The Role of a Data Study in Route Optimization Software Selection
Organizations that rely on multiple vehicles for operations must optimize their routes to maximize efficiency and minimize costs. Multi-vehicle route optimization (MVRO) software can be a powerful tool for achieving these goals. However, selecting the right MVRO software is crucial to ensure its effectiveness. One critical factor often overlooked is conducting a thorough data study. Most enterprise-level software companies will offer a data study as part of their support for your evaluation. It is best to avoid the “free trial” vendors unless you have a very small fleet with simple constraints.
Data-Driven Software Selection: A Strategic Approach
A data-driven approach to MVRO software selection is essential to ensure that the chosen software aligns with an organization's specific needs and objectives. Organizations can decide which software features are most relevant and valuable by carefully analyzing historical data and identifying key performance indicators (KPIs). Select one or two of your leading prospective vendors to perform the data study on your historical trips. Usually, 3-5 days’ worth of data is sufficient for a good analysis.
Understanding Data Requirements
Before embarking on a data study, it is imperative to understand the specific data requirements of the organization. This involves considering factors such as:
Vehicle Types and Characteristics: The software must accommodate various vehicles, including their size, capacity, fuel efficiency, and emissions standards.
Route Complexity: The software should be capable of handling complex routes with multiple stops, time windows, geographic constraints, and dynamic traffic conditions.
Data Availability and Quality: Assessing the availability and quality of existing data is crucial for effective analysis. This includes historical data on vehicle location, driver hours, fuel consumption, delivery times, and customer feedback.
Optimization Goals: Clearly defining the organization's specific optimization goals, such as reducing costs, improving efficiency, or enhancing customer satisfaction, will help guide the data analysis process.
Baseline Calculation: It is critical to define a baseline set of KPIs from the data you provide to your prospective vendor. Total miles driven, hours worked, and service times are crucial to comparing scenarios. Reloads are another vital data point that is often missed.
Data Collection and Analysis
Once data requirements are established, the next step is to collect and analyze relevant data. This may involve:
Historical Data Collection: Gathering historical data from existing operations, such as GPS tracking data, delivery records, driver logs, and customer surveys.
Data Cleaning and Preparation: Ensuring data quality by cleaning, standardizing, and formatting data to facilitate analysis.
Data Analysis Techniques: Review the data you send to the MVRO software vendor with a critical eye. You will learn something important about your delivery operations in nearly every case.
Key Data Considerations
When analyzing results from the data study, make sure you can determine:
Vehicle Utilization: Assessing the efficiency of vehicle usage and identifying idle time.
Route Efficiency: Evaluating the effectiveness of existing routes in terms of distance, time, fuel consumption, and emissions.
Driver Productivity: Analyzing driver performance, workload, and adherence to regulations.
Fuel Consumption: Identifying opportunities to reduce fuel costs and emissions through more efficient routing and driving practices.
Customer Satisfaction: Measuring customer satisfaction with delivery times, service quality, and communication.
Software Evaluation
Armed with a comprehensive data analysis, organizations can evaluate potential MVRO software options based on their specific needs and priorities. Key factors to consider include:
Advanced Routing Algorithms: The software should be able to optimize routes based on various factors, such as distance, time, fuel consumption, emissions, traffic conditions, and time windows.
Real-time Tracking and Visibility: The software should provide real-time visibility into vehicle locations, status, and driver behavior.
Integration Capabilities: The software should seamlessly integrate with existing systems, such as GPS tracking devices, telematics platforms, ERP systems, and other mission-critical systems.
Scalability: The software should accommodate the organization's growth and evolving needs.
Data Analytics and Reporting: The software should offer robust data analytics capabilities to support decision-making and continuous improvement.
Potential Roles for Route Optimization Consultants
Most companies will evaluate their route optimization capabilities every 7-10 years. Knowledge of subtle differences in available technology is not a core competency. Route optimization consultants like SteamHammer Consulting have been a part of hundreds of evaluations and implementations. Consider engaging a route optimization consultant for:
· Requirements Gathering: Narrow the list of potential vendors by having a firm grasp on your actual needs. Most companies base their requirements on what they already have and miss the opportunity to pursue a more robust vision.
· Data Preparation: Companies often need more staff to collect the proper data for an effective study. A route optimization consultant knows what is required and can help organize it.
· Vendor Selection: A consultant will be well-versed in the capabilities of the various vendors in the market. You will save time and money by not considering potential vendors that would never be a fit.
· Adoption of the Solution: Many barriers exist to successfully implementing route optimization software. Route Optimization Consultants will help you navigate these barriers and get the value you expect from the solution.
What to Expect
You will want to see a comparison of your baseline numbers with the results obtained by using the vendor’s application. Do not expect the routes to be entirely correct since the vendor has not had enough time to configure their system for your business. Pay close attention to dispatchers and planners if they review the submitted routes. If they say that a route cannot be run in this way, make them justify their belief. You will learn a great deal from this process.
Don’t be tempted to pit two potential vendors against each other in a “bake-off” to see who produces the best results. There will always be bad actors in the market who will make their results look better by increasing road speeds, decreasing stop times, or otherwise using their settings to put their thumb on the scale.
Conclusion
A data-driven approach to MVRO software selection is essential for organizations seeking to optimize operations, reduce costs, and improve efficiency. Organizations can make informed decisions that will drive significant benefits by understanding data requirements, collecting and analyzing relevant data, and evaluating software options based on specific needs. Enlisting the help of a route optimization consultant will make the process easier and more effective for your bottom line.
