Route Optimization Basics

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If you think route optimization just involves finding the shortest path from one point to another, think again. As logistics operations get more complicated by adding drivers, destinations, and clients, the number of potential data points that can be optimized starts to get into the range of hundreds, if not thousands.

Sound complicated? It doesn’t have to be, and the juice is well worth the squeeze to make sure your route optimization game is on point. After all, what else could help you reduce the mileage your vehicles cover by 20% while simultaneously increasing delivery capacity by 14% as some OptimoRoute clients have reported? 

If that sounds like a no-brainer to you, then you’re right! That’s why route optimization can be such a game-changer for businesses looking to increase operational efficiency and drive more profits to their bottom line.

We’re going to cover route optimization from head to toe today, but if there’s specific knowledge you need, feel free to click one of the section links below to skip ahead:

What Is Route Optimization?

Route optimization, also known as transportation routing or logistics optimization, refers to the process of optimizing a route or set of routes for purposes such as cost reduction, increased driver output, and general operational efficiency. 

At its core, route optimization involves identifying the most efficient means of transporting goods from one place to another, taking into account factors such as distance, traffic patterns, vehicle capacity, customer preferences, and real time information about weather and road conditions. 

Although there are several route optimization techniques that individuals can use on their own to optimize their routes, nowadays it’s typically performed by specialized software programs using algorithms that can quickly analyze a huge amount of data in order to arrive at optimal solutions.

Ultimately, the aim of using a route optimization tool is to provide maximum efficiency within ever-changing parameters so that businesses can deliver better customer experiences, win more clients, and be more profitable. 

What Is Route Optimization in Logistics?

Route optimization, or route planning, is a critical aspect of logistics management. At its essence, route optimization refers to the process of identifying the most efficient and cost-effective routes to use when moving goods from one location to another. 

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There are several key factors that must be considered in order to create an optimized route from a logistics perspective. Here are some of the areas where route optimization can have a huge impact on a logistics operation:

  • Load planning: Account for vehicle load capacity and which loads should be on which vehicles specifically due to particular requirements like refrigeration abilities, loading ramps, etc. 
  • Route planning: Account for driver schedules, traffic congestion, road conditions, time window constraints, and many more variables. 
  • Customer service: Most route optimization software solutions offer real time tracking so that customers can get up-to-the-minute ETA updates. You can also collect feedback after a delivery or service and use that data to optimize your service levels.

By taking all of these factors into account and using a sophisticated route optimization algorithm in the form of specialized software, logistics managers can create routes that minimize costs, reduce delivery times, improve safety and efficiency, and help businesses achieve their broader strategic goals. 

Overall, route optimization is an essential tool for any successful logistics operation.

What Is an Optimized Route?

An optimized route is a term used in transportation planning that refers to the most effective route for traveling from one location to another in terms of distance traveled and cost efficiency, but that’s really just the tip of the iceberg.

If you run a delivery or field service business, you know there are a lot of moving parts. Many of those moving parts can be positively affected by the proper use of route optimization. 

For example, using route optimization techniques, you can account for factors like driver availability, vehicle capacity, and customer requirements like time constraints, and you can plan for all of this well in advance while maintaining the ability to make real time route changes as unexpected challenges arise. 

So, an optimized route drives efficiency in terms of cost, distance, and overall operational effectiveness.

What Are the Benefits of Route Optimization?

There are many benefits to route optimization that makes going through the process a smart choice for businesses of all sizes. 

For one, route optimization helps save time and money by streamlining the way that people get from point A to point B. With optimized routes, drivers can reduce their mileage while maximizing the number of stops they’re able to make. This allows companies to cut costs associated with fuel and vehicle maintenance while driving more revenue at the same time.

Additionally, a route optimization app can make it easier for companies to track and manage drivers more effectively, thereby improving overall productivity and efficiency while allowing for better communication with customers in terms of ETAs.

In a day and age where same-day delivery is rapidly becoming the norm, logistics operators must strongly consider utilizing vehicle route optimization software if they want to keep up with their competition. 

How Is Route Optimization Implemented?

Route optimization is the process of creating efficient and strategic routes for people, assets, and resources, but how can you actually implement that process in your own operation?

The easiest way is to leverage specialized route optimization software that, through a variety of computational methods, automatically takes into account hundreds of data points and key factors to determine the most efficient route for you.

Sure, you could try to manually optimize your routes, but here’s what that would look like:

  • Hours spent studying route history and traffic patterns.
  • Memorizing each driver’s availability and accounting for break times.
  • Coordinating with drivers on the fly to adjust routes based on traffic developments, weather conditions, last minute route additions, and more with back-and-forth phone calls

And that’s just a glimpse of the headaches involved with manual route optimization. On the other hand, route optimization software is built to do all of the heavy lifting for you.

In addition, this software can often be customized in order to accommodate specific needs or requirements of individual businesses since use cases can vary greatly from one operation to the next. 

Implementing a route optimization model into your operation can be relatively simple if you go with the software approach, but be prepared for an uphill climb if you choose to go the way of manual planning.

How Do You Optimize Route Scheduling?

Put simply, route scheduling involves attaching timestamps to each stop on a driver’s route. Done right, route schedule optimization can lead to a more balanced workload for your drivers and give you the ability to boost the productivity of your operation at the same time. The question is, how do you do it right? 

Here are a few ways you can effectively optimize your route schedule:

Plan out your schedule far in advance

The farther in advance you can create your route schedule, the more time you’ll have to notify your drivers and factor in any changes that might occur in the time leading up to their completion. Software solutions like OptimoRoute allow users to plan their route schedules up to five weeks out. 

Balance workloads among drivers

Distribute jobs evenly among your drivers or based on location, skill sets, or even compensation levels to optimize for the lowest cost. 

Analyze historical data

If you don’t have historical route data, it’s time to start collecting it. Many specialized route planning solutions offer built-in analytics to parse through the data and help you find low-hanging fruit that you can use to improve your operation.

Adjust your routes in real time

In the modern day and age, there’s little to no excuse not to have eyes on your fleet at all times. Real time tracking software allows you to have a birds-eye view of your driver’s whereabouts, and you can use this information to make adjustments in the moment as needed to account for things like traffic, weather, breakdowns, or last minute route additions.

Unless you’re a multitasker that enjoys splitting your focus, you may find that juggling all of these factors at once as you schedule your routes is too much to bite off. That’s where software comes in to take processes that could take hours and reduce them to tasks that only require a few minutes of your time.

What Is Route Optimization Software?

Route optimization software leverages advanced algorithms to solve the countless factors that can lead to operational inefficiency. In other words, this software takes complex formulas that you’d probably have to be a math whiz to understand and translates them into user-friendly, intuitive tools that can completely transform your business.

There are a lot of software solutions to choose from, so as you’re comparing, here are some of the key capabilities you’ll want to look for:

  • Automated planning that allows you to import thousands of orders at once and automatically plan the most efficient routes and schedules.
  • Hour tracking for drivers so you can stay on top of labor expenses.
  • Organization planning that enables you to schedule routes based on time window requirements, priority sequencing, duration of stops, vehicle capacity, and more.
  • Real time location monitoring so you can keep track of your drivers as they complete their routes.
  • Proof of delivery so that your drivers can confirm delivery by recording a digital signature or capturing a photo.
  • Advanced planning that lets you plan your routes weeks in advance.
  • Route modification in real time so you can adjust routes based on unexpected issues or last minute changes.

Finally, you’ll want to also consider how the route optimization code of the software you choose integrates with any other solutions you currently use like your CRM, ERP, POS, or FSM.

Take some time to look into the route optimization API, or application programming interface, of the software you’re looking at. This is the method through which one software communicates with another, and whether the software you choose has route optimization API open source or not, it should play well with others.

How AI is used in route optimization

Depending on the specific situation, route optimization can involve thousands of data points that all need to be managed at once. Just imagine: if you have five drivers, ten routes, and 50 stops on each route, there are a lot of variations that can be created just based on travel time, mileage, and driver availability, and those are only a few factors. 

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Once you factor in external varibles like traffic, route particulars, customer requirements, and vehicle capacity, the picture gets even more complicated. Situations like this are where artificial intelligence shines. 

AI can use route optimization algorithms machine learning models to perform advanced calculations that incorporate all of the data points involved in route planning and generate the most efficient outcomes.

When it comes to routing algorithms, machine learning models and rules-based systems are the two main methods of optimization. Machine learning models pair historical data with ongoing learning from new data to continue learning and improving. On the flip side, rules-based or logic-based models are typically based on preset parameters that the software must follow in order to determine the best routes. 

The bottom line is that for complicated processes like route optimization, specialized software is an invaluable tool for producing the most efficient routes that factor in all of the necessary data points. 

What Is the Best Route Optimizer?

The best route optimizer will come down to what your individual needs are. Planning a trip to your friend’s house out of town? A simple mapping tool like Google Maps will likely do the trick. Organizing the logistics for a delivery or field service operation with multiple drivers and routes? You likely stand to gain significant financial benefits from using a specialized route optimization solution.

Knowing what to look for is more than half the battle as you select the right software for you. Here are a few specific feature sets that you might want to look for as you gauge which route optimizer is the best choice for you: 

Stop-specific requirements

Professionals who work in the logistics industry day-to-day know that there are a lot of stop-specific requirements that can factor into the planning process. For example, maybe multiple technicians will be required to resolve a particular service call, or perhaps a delivery will also involve picking up a customer return like a heavy appliance. An effective route optimizer will be able to account for these factors as you plan your routes.

Driver management

The more drivers you add to your roster, the more complicated the planning process can become. Not only do you have to juggle each driver’s schedule, but also their breaks through the day and any particular skills or abilities that you may need to be aware of, such as licensing that allows them to drive transport trucks. If you have more than one driver, you’re probably getting into the realm where route optimization software can make a big difference. 

Real time route modifications

The best-laid plans often still go wrong, and even a well-planned route can be impacted by unexpected challenges like traffic, weather, road issues, vehicle breakdown, driver sickness, etc. If you’re using software that allows you to track and make changes to your routes in real time, you can adapt and solve these problems. 

Implementing a route optimizer in your business can be a game changer. Not only can it increase your revenue by allowing you to complete more stops, but it can decrease expenses by making your entire operation more efficient. 

Are there any free route planners?

Yes, there are free route planners like Google Maps that are available online. Technically, this is a route planner tool since you can lay out a route, but apps like this have some serious limitations compared to specialized route planning software.

For starters, these sorts of planners have relatively low stop limits, so if you need to plan a route with multiple stops, you should be aware of what the caps are. For example, Google Maps only allows up to ten stops which is quite low whether you’re planning a road trip or a delivery route.

Many free planners offer basic route options like avoiding toll roads or highways, and some even offer the option to import multiple destinations into the map planner at once. That said, many of the features we’ve discussed and that you’d want if you’re a business owner or logistics professional simply aren’t available in any free route planners that exist today.

Does Google Maps do route optimization?

Can Google Maps optimize a route? Remember, route optimization is the process of using algorithmic models to determine the most efficient order of stops and account for numerous variables that contribute to whether a route is efficient or not. Google Maps is only capable of determining the best route from one stop to another, not the best path for multiple stops on a route. 

There are some manual ways to attempt route optimization in Google Maps. One method is to list out your destinations in the order you think makes sense, and then re-order them to try different variations and see if that positively impacts the distance traveled or the time it takes to complete the trip. 

This re-ordering option can be time-consuming, but it’s a low-tech way to try and optimize your routes manually using Google Maps. Just keep in mind that it doesn’t address all of the other variables that route optimization software usually takes into account.

So, while Google route optimization through Maps really isn’t an option, there are more features available on this front with the Google Cloud Fleet Routing API.  Launched in April of 2022, this new Google product is an attempt to create a more dedicated solution for fleet operators to plan routes for all of their vehicles.

What is the best free route optimizer?

There are free route planners like Google Maps that more than a billion people use every month, but their optimization features are limited at best. The optimization abilities of Google Maps are pretty much confined to finding the shortest path from one destination to another, but it can’t even be used to find the optimal order of multiple stops. 

Google’s free route optimization abilities are non-existent, but there are more route optimization options in its enterprise level Cloud Fleet Routing (CFR) solution than anything you’ll find in Google Maps. CFR is a paid solution with a pricing model based on complex calculations using transactions and data.

If you’ve identified that a free or paid route optimization software would be useful for your business, you should know that the cost savings that come with optimization often more than cover the outlay cost of the software. Many businesses that integrate route optimization software into their operations quickly see results like higher output capabilities, decreased expenses, and more profits flowing to the bottom line.

If you’re looking for the best route optimization software free of any cost, you might be interested to know that many route optimization software solutions like OptimoRoute also provide free trials. That way you see exactly how it can help your business and the sort of savings it can generate before deciding whether to commit to paying for it on an ongoing basis.

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