What Is the Importance of Route Optimization?

The route planning process begins with a comprehensive list of addresses you map out to ensure each destination is reached. Route optimization is when an owner or operator wants to ensure the route is not simply functional but optimal. But what is the importance of route optimization, and how does it help small to mid-sized businesses?

Utilizing a route optimization algorithm helps professionals working in logistics and small business owners build more efficient routes. More efficiency allows businesses to serve their customers better, maximize the abilities of their team, and minimize expenses like fuel and vehicle wear and tear.  

To navigate to the content that interests you the most, click below:

• What Is Route Optimization?
• What Are the Benefits of Route Optimization?

What Is Route Optimization?

Route planning is the process of planning and optimizing routes to get the most value out of your fleet of vehicles. Route optimization is the process of determining the most cost- and time-efficient routes for a business. It is one of the most critical elements of route planning. After all, planning a route might seem like a simple process. However, just one vehicle and ten stops have more than 3.6 million possible routes, which doesn’t include real world factors like stop duration or delivery time windows.

Software solutions offering route optimization are designed to help businesses in industries like deliveries and field service quickly determine what is not just the shortest route but the most effective route for each use case. 

For example, the shortest route with stops at points A, B, and C might be obvious. However, confounding factors like time window requirements, special equipment needs, vehicle availability, or item particulars can quickly complicate the plan. 

Here are some primary challenges routing optimization solves: 

• Improve Customer Service: Increase your customers’ satisfaction with your service, and company overall, by providing clear tracking, SMS messages, email notifications, and real-time ETAs.  Better planning can also help your drivers arrive on time more often and avoid delivery/service call failures.
• Reduce Costs & Increase Revenue per Driver: Manually planning your routes takes hours, but automated planning takes mere minutes.  Every minute saved is another minute your office staff can focus on other priorities.   In the field, maximize your fleet’s efficiency, allowing each driver to complete more stops and increase your revenue.  Optimized routes take into account all costs, from hourly wages to mileage, allowing you to further reduce your expenditures.
• Increase Responsiveness: Dynamic planning allows you to respond quickly to unexpected changes with an instant recalculation of routes.  Last minute customer changes, sick staff, cancellations, and late orders can all be handled with ease and balanced across your fleet, taking into account vehicle capacity, current location, and route.

Route optimization accounts for tens, if not hundreds, of different factors at any given time to help your drivers spend less time driving while increasing their ability to make more stops. Optimizing the route simultaneously reduces fuel costs, improves customer satisfaction, and improves a business’s bottom line. 

What Are the Benefits of Route Planning?

Managing logistics while keeping a million factors in mind is no easy feat. Smart route planning can be a game-changer for operations with outdated or inefficient systems. These are just a few of the most significant benefits of route planning and optimization: 

Superior planning makes for a superior business

Instead of manually sketching out an inefficient route, route planning allows fleet managers to eliminate the guesswork and maximize fuel and time efficiency. It also removes the time wasted by your drivers figuring it out when they’re in the field. These two factors alone can make a night and day difference in a business’s success, but one of the biggest benefits is for the route planner themselves. Using route optimization software frees up your route planner’s time and creates yet another opportunity for efficiency.  

Birds-eye view for better management

It’s difficult or even impossible to fly blind, so why ask managers to oversee a fleet without the intel they need to succeed? Using route planning and optimization software incorporating real time data allows you and your team to respond rapidly to unexpected issues like last minute orders, failed or delayed orders, traffic, etc. 

First-class customer service

The more information you have at your fingertips, the more insights you can share with your customers. Most route planning and optimization software allow you to get up-to-the-minute updates on your drivers, keeping your customers in the loop. You’ll also be able to reassign drivers on the fly to deal with last-minute route additions or obstacles. That means faster service and more satisfied customers.  

If you’d like to learn more about how to plan an optimized route, check out this route optimization example. You’ll easily see the importance of route optimization and why it benefits your business.