Vehicle Routing Problem : Fully Explained

The Vehicle Routing Problem is fairly common in the last-mile delivery business. Typically, this problem occurs to constraints related to vehicle capacity, optimal route, travel time, and other constraints faced by the planners.

Efficiently solving these issues could ensure quality service and cut down on transportation costs. 

As Covid-19 witnessed a massive spread, delivery businesses began handling more delivery volumes in smaller time windows

With the sudden increase in deliveries, the Vehicle Routing Problem has become even more difficult to solve. In order to help you know better, we are here with the answer to your question like what is Vehicle Routing Problem.

Defining Vehicle Routing Problem

The key focus of the Vehicle Routing Problem is on determining the efficient routes for a fleet of vehicles. But, route optimization not only focuses on reducing operational costs but also on working on other delivery constraints as both are equally important. 

The usual operational constraints in finding an effective solution for a fleet of vehicles includes time window and route length.

Through the Vehicle Routing Problem, fleet managers can conduct effective vehicle route optimization and reduce the cost of last-mile deliveries.

For instance, a delivery company must perform 3000 deliveries every day with 50 cars. What system do they use to distribute deliveries to drivers and schedule visits? They must develop routes that account for numerous delivery restrictions, such as fuel usage, traffic bottlenecks, and time windows among others.

Last-mile delivery operations become difficult and costly when these restrictions are not properly managed. By using the Vehicle Routing Problem, an optimal solution can be acquired for better delivery management and lower delivery time.

How is the Vehicle Routing Problem a Challenge?

Vehicle Routing Problem isn’t about finding the best delivery schedule. Many additional considerations play a role in determining the best paths to take.

The existence of many limitations and the unexpected nature of VRP add to its complexity. Below are some key challenges related to the vehicle routing problem:

1. Manual intervention is becoming more and more reliant

As a logistic organization that relies on manual vehicle routing, you’re sure to suffer from the lagging efficiency of delivery businesses. Even if you have the finest route planners, they are still people and prone to making errors.

When it comes to amplifying the impact of the vehicle routing problem, manual dependencies operate as a catalyst. Manual routing fleet managers are increasingly faced with the issue of meeting client needs, such as short lead times and flexible delivery slots. 

While corporations should automate route planning as a cost-effective alternative, manual route planning is still widely used, increasing the need for manual intervention.

2. There is a lack of real-time tracking

lack of real-time tracking

Poor logistics visibility arises from the inability to track delivery in advance. This leads to poor delivery capabilities and experiences, non-compliance with SLAs, increased logistics risks, and increased cost of travel.

3. Inability to avoid unwanted delays

avoid unwanted delays

Organizations frequently pay the price for needless diversions and unscheduled stoppages taken by cars on the road due to a persistent loss of vision.

Delays are exacerbated by manual dependencies such as route planning, allocation, and scheduling of delivery activities. In order to create optimum routes, we need a sophisticated, automated vehicle routing technology.

Such technology holds the power to prevent any inexplicable delays and unnecessary fuel usage.

4. The delivery turnaround time has been reduced

In the Covid-19 situation, people have become used to being indoors. The same has increased the same-day delivery demand. The service times anticipated by the consumers are also going down significantly.

In the current Covid-19 situation, around 86% of the customers are ready to pay extra for a good customer experience. About 77% of the shoppers are ready to pay extra for the same day or next day delivery.

5. The need to reduce fuel use and carbon emissions

As per a detailed study, Global warming and carbon emissions are actual existential threats. As aggregators of a logistic supply chain, it’s just a matter of time until we have to comply with carbon emission regulations and embrace greener logistical methods. 

Due to the lack of machine learning capabilities, we have not been able to provide an efficient machine environment. Clearly, a manual or traditional vehicle routing approach will be unable to achieve this aim.

Why is an Effective Solution Needed?

The major goal of a good Vehicle Route Planning system is to cut down on logistics-related expenses. The following are some other reasons:

  • With the help of VRP, businesses can achieve long-term success.
  • VPR lowers constraints for transportation and helps decision managers find an efficient route optimization solution. 
  • VPR significantly improves the fleet’s production and efficiency.
  • VPR not only saves time but also improves client happiness, resulting in higher profit margins.

Most Effective Solutions to VRP

VRP can be addressed in three ways. These are

  • Manual solution: that is the most inefficient approach to dealing with VRP. Solving VRP is a nerve-wracking process that even seasoned fleet managers struggle with. But there are a few drawbacks here as well. For instance, manual solutions to VRP are not welcoming of any change. Additionally, they are also very complicated.
  • Preset Solvers: Preset solvers can only solve certain fundamental restrictions. Hence they can’t solve VRP. It is appropriate for academic contexts that demand in-depth study, but it is not appropriate for real-world commercial situations.
  • Route Optimization Solution: Because it takes into account real-world restrictions, the Route Optimization Solution is the most effective method.
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How Can Route Optimization Software Help?

Route optimization is a complicated process that must be tackled with utmost care. Manually dealing with VRP may seem like a good idea, but the complexities and time involved are too daunting.

Therefore, you need a route optimization solution to make your life easier. But before you choose the right route optimization solution, you need to take care of the following:

  • Make sure that the solution that you opt for considers the safety of the deliveries a priority.
  • The solution should also be affordable for you, and it should be scalable.
  • Go for a solution that offers an updated and adaptable set of algorithms.
  • The right route optimization solution must offer multi-stop route planning along with multi-vehicle routing.

What Should You Look for in Route Optimization Software?

Yet, that is not all; you must ensure that you get a route optimization solution that offers:

  • Route planning software that requires minimum human intervention. Such technology should give you automatic route recommendations helping you save a lot of money on gas while reducing the traveling time.
  • Rerouting is required to manage, postpone, and reassign on-demand delivery since new orders are added even within seconds. When additional orders are added, a proficient route planning program automatically reroutes them. This automated rerouting feature aids fleet managers in efficiently processing on-demand requests.
  • Robust allocation capabilities.
  • For fleet route optimization, a precise parcel sorting capability is imminent. It aids fleet managers in allocating orders sensibly depending on their importance.
  • Deliveries may be delayed due to address confusion. Accurate addresses are refined and converted into precise geographic coordinates by competent geocoding. For fleet drivers, this capacity assures on-time deliveries.
  • Real-time tracking must be enabled.
  • A real-time tracking function aids fleet management in analyzing delays that affect delivery ETAs (Estimated Time of Arrival). It allows them to quickly change routes while keeping customers informed.

FAQs

TSP is a single-route node-service-combination problem with no vehicle capacity constraint, whereas VRP is a multiple-route node-service-combination problem with vehicle capacity limitation.

The heuristic method explores the search space in a constrained way and often yields high-quality results in a short amount of time.

All delivery companies want to cut their last-mile delivery expenses as much as possible. Vehicle route optimization software aids in the reduction of a variety of last-mile delivery expenses, such as idle and maintenance costs.

The quality of the delivery service is determined by the efficiency of the drivers. Fleet managers may use vehicle route optimization software to track drivers’ performance and recommend modifications that would improve the customer experience.

We must understand the travel cost and duration between each client and the depot to determine the overall cost of each route. To do this, we change our original network into one in which the vertices represent the customers and depot, and the arcs represent the highways that connect them.

Minimizing the global transportation expenses by taking into account the total distance traveled as well as the fixed costs connected with the vehicles and drivers used is the most important objective of a VRP.

Get the Aid of Route Optimization Software!

We know you want a cost-effective, time-saving, and high-quality solution for your VRP. The good news is you have it in your bag with Upper Route Planner.

Using this software, you can plan and optimize your routes within seconds and save your precious time and money! You can serve 40% more customers in 95% less planning time with Upper Route Planner. 

Sounds exciting, right?

Start your and explore how it helps your business to expand and touch new heights.

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