Reading this headline, a lot of food and beverage distributors are going to be tempted to say: it hasn’t. And that’s understandable. While technology companies have been investing in ways to make parcel, on-demand, and other B2C delivery use cases more efficient, more complex routing problems like those posed in food and beverage distribution haven’t seen nearly the same level of attention or investment. The major technology players in the space have undergone rebrands and changes of ownership, but the software has basically stayed the same.
The upshot is that improvements in dynamic routing have made the B2C retailers of the world more efficient in their deliveries, while distributors and wholesalers have mostly been stuck with static routing. Not just that, they’ve been stuck with slow, cumbersome, and overly complex routing processes that make it difficult to be flexible or efficient.
Sure, most distributors find a way to make it work—they adapt to changing product mixes, price volatility, and last minute requests as best as they can—but processes that should be connected, agile, and intelligent are often slow and disjointed. Instead of finding the most efficient way to get the right goods to the right customers at the right time, most distributors’ technology only enables them to do the same thing day in and day out and hope for different results.
But the technology and processes around routing need to evolve if distributors and wholesalers are going to stay efficient and agile in the modern marketplace.
Why Food and Beverage Routing Has Been Slow to Evolve
Purely dynamic routing doesn’t work for food and beverage distribution. Your biggest customers will have set time windows or positions along their routes that are consistent from week to week—so by using fully dynamic route optimization (which simply finds the most efficient way to route and sequence any given set of stops) you’d be reinventing the wheel every day and creating chaos in the process.
Generally speaking, by the time you’ve taken a dynamically generated route and adjusted it to account for time window preferences, driver affinity, route position requirements, and any other parameters that may apply, you’ve lost out on a huge amount of efficiency. And, given the way many routing systems work, you’ve probably expended a huge chunk of planning time as well.
So, it’s not hard to see why the dynamic route optimization techniques that work for B2C use cases didn’t make it into B2B delivery technology. But here’s the issue: static routing doesn’t work for food and beverage distribution either. Distributors like to say that they’re delivering to the same people every week, but most of the time that’s simply not true. Existing customers will place off-day orders, or they’ll skip ordering for a particular week altogether. New customers will try to get onto your delivery routes, and existing customers may drop off.
In other words, it’s nearly as dynamic as other use cases—it’s just significantly more complex. This has led to numerous false starts to create smarter route optimization technology, but so far most technology solutions haven’t found a way to handle this complex, and large food distributors have been left in the lurch.
How Can AI-Powered Technology Address Routing Challenges?
Routing doesn’t have to be this way. Even static routing—which doesn’t really account for the dynamic nature of your needs—hasn’t evolved as much as it could have. Most legacy technology solutions turn route planning into a complex, time-consuming, and laborious process that the typical business can’t afford to do more than a few times per year at most.
Before we even start to talk about hybridizing static and dynamic route optimization, we should point out that AI can completely change this paradigm. Modern, scalable SaaS-based technology makes it possible to generate routes based on a complex set of parameters in just minutes. With the right solution, you can run a reroute, make an adjustment, or build a new set of routes from scratch without spending weeks on end mired in spreadsheets.
This in and of itself can be transformative. Even if you’re not incorporating a dynamic element into the routing process, this lets you update your routes as often as makes sense for your business. You don’t want to create more chaos by doing it too often, but you can base the decision on when to reroute on your actual needs and the needs of your customers, rather than the long lead times and expensive processes that come with routing.
But when you have the right technology, faster routing is just the beginning. True AI-powered route optimization can also be leveraged for hybrid static-dynamic routing workflows without losing route efficiency or causing chaos on your routes. Here’s how that process might work:
- You create a strategic route plan (covering anything from a week to an entire month) that lets you deliver to your top customers within their preferred time windows, delivery days, and route positions in the most efficient possible way. This will form the basis of your daily route plans.
- After your order cutoff for a particular day of the week, you take any unrouted stops (i.e. those that aren’t part of your optimized static route) and use dynamic routing to slot them in around the existing stops in an efficient way. Your routing platform should still be able to account for the parameters and preferences of these customers—e.g. site-specific requirements or time window requests. Smaller customers might get their second or third choice of time window instead of their first.
- Once the system has produced the day’s routes, you can edit them as needed and the system should automatically resequence in order to maintain efficiency and ensure everyone is still getting their orders at the right time. Here, two things are important: speed and accuracy. The ability to resequence rapidly means that you can do this exercise on the fly, while the ability to accurately predict when trucks will arrive at each stop on the route helps you keep your promises across the board.
- Of course, once the routes are ready to be executed, you want to be able to communicate schedules to customers, track deliveries in real-time, and monitor ETAs for potential exceptions—all of which are much easier when your routing technology can rapidly revise its ETA estimates.
The result is that your routes finally reflect the real dynamism of your business. Instead of using dynamic routing to reinvent the wheel, you use it to refine your plans and speed up your planning and execution processes. The result is happier planners, happier drivers, and happier customers.
What to Look for in Next-Generation Food and Beverage Route Optimization
The big difference between the routing landscape ten years ago and today is that, while the kind of fast, AI-powered hybrid route optimization we’re talking about isn’t commonplace, it does exist. And technology has evolved enough that distributors or all shapes and sizes can transform their routing processes to better reflect the ins and outs of their actual business—the trick is just to find the right technological foundation. To that end, here are a few things to look for in your food and beverage route optimization technology:
- Speed: It should be no surprise from the processes we’ve described above that finding a solution that can work quickly is paramount. You should be able to route thousands of stops in seconds and optimize delivery or sales territories in minutes.
- Integrated territory optimization: Speaking of territories—some of the biggest hurdles that we see among distributors and wholesalers come down to a fundamental disconnect between territory planning and routing. That’s why you need a solution where the two are fully integrated and exist within a single-pane-of-glass.
- Ease-of-use: If you have to bring in specialists or outside consultants to utilize your software, it’s simply too baroque. When you empower your planners with technology that they can use quickly and easily, you can reduce planning leads times, improve the connection between planning and execution, and ultimately save time and resources in the back office.
Right now, it’s all too easy to look at the routing landscape for food and beverage distributors and see a lack of innovation. But with new advances in technology over the past few years, businesses in this area really do have an opportunity to supercharge their routing capabilities and gain new efficiencies in the process—it’s all a matter of finding next-generation technology that truly speaks to your needs.