. This streamlined strategy can minimize your carbon footprint through the reduction of fuel use and implementation of efficient routes helping you be more sustainable.
Why partner with Walmart Commerce Technologies?
Just like you, we know the challenges of complex supply chain logistics. The tech that powers Route Optimization is the same solution that powers transportation logistics for Walmart - the largest retailer in the world. With operational costs on the rise, route optimization software has proven to be a “need to have” not a “want to have” solution. Great demand brings even greater innovations and Walmart Commerce Technologies is paving the way for a better future for businesses and consumers.
Get a demo of Walmart Commerce Technologies Route Optimization Software today!
(1) American Transportation Research Institute. “An Analysis of the Operational Costs of Trucking: 2023 Update.” June 2023
*Sustainability impacts estimated over fiscal year 2023.
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