Case Study: Why Food and Beverage Distributors Need Hybrid Routing

Inertia can be an incredibly powerful force in any distribution operation. For many food distributors, crafting a new set of route plans that’s carefully tailored to current business conditions (which might change any day) requires so much planning effort, time, and money that it feels like it’s not worth it. There’s also a risk of creating confusion and disruptions if you change things up too much, too frequently. Your customers want consistent service, and it’s hard to offer them that if your plans are unrecognizable from week to week.

Of course, letting your plans stay the same isn’t a good solution either. Yes, you want your top customers to get their orders on the same day and time every week, ideally from the same driver, but rigidly adhering to that concept for all of your customers quickly results in inefficiencies. You might wind up running trucks at half capacity on particular runs, while other truck routes constantly criss-cross one another. All the while, it takes a Herculean effort to make even the smallest change (e.g. to work around an off-day request)—meaning that you’re offering your customers consistency, but not necessarily responding to their changing demands effectively.

In a business where customer service is everything and thin margins are the norm, you’re caught between a rock and a hard place. You need consistency, but also the ability to adapt quickly to changing circumstances: in other words, you need a hybrid approach to route planning. 

The Challenge: Maximizing Customer Service and Minimizing Cost-to-Serve

On one level, the challenge in balancing consistency and adaptability in food distribution planning comes down to choosing the right planning model (and the right logistics software system to back it up). Traditionally, route planning is divided up into two paradigms: 

• Static routing: You pour time and resources into painstakingly crafting a route plan that will meet your current customer needs and work with your current mix of assets, distribution centers, drivers, suppliers, etc. Once your plans are finalized, you use them week in and week out. Unfortunately, as conditions change, your plans can’t be easily adjusted to keep pace. 
• Dynamic routing: The way most people utilize dynamic routing involves creating a new route plan from scratch every day based on incoming orders. When your business involves new orders from new customers every week, this can be a great way to ensure that you’re always getting the most out of your delivery capacity. When your business runs mostly on recurring orders, however, dynamic routing can create chaos. 

Both of these models have their pros and cons—but in food and beverage logistics, purely dynamic planning obviously doesn’t work. If you simply let the route optimization algorithm generate the most efficient routes for all of your stops, you’ll then have to manually massage those routes to build in your customers’ requirements and your own domain knowledge. 

After all, the most efficient route on paper could be one that puts your biggest account right at the end of the day, or causes your drivers to show up during a major client’s lunch rush, such that no one has time to accept the delivery and customer parking spots are taken up by truck idling in the parking lot. 

Static routing approaches obviously don’t create this exact kind of chaos, but we’d argue that they don’t really work either—not in a hypercompetitive marketplace where margins are thin and drivers are in short supply. No one’s customers are consistent enough that the most optimal plan one week will continue to be optimal every following week. In practice, what tends to happen is that your routes go so long without evolving that it’s difficult or impossible to adjust them with confidence. Sure, it might seem like there’s no reason to be sending an entire truck to deliver one case of tomatoes to a restaurant, but you’ve been doing that for so long that no one knows if making an adjustment will backfire.     

The Solution: Hybrid Static and Dynamic Routing 

Static and dynamic routing both pose challenges for food distributors—chaos and unpredictable customer service on the one hand, and ongoing inefficiency and inflexibility on the other. But they also offer benefits: dynamic routing does give you flexibility that can be leveraged into more cost-effective deliveries, while static routes help you offer reliable service to your most important accounts. 

Both of these benefits are crucial to success. Which is why modern food distributors need an approach to route planning that offers them the best of both worlds. 

This is where hybrid routing comes in. 

What is hybrid routing? On the simplest level, it means combining static and dynamic routing techniques within the same planning process. Some stops stay the same week in and week out, while the remaining stops are dynamically optimized around those “anchor” stops. 

On a more complex level, this might involve mapping out different customers into tiers, such that the routing engine can dynamically organize stops based on specified parameters for each customer. For instance, if a middle-tier customer has to get their goods on a Tuesday, but the timing of the delivery isn’t critical, the routing algorithm will sequence that stop accordingly. By the same token, you might codify fallback time windows for particular customers and default to those if you can’t meet the preferred time window. 

The impact here is twofold:

• Increased capacity utilization: when you dynamically route stops for smaller customers around your statically routed anchors, you can actually find the most efficient routes on a daily basis. When order volumes change, last minute orders come through, or new customers come onto the roster, you can accommodate them quickly and easily without going back to the drawing board for the entire plan. 
• Improved agility and flexibility: When you have dynamic routing capabilities in tow—particularly AI-powered capabilities that can generate routes in seconds—you have the ability to model potential changes and run what-if scenarios on the fly. Instead of worrying that the entire plan will come apart at the seams if you make a few changes, you can confidently predict the outcomes of potential planning changes, then implement and execute the best option at the speed of business. 

In other words, you get the best of both worlds: without sacrificing right-time deliveries and strong customer service, you gain the ability to flexibly maximize capacity with dynamic route optimization.  

How Quirch Foods Leveraged AI-Powered Hybrid Routing to Get More out of Their Capacity

The concept of hybrid routing isn’t some lofty hypothetical. It’s something that food distributors around the country are already leveraging to improve their delivery performance. And it’s exactly what Quirch Foods implemented when they partnered with DispatchTrack. 

As one of the largest food distributors in the U.S., LatAm, and the Caribbean, Quirch Foods was seeking to build on its success and grow in a sustainable way. But their existing delivery route scheduling software made that difficult. They knew they needed a technology partner who could help them plan routes that actually reflected their business needs. 

With DispatchTrack, Quirch Foods gained exactly that. Our hybrid routing tools enabled them to codify dispatchers' specialized knowledge to create daily skeleton routes, then dynamically add and adjust stops to those routes as needed—enabling faster, more efficient delivery planning and execution. Now, they were able to dynamically route around their anchor stops in order to get more out of their delivery capacity. 

The result was significant cost savings and a blueprint for better customer service. 

Luis Porto, Director, Operations Development at Quirch Foods, had this to say:

“Since partnering with DispatchTrack, we have been able to implement our static planning tools to codify our dispatchers' specialized knowledge and create daily skeleton routes, then dynamically add and adjust stops to those routes as needed. DispatchTrack's hybrid routing allows us to create more efficient routes in radically less time. And the results were immediate. We boosted our route efficiency, which translated into immediate savings."

Effective food and beverage distribution is no mean feat. You have to provide exceptional service to customers, delivery at the right time, and do it all in an efficient and cost-effective way. By leveraging DispatchTrack’s hybrid routing capabilities, Quirch Foods was able to do all that and more. Our agile, connected, and intelligent solution supports their operations, so they can support both their customers and their bottom line.