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7 Minute Read

What Is Strategic Route Planning?

When it comes to different kinds of routing, the most common distinction you’re likely to encounter is static vs. dynamic. If you’re a business that delivers mostly to consumers, or delivers to businesses at different locations every week, then this distinction is great—with dynamic routing being the obvious choice. strategic route planning

But if your business makes recurring stops to the same customers week in and week out, then this distinction starts to become unhelpful. Because you’re not really running static routes that don’t change from week to week—just like it wouldn’t make sense for you to run dynamic routes that are completely different each day. Rather, you’re creating a blueprint for deliveries that you’ll fill in with real orders as they emerge on the day or week.

These routes aren’t static in the sense that you actually 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 your daily orders do. Of course, that means that your ability to execute on daily routes in an efficient way is totally dependent on the strength of those blueprints. This is why strategic route planning is so important for businesses like food and beverage distributors. 

Route Planning vs. Daily Routing

When most people think of 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 so they’re in the sequence that reduces travel distance and drive time. With the right software, this isn’t too difficult to do.

Unfortunately, dynamic routing gets a lot harder as you add in more parameters. If your top customer has to receive their order at the same time, the same stop sequence, and from the same driver every Tuesday and Thursday, shoehorning in that stop will make your route less efficient. The more parameters like that you add to the equation, the more quickly your route loses efficiency. 

In a nutshell, that’s why most food and beverage distributors and other delivery businesses with recurring stops don’t leverage dynamic routing extensively. Since their daily routes are based on the underlying blueprints of their weekly plans, dynamic routing doesn’t make sense. 

Route planning, on the other hand, typically refers to the process of creating the “static” routes that the daily routing exercises will draw from. These plans will cover each of the week and potentially periods of multiple weeks depending on typical order cycles. At many organizations, these can be slow to change, in part because they reflect the careful codification of planner knowledge and customer needs. 

What Makes Strategic Route Planning “Strategic?”

When we talk about strategic route planning, we’re talking about the kind of week-to-week routing that we 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 a few different reasons:

  • Product order volumes, cycles, and off-day orders is a challenge, which makes it hard to figure out which sequences will be best positioned to meet customer needs in an efficient way. Distributors and other delivery organizations need a way to codify this data and predict likely order volumes in advance of settling on route plans. 
  • Many routing solutions designed for this use case are slow and difficult to use, which means that businesses aren’t able to update their routes as often as they would like. This means routes that started out strategically positioned to enable efficient daily routing get less and less efficient over time and conditions change and the routes aren’t updated to account for them. 
  • For some businesses, it can be difficult to measure cost-per-case, cost-per-delivery, and cost-to-serve within the context of their routes. This makes it difficult to make data-driven decisions when it comes to daily route plans.  
  • A lack of visibility into alternative planning possibilities—driven by many of the items above—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 or updates—fundamentally, it comes down to technology. When your technology empowers you to be strategic about the way you put your routes together and update them over time, 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—all while reducing costs. How do you make sure you’re doing it right? Here are few best practices:

Opt for software that can work quickly

One of the most crucial ways to improve your route performance is to reroute regularly. Unfortunately, many software solutions make this difficult to do—with the wrong solution, it can take weeks or months and countless person-hours to generate new routes. This isn’t just because the software runs slowly, but because it’s cumbersome and difficult to use. But the result is the same either way: businesses don’t build new routes as often as they should to keep up with a changing market. 

When your software can calculate routes rapidly and makes it easy for users to build routes that meet their needs (think 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 an ease. This creates much closer alignment between your weekly plans and your actual daily routing needs. 

Adopt a hybrid approach

We talked a bit a few paragraphs ago about 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 capacity and accommodate last minute changes. 

The solution here is to take a hybrid static-dynamic approach to routing. What does this look like in practice? Essentially, 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 your “static” route plans and dynamically route around the stops that are already set in stone. The result here is that you get the benefits of dynamic routing (i.e. increased route efficiency and fewer miles driven) without sacrificing the stability and predictability of static routing. 

Leverage what-if scenarios 

One of the ways that the kind of powerful route optimization software we described above can help distributors improve their strategic planning is by offering what-if scenarios. These are essentially 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. Simply put, they offer an environment for testing out new routes before you adopt them. 

Making this happen requires powerful software and usually benefits from the use of AI and machine learning to improve your predictive capabilities. But once you’ve met the technical requirements—including the ability to generate potential routes in just a few minutes—you can test out 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 can be pretty sure they’ll be significantly elevated. If you’re a beer distributor, you know ahead of time that the Super Bowl is going to require you to move a lot more product than usual. And it’s important for your plans to reflect that—if you’re trying to adapt your standard weekly route plan to significant volume increases, you’re going to run into trouble pretty quickly. 

With the right software, you can generate different plans for different periods of the year and maintain them all in a central repository. From there, you can activate the appropriate plan for any given week and do your daily route planning from there. In this way, you can stay agile and flexible as customer needs change over the course of the year. 

There’s always going to be challenges around getting the right goods to the right client accounts at the right time. But outdated and inefficient routes don’t have to number amongst them. With a strategic route planning approach—one that’s backed up by powerful route optimization software—you can make routing faster and easier all while increasing route efficiency and delighting customers. 

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