What Is Route Optimization in Logistics?

Jump To:

• What Is the Concept of Route Planning?
• What Is Routing and Loading? 
• What Is Routing in Supply Chain? 
• Multi-Depot Vehicle Routing Problem

In a world where anything short of one-day deliveries or same-day service calls seems unacceptable, logistics businesses of all sizes are flocking to route optimization solutions to increase the efficiency of their operations. 

But what is route optimization in logistics? A route optimization algorithm accounts for many factors simultaneously to deliver businesses the most effective solution for their route. That means going beyond simply getting from one stop to another and solving for challenges like driver schedules, time window restraints, special route features, unexpected delays, and much more. 

Route optimization helps logistics transportation companies increase their top and bottom line by increasing operational efficiencies, minimizing expenses, and better serving customers, so it’s well worth incorporating into your business. 

What Is the Concept of Route Planning?

The concept of route planning is simple yet critical for logistics operations. The primary goal of using a real time route planning and route optimization tool is to get the most value out of your fleet of vehicles. 

Professionals working in logistics know that many factors are involved in planning a successful route, like vehicle and driver availability or time window requirements. Juggling all that while also trying to build the most efficient route possible is no easy task. Therefore, many logistics professionals are taking advantage of route optimization tools.   

What Is Routing and Loading?

A well-managed routing and loading process are key components of a successful logistics business. But what do both entail, and how can you optimize them?

Load planning and optimization

The goal of an effective loading process, also called load planning or load optimization, is to make the most efficient use of your delivery assets like trucks, pallets, and containers when allocating shipments. It’s not simply loading as many packages as possible in your vehicles. Pairing goods to be delivered with the right vehicles and equipment is important to get the job done and maximize your fleet’s efficiency. 

Part of this process involves being mindful of each vehicle’s specifications, e.g., size capacity, refrigeration abilities, etc., in tandem with which routes are most suited to each vehicle and driver based on their capabilities and skills.

Route planning and optimization 

Getting the right loads on the right vehicles is only part of the battle. Once you’ve built effective loads, it’s time to plan your routes. This can be time-consuming if you’re doing it manually or using a solution that’s not built for a business of your scale. In that case, you’ll need to be aware of factors like driver availability, vehicle limitations, time window restrictions, traffic and road variables, and of course, which route uses the least fuel and takes the shortest time to complete.

While it is possible to plan a route manually or with a simple mapping tool, the route optimization process is faster and more effective when using an automated route planning solution like OptimoRoute. 

What Is Routing in Supply Chain?

A supply chain encompasses everything from the sourcing and manufacturing of a product to the last mile delivery to the customer. Building a more efficient supply chain involves numerous factors, but routing is one of the most important pieces of the puzzle. 

Maximizing the efficiency of delivery routes eliminates choke points in a supply chain and has a massive impact on the bottom line. Effective route planning helps companies make better use of resources and cuts costs. It also generates more business by empowering companies to serve their customers better, thanks to fewer delays and a more informed tracking process. 

Another critical element in supply chain routing is moving goods or services forwards or backward. Forward movement on the supply chain involves moving raw materials through each step until it reaches the consumer by either delivering the product or performing an on-site service. Backward movement is the process of picking up items for returns or delivering a replacement item and picking up a returned item simultaneously. In other words, the inverse of the forward process. 

Multi-Depot Vehicle Routing Problem

The multi-depot vehicle routing problem (MDVRP) is a serious challenge for many logistics businesses. So far, we’ve primarily discussed the general vehicle routing problem (VRP), which involves planning the best routes for two or more vehicles with multiple stops. 

The MDVRP is more complicated because it involves planning the best routes for your fleet located at multiple depots. This affects route and load planning as you need to determine which facility should receive goods based on proximity to customers and the vehicles at the location. 

The multi-depot vehicle routing problem makes routing in transportation more difficult but not impossible. Modern route optimization software can factor multiple depots into the planning process to deliver the most efficient solution for your circumstances. We have additional articles available if you’d like to learn more about route optimization techniques.