What Is Strategic Route Planning?

Efficient routing is the foundation for good delivery operations. But should that routing be static, dynamic, or a hybrid of the two?For organizations that deliver to the same set of customers week in and week out, setting up recurring stops in a static pattern is the usual practice. For those that deliver to a changing group of customers each day, dynamic routing—tech that can sort each day’s stops into the best route for that day—dynamic routing—works well.

But for many operators—especially food and beverage distributors—the customers may be consistent, but the deliveries are not. A supermarket may need deliveries three times each week, but the delivery days, the items delivered and the amounts can change each time. The restaurant next door may need its deliveries at the same time of day on the same days each week.

For these operators, neither a fixed weekly static plan nor daily dynamic routing is going to be efficient.

The third path is strategic route planning. By implementing strategic route planning, operators can harmonize the many elements that make up a week’s plan: Customers with fixed delivery days and time windows, customers with variable days and—the most challenging—off-day and hot shot orders.

Strategic route planning lays down a blueprint for the week, combining known, fixed stops with anticipated—but not yet finalized—stops. As actual orders come in, software dynamically integrates the non-standard pieces to keep the routes as tight as possible despite variations in stops and order volume. So the core routes remain relatively stable while allowing for dynamic adjustments.

These routes aren’t static in the sense that you run the same exact trucks to the exact same locations at the exact same times each week, they’re static in the sense that the blueprint doesn’t change even as the daily orders do. Of course, that means that your ability to execute the daily routes efficiently is totally dependent on the accuracy of those blueprints. This is why enabling strategic route planning with powerful technology is so important for businesses like food and beverage distributors.

Route Planning vs. Daily Routing

When thinking about route optimization the first thing that comes to mind might be the daily routing exercise that results in the routes that get dispatched to drivers. In theory, the most efficient way to take on these routing problems would be to dynamically route all the stops each day so they’re in a sequence that reduces travel distance and drive time. With the right software, this isn’t too difficult to do.

However, dynamic routing gets a lot harder as you add in parameters beyond time and distance. If your top customer has to receive their order at the same time, in the same stop sequence, and from the same driver every Tuesday and Thursday, shoehorning that stop into an otherwise optimized route will make your route less efficient. The more parameters that are added—the capacity and capabilities of service units, crew efficiency, cost-per-case and more—the faster your route loses efficiency.

That’s why delivery businesses with recurring stops—like food and beverage distributors—don’t use dynamic routing extensively.

Route planning, on the other hand, refers to creating the “static” routes that the daily routing exercises will dynamically build on. These plans cover each day of the week, and potentially multiple weeks, depending on typical order cycles.

At many organizations, these plans aren’t changed very often, in part because they reflect the careful codification of planner knowledge and customer needs. However, in practice, the longer plans remain unchanged, the less efficient they become.

<< Learn how DispatchTrack helped Merit Foods to streamline their food distribution process: read the case study! >>

What Makes Strategic Route Planning “Strategic?”

When we talk about strategic route planning, we’re talking about the week-to-week routing referred to above. Specifically, we mean generating weekly routes that will consistently translate into efficient daily routes.

This is a standard that many delivery routes don’t achieve—even when the users have routing software—for many reasons:

• Product order volumes, order cycles, and off-day orders are a challenge, which makes it hard to figure out which sequences will meet customer needs while remaining efficient. Distributors and other delivery organizations need a way to codify this data and predict likely order volumes before setting route plans.
• Many routing solutions are slow and difficult to use, which means that businesses aren’t able to update their routes often. Routes become less efficient over time: New customers are added and others drop off; major road construction scrambles traffic patterns; the organization picks up product lines that add new customers and volume. If the routes aren’t updated as conditions change they become less efficient.
• It can be difficult to measure cost-per-case, cost-per-delivery, and cost-to-serve for each route each day, making data-driven decisions about daily route plans difficult. 
• Lack of familiarity with other planning methods—especially AI-enabled tech that has the horsepower to quickly integrate thousands of factors and evaluate thousands of potential routes—means that routes that could benefit from updates stay the same because “that’s how things have always been done.”

Overcoming these challenges isn’t just about process improvements; fundamentally, it comes down to technology. When your technology empowers you to be strategic in creating and updating your weekly plans you can turn them into efficient daily routes. This sets you up to delight customers while keeping costs manageable and making the most efficient possible use of your delivery capacity. 

Best Practices for Strategic Route Planning

Done right, strategic route planning puts you in a position to get more out of your last mile deliveries, improving customer service while also reducing costs. How do you make sure you’re doing it right? Here are few best practices:

Implement software that works at scale and at speed

It’s crucial to reroute regularly to keep your routes efficient. Unfortunately, many software solutions make this difficult—with the wrong solution, it can take weeks or months and countless labor hours to generate new routes. The software itself may not be slow, but if it’s cumbersome and difficult to use, the result is the same: Businesses don’t build new routes as often as they should.

When your software can calculate routes rapidly and makes it easy for users to build routes (minutes instead of weeks), that paradigm flips on its head. Businesses can build new routes as often as they need and adjust existing ones with ease. This creates much closer alignment between your weekly plans and your actual daily routing.

Adopt a hybrid approach

You now know why dynamic routing isn’t widely used by businesses like food distributors and beverage wholesalers. But without dynamic routing, it can be incredibly difficult to get the most out of your fleet capacity and also accommodate last minute orders.

The solution is to use a hybrid static-dynamic approach. What does this look like? Once you’ve codified your customer requirements and other parameters, you use dynamic routing that can work within those constraints to generate efficient strategic route plans. Then, for daily routing, you start with these “static” strategic route plans and dynamically route around the fixed stops in the plan. You get the benefits of dynamic routing—increased route efficiency with savings on fuel and labor—while meeting the needs of customers with fixed delivery days and time windows.

Leverage what-if scenarios

One of the ways that powerful route optimization software helps distributors improve their strategic planning is through what-if scenarios. These are models of your distribution plans and network that enable you to predict the likely cost and delivery performance implications of making changes to your plans or network, letting you test new routes before you adopt them.

This requires powerful software with AI and machine learning to make those predictions in minutes. With it, you can test changes on the fly without risking late deliveries or other service interruptions. This gives you a lot of flexibility in terms of finding the plans that will work best for your business and your customers.

Maintain multiple plans in parallel

Predicting order volumes can be difficult, but there are some times of the year that you know will be heavy. If you’re a beer distributor, you know you need to move a lot more product around the Super Bowl, and your plans need to reflect that. If you’re just following your standard weekly route plan but have significant volume increases, you’re going to run into trouble quickly.

With the right software, you can generate different plans to accommodate holidays, events and seasonality and maintain them in a central library. You can then activate the appropriate plan for any given week and do your daily route planning from there, staying agile and flexible as customer needs change over the course of the year  and without sacrificing efficiency.

There will always be challenges around getting the right goods to the right clients at the right time, but outdated and inefficient routes don’t have to be one of them. Using strategic route planning backed by powerful route optimization software you can make routing faster and easier while also increasing route efficiency and delighting customers.