A driver for McPherson Companies loads product at a company warehouse near Birmingham, Ala. Planning routes for the delivery of liquid bulk and packaged lubricants to customers across the Southeast is an extremely complex process, says Kevin Hodgkins, McPherson’s director of information technology and process improvement. By implementing a route optimization tool, company management plans to nearly automate its route planning, to reduce error and to increase asset utilization by as much as 25 percent, he says.

In trucking, nothing follows plan. At any moment, multiple load opportunities, driver emergencies, equipment breakdowns, weather, market pricing, changes in pickups and deliveries, and numerous other factors require dispatch to make quick but intelligent decisions. For very small carriers, these choices may be simple. But as carriers grow, so do the number of options for adjusting operations.

Humans can process a limited scope of information at one time, so most carriers use various decision support tools ranging from spreadsheets to dispatch software to highly sophisticated “optimization” systems that continuously gather data throughout an enterprise and optimize the balance as variables change.

McPherson Companies Inc., a Birmingham, Ala.-based distributor of industrial lubricants, hopes that such an advanced optimization tool will help it solve daunting routing challenges due to its product line, equipment types and deliveries, both scheduled and “on-demand.” For example, in order to deliver 100 orders in one day, managers at the 100-truck company might have to plan deliveries of 175 line items for vehicles and tank trailers with multiple bulk compartments.

“It is hard for the human head to get around the problem,” says Kevin Hodgkins, McPherson’s director of information technology and process improvement.

Optimization systems provide recommendations for improving operational efficiency, customer service and profits by finding the optimal balance among all variables. But a computer system is only as effective as the willingness and ability of humans to leverage the system’s capabilities. To get the full value from these systems, fleets often must make additional technology investments to ensure drivers and managers actually take advantage of their new tool.

Building profitable routes
For operations that require multiple stops per driver per day, route optimization is one of the most widely used types of optimization tools. By using advanced software to optimize daily routes, fleets such as Skokie, Ill.-based Peapod are able to schedule more orders per truck, reduce mileage and decrease overhead.