- What is logistics?
- What are the four elements of Supply Chain Management?
- What are the benefits of a Transportation Management System?
- What is Route Planning?
Logistics have never been simple, but with the help of special applications supplemented by artificial intelligence (AI) and machine learning (ML), they can become more advanced and optimized. In this article, we will tell you how supply chain management and route planning solutions can be useful for your business.
What is logistics?
Logistics is the process of organizing the transportation and delivery of goods. The main logistical concept is a supply chain, which is the way goods go from the manufacturing company to the buyer.
A well-planned supply chain will get the goods delivered from point A to point B cheaper, and the client will get the delivery faster. What’s more, supply chains are required to be eco-friendly and produce as little waste as possible. Good supply chain management lets you achieve these goals.
What are the four elements of Supply Chain Management?
The supply chain management process consists of four essential elements:
- Supply chain integration. In the framework of supply chain management, integration means that all the participants of the logistical process cooperate with each other to provide the maximum efficiency at minimal costs.
- Operations. Operations are all the actions needed to deliver a good from point A to point B. With the help of supply chain analytics, you can track the effectiveness of each operation and revise the strategies accordingly.
- Purchasing. This stage of the process includes gathering resources and suppliers needed to create the product to be delivered. It is necessary to purchase everything needed in advance in order not to trigger production downtimes or overpay.
- Distribution. Distribution is the process where the goods reach the store shelves or the customer’s door. It’s impossible to control and manage the distribution process without supply chain management software, especially if you are going to deliver goods directly to the client. At this point, you should manage your transportation and deliveries.
What are the benefits of a Transportation Management System?
Here is what transportation management in logistics applications may bring to your business.
- Improve customer relations. The more sophisticated your supply chain, the less time you spend on delivering goods to the customer. This is an obvious plus, especially when customers can be impatient.
- Reduce waste. For many people, your approach to conserving the environment matters. Reasonable delivery chains keep harmful emissions to a minimum, and you avoid risking harm to customer relationships.
- Cut costs. Less unnecessary action always means less cost. Supply chain solutions help you to understand which actions in the delivery chain are the most appropriate.
- Track deliveries in real-time. This information will never be redundant, especially for your customer support service which helps customers track the packages.
- Plan your route efficiently. In order to reduce harmful emissions as well as the cost of resources, it is necessary to plan routes in the most rational way. Find out below what this means and how it is possible.
Read also: 8 benefits of fleet management automation
What is Route Planning?
As the name implies, route planning is the process of thinking through a vehicle’s path from point A to point B. The essence of route planning is to reduce waste and be more efficient.
How Route Planning works
Have you ever planned a road trip yourself? If you have, then you most likely have done everything possible to see the largest number of attractions in the shortest amount of time, to find the most profitable ways to move along your travel route, and also to find the best deals at your stops (for example, finding a budget cafe or asking a local to give you a lift for free).
The route planning system in logistics works exactly the same way. The main goal is to bring as much benefit as possible while spending the least amount of resources.
What is needed for Route Planning?
Here are four factors you need to consider when planning a route.
- Vehicles are the cars that will deliver your cargo.
- Supply chain management jobs are the tasks they need to be implemented per day.
- Constraints are the possible limits, like a car’s capacity or time limitations.
- The cost calculator is a solution that helps you to find out the reasonability of a particular route.
What can affect the route?
There are things that may affect the planned route.
- Capacity. The vehicle can not carry more cargo than its technical indicators allow. First, it is dangerous, and second, overloading the car or truck leads to wear on its parts. Lastly, travel time can increase, which means that the route will not be on schedule.
- Time Windows. Delays in the execution of the route may be associated with the schedules of organizations involved.
- Ordered activities. If a courier must deliver and accept parcels from customers for subsequent shipment (DHL works in this way), then a delay at this stage of receiving a parcel may cause a delay in delivering the next one.
- Maximum route distance. If the company’s protocols establish the max travel time, then the planned route should not exceed this.
- Maximum time in the vehicle. The same goes for the working hours of the driver or courier.
Building route alternatives
Modern route building solutions let us create sophisticated routes even if we have the following variable conditions to deal with:
- We don’t know how many vehicles are involved and where they start
- There are no constraints
- We added capacity to vehicles and workflow for drivers
- We defined the working schedule for the vehicles (besides capacity constraints)
- We determined the capacity and schedule of vehicles, though in reality, some shipments are likely to be left behind.
Read also: How to build Fleet Management software
As you can see, route planning is a complex process. What’s more, it is almost unreal to do it manually without missing something important. That is why there is a need for custom logistical solutions specifically tailored to your business needs. Being powered by AI, ML, and predictive analytics, the solution becomes an even stronger assistant in your business management. Have a quick look at the route management for service coverage solutions we’ve already created, and feel free to ask your questions regarding your transportation system!
Contact us at email@example.com to learn more.