Software considers all possible combinations of scenarios to yield the best solution
With diesel prices above $4 per gallon and average fleet operating costs at more than $1.60 per mile, any opportunity to reduce mileage is worth pursuing. Technology has the ability to consider all possible combinations of options to eliminate miles without losing customers.
One year ago, Red Ball Oxygen Co. began using routing software from Appian Logistics to improve efficiency in delivering its compressed gas products. Some orders are delivered with scheduled “milk runs,” while others are called in by customers a day or two before they expect delivery.
All orders, about 250 per day, are sent to the Appian server in the afternoon. Within minutes, Red Ball Oxygen has its next-day routes planned for all of its 24 locations. The routes consider product types, quantities, delivery time windows and other details.
“It creates a lot of opportunities. The more information you have, the better decisions drivers can make.” – Mike Zupon, Ward Transport director of information technology
With the technology, the company has increased the number of large trucks on local routes and the number of smaller vehicles on more distant routes, a practice that has decreased fuel consumption and maintenance costs. Mileage has decreased by more than 5,000 miles per week, revenues have grown, and net income is up by 12 percent, says Kate Treadwell, chief technology officer.
As with most technology, routing software is becoming more advanced and easier to use. Four specific features are giving fleets a faster return on investment: Usability, real-time compatibility, driver workflow and performance monitoring.
Implementing routing and scheduling technology once required advanced degrees in engineering and computer science. With today’s technology, any user can upload order information, accounting data, customer service requirements and other details into routing software to obtain instant optimized results.
“In all of the data setup and preparation, you are dealing with something that people have familiarity with,” says James Stevenson, vice president of sales for Appian, a division of TMW Systems. “Anybody who can use a spreadsheet can use routing software.”
The more time-consuming and difficult process is to balance cost savings with customer service requirements. The technology might reduce total miles and hours by 10 to 15 percent, but implementing all of those changes at once always is not feasible.
Besides using the technology to find ways to operate more efficiently, the software can help analyze the impact of prospective business and seasonal volumes in terms of cost and service.
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