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What is Route Planning?

If you are a business or organization that has delivery drivers or delivers goods or services to many clients, then this applies to you. Couriers, food delivery services, field service business, florists, and many more have the same route planning problem: how to most efficiently plan, create a map and optimize routes to save time for you and your clients.

This article is for businesses or organizations that create optimized route planning to coordinate multiple addresses and routes to many locations. This article goes beyond well known driving directions tools such as for example Google maps, tomtom or the aa route planner. These are excellent tools to make a map and are beneficial to many. In this article, we will go more into depth and cover the specific needs that go beyond these “broad” websites.

The process of mapping the quickest and most efficient routes is not as straightforward as it appears, and the truth is that most people are losing time and money because of inefficiencies in this process. In this article, we will cover definitions, what are the key pitfalls, what are the best practices, the benefits to guide you in your work better. We have also included some information from industry leader “Supply Chain Management Review” (SCMR) later in the article, so you don’t want to miss that.

Basics about Route Planning

A Simple Definition

Here is a definition from the website Business Dictionary: “Computing the most cost-effective route involving several nodes or stopovers by minimizing the distance traveled and/or time taken”.

This is a bit of a technical definition. To put in a simpler way:

Route planning is about how to create driving directions or routes for multiple locations in the most efficient way.

Route Planning Definition

What is Route Optimization? What is Route Management?

Before going further, there are many terms to describe the process of “route planning,” you may have seen the following wordings:

  • Route planning and schedule
  • Route optimization
  • Route management or route making
  • A trip planner, planner journey, or trip planners
  • Fleet management, vehicles or of several fleets
  • Vehicle management or driver management

All these terms are related. We don’t want to go into the details right now, because they all point to a similar place (e.g., creating the best driving directions (or routes) to multiple locations, addresses or stops). Route optimization is a part of the route planning process because it’s about optimizing the routes in terms of speed and efficiency. Routes or vehicle management could encompass a more comprehensive array of issues, including maintenance and so on.

So, in summary, some of these terms might be synonyms, but sometimes they point to specific processes. In this article, we will use “route planning” to describe the overall processes that take place when we are planning routes from a logistics perspective, and we will use that term broadly to encompass some of the above terms.

You may also like to read this:

What is Fleet Management?

How Do You Plan a Route?

Generally, there are three important components to plan a route. Here are three components:

  1. The elements or we can say ingredients
  2. A process (route planner)
  3. Results

Let’s have a closer look:

What are the elements needed to create routes?

To break it down in a straightforward manner, what you need to create routes are the following:

  • A business or organization that wants to serve clients or customers
  • Client names, and contact info (email address, phone number, etc.)
  • Addresses or stops to make
  • Drivers/people delivering a service
  • A specific route option to follow
  • A route planner

When we say “route planner”, this takes a variety of forms. For some, it’s pen and paper, others use excel, and some use an app or software – we’ll get into these details later.

What do you want to achieve? What are the desired outcomes?

At the end of the day, whether you are a courier, a business doing deliveries or service business (like landscaping or pest control), at the end of the day, all of us want the same following results:

  • Save money
  • Save time
  • Customer satisfaction

How to get results

To get the best results, one would need to use a route planner app or software (see below on those). A route planner app will allow:

  • Inputs: to quickly add addresses or stops
  • Map: A map of the route plan
  • Outputs: to create optimized routes that reduce time and cuts fuel cost

An easy way to think about it is that you have clients and addresses, and what you want is to plan a route (or routes) of the multiple locations to reach them as quickly as possible to ensure great customer service.

Why is Route Planning Important?

To put simply: profits and business growth. This process is vital for any company with logistics needs, deliveries, delivery routes, or businesses that have schedules or field services. In this section, we’ll cover a few of the factors to consider and the important reasons to have proper route planning systems.

The Threats / Opportunities

The consulting company PwC has recently released a report (click here to access the link) outlining some of the current trends that businesses need to take into consideration going forward. Below is a summary of some elements from this report and broader trends as well. These are threats or a risk if ignored, and opportunities if embraced.

The Amazon Effect: B2C direct to consumer deliveries

The first big trend we are seeing is the “Amazon Effect,” whereby we are seeing more and more businesses do “direct to consumer” models of delivery. The broad trend is moving away from “brick and mortar” stores, and towards an online, direct-to-consumer route.

Technology Disruption and Mobile Apps

Steve Jobs released the first iPhone in 2008. The arrival of this device ushered the golden age of smartphones, transforming the world as we know it. Most of us now use a mobile app for many of our needs. Our phones are powerful computers that allow us to improve our lives, and businesses will need to deepen their use of a mobile app or digital solutions to succeed.

Customer Expectations

Given these trends, customer expectations have shifted. They expect faster shipments. They expect more flexibility. They also want more transparency, and they expect lower prices. These are significant challenges, of course, for any business. Some examples are that customers want a notification to their email address, or even the cost options laid out more obviously, or even a map of the plan route.

The High Cost of Last-Mile Delivery

This article in the Business Insider outlines research and data on the extremely high cost of what is called “Last-mile delivery” shipping. Business Insider reports that 53% of all shipping costs fall within the last mile. Let me repeat that: 53%! This includes many costs in the routes including toll roads, or border crossings or non-optimized driving directions (or routes).

High Cost of Last Mile Delivery

The complexity of Data and Variables

Route planning is more and more complex as there are more and more variables to consider. Factors include

  • Managing routes and route options such as border crossings between countries, toll roads, and toll costs;
  • Including how to measure traffic, e.g. traffic information and traffic conditions;
  • Gps information and specific information for each car type;
  • Incorporating algorithms, scientific research, and best practices;
  • Scheduling/workflow of drivers or employees;
  • Streamlined navigation;
  • Types of roads like highways or motorways;
  • Country borders;
  • Data collection, analysis and streamlining, creating a data map;
  • Email address management and customer relations;
  • Route calculations and route option specifics for different industries;
  • Avoiding route errors;
  • Mileage allowance;
  • Proof of delivery and payments;
  • and many more.

These are but a few of the considerations. There are others like weather. These outline the current threats that face any company or organization that has an essential logistics/route management component.

The Traveling Salesman Problem

The Traveling Salesman Problem (or TSP for short) illustrates the difficulty of optimization in routes. It is a classic problem in computer science. What it points to is the difficulty in accurately predicting the best routes.

Bruteforce
Source: https://en.wikipedia.org/wiki/File:Bruteforce.gif

What is the Travelling Salesman Problem

In short, the classic TSP talks about a salesperson who goes between N cities. For the salesperson, all that they care about is to visit each stop once. The order for them is not important, but rather the following factors: a) transportation methods (called node); b) costs, c) time, d) distance.

This problem has been intriguing to mathematicians and computer scientists for many years. It has many applications in science and engineering, for instance, in manufacturing.

Why is this a problem? The answer will surprise you..

The short answer is that there is a staggering amount of possibilities of routes. If you only have 2 addresses or stops, the possible combinations of routes is only 2 (Stop A and Stop B). or 1-{a,b} 2- {b,a}

If you have 3 addresses or stops, then you have 6 combinations of routes: 1-{a,b,c} 2- {a,c,b} 3- {b,a,c} 4- {b,c,a} 5-{c,a,b} 6-{c,b,a}

However, when you go up to 10 addresses or stops, you get a staggering 3,628,800 combinations of routes!

And what if we add just one more stop? To 11 addresses or stops? That number goes up to 39916800 combinations of routes! Literally millions of combinations!

Example of Route

Note: If you have more than 50 stops and want to know how many route combinations you have with examples, then you can refer to this link: https://www.mathsisfun.com/combinatorics/combinations-permutations-calculator.html

In short, it is NOT humanly possible to optimize the best route. This fact is why computer scientists have studied and created software to answer this problem.

If you want to see for yourself, here is a combination/permutation calculator.

How to Better Solve the TSPP

The critical point is that there is the theory, and there is the practice of solving this problem. When we talk about plotting addresses, making stops, for a delivery business, for instance. The other part of the problem

For more information on the TSP, here is the Wikipedia link

What are the Benefits?

Taking into consideration the above factors, now we will go to answering the question of why it’s essential to do proper planning of routes. Here are some of the benefits cited in an article from the Industry expert “Supply Chain Management Review” (SCMR). Below is a summary of that article

Cut Transportation Costs:

Any business that has higher transportation costs will be at a disadvantage. Their fuel costs will be higher (very high in some parts of the world). There multiple destinations and many addresses or stops will add up in the end. They suggest using route optimization solutions to do efficient and effective planning. These solutions will also help reduce wear and tear and save on maintenance costs.

Improvement in Customer Service

As highlighted in the previous section, customer expectations are rising. SCMR reiterates this point by saying that customer satisfaction will lead to a positive experience, which in turn leads to customer retention. SCMR mentions that 96% of consumers would continue with the same service if they had a positive delivery experience.

Specifically, this means faster deliveries, speedy response time. All these results lead to increased productivity and also better experience for the customer. As mentioned, a good tool will capture the email address of the users, and notifications can be sent to that email address as the delivery gets fulfilled.

Increase in Productivity

Every business always has more tasks than they can handle. More productivity is invariably desirable. The route planner nowadays has more addresses and stops than ever. Many companies need to make 20, 50, 100, or more steps a day. For this, Google Maps is limited in its features. Although it is great to have a map from this tool, you also want a map that is optimized. So depending on the business owner, a more robust route planner solution may be required.

What is the Best Route Planner to Use?

The short answer is that there are multiple ways to plan a route. It depends on who you are and what your needs are. Most of our readers will be in the United States or Europe, but what follows applies to anyone.

What we will say is that if you are someone whose business or organization has a strong logistics/delivery component, then you may want to consider using more advanced software for your needs.

Let’s start by breaking down the methods that some people use right now.

  1. Pen and paper
  2. Excel
  3. Simple or one-time route planner (Google maps, mapquest, aa route)
  4. Route planner app or software
  5. Enterprise-Grade Route planner app or software

Best Route Planner to Use

Pen and paper

The pen and the paper have been around for years, so it’s no wonder that so many of us still turn to it. When you use pen and paper to plan routes, this takes a significant amount of time to analyze, prepare, and share the routes to your drivers. From a business or organization standpoint, we do not recommend using pen and paper, especially if you have more than a handful of deliveries a day. The big thing too is that you don’t have a visual map to see.

Pros
  • Simple
  • Easy
  • Inexpensive to use
  • Good for 2-3 stops
  • Good for 1 person
Cons
  • Large financial risk (if used for business planning)
  • Ineffective / Time consuming for more than 2-3 stops
  • Easily lost
  • Ineffective for teams
  • No navigation built-in

Excel (Spreadsheet)

Excel is a fantastic software that many businesses have used for decades now to solve a plethora of problems. Many companies have some internal software such as CRMs from which they will download some addresses, and they use a print out of a sheet to give as a route plan. However, Excel does require a lot of manual manipulation. Efficient route planning and optimization do not happen in excel. You also don’t have a visual map. This makes it hard to find the location of the next stop, of course.

Pros
  • Fairly simple
  • Inexpensive to use
  • Good for 3-10 stops
  • Good for 1 person
  • Better than Pen and Paper
Cons
  • Large financial risk (if used for business planning)
  • Ineffective / Time-consuming process
  • Data or print out can be lost
  • Ineffective for teams
  • No navigation built-in

Google Maps (or similar)

Most people who think about route planning will immediately turn to well known and established driving directions tools such as google maps, mapquest. These tools are useful and certainly work for limited purposes as they do not do route optimization. They give you a direct or straightforward route from between two points, and that’s all. Google Maps can work, yet if you do any volume of deliveries, it not recommended to use Google Maps as it will cost your money in lost time, added fuel cost, added toll costs, and more. You can of course still get a map, a route summary, and the driving directions (or routes) to multiple locations. What is great is the satellite or hybrid view. If you are just starting, it could be an idea to start by trying Google Maps or a similar service to get familiar with the process while assessing other route planners on the market. (see below)

Pros
  • Fairly simple
  • Inexpensive to use
  • Good for 3-10 stops
  • Good for 1 person
  • Better than Pen and Paper
Cons
  • Large financial risk (if used for business planning)
  • Ineffective / Time-consuming process
  • Data or print out can be lost
  • Ineffective for teams
  • No navigation built-in
  • No route optimization (only Point A to Point B)

Route Planner App / Software

The above options can useful if you are doing route planning for your personal needs or if you have a tiny business (like 2 to 7 or 8 addresses/stops a day). For many, these options won’t suffice, and more features are needed. Aside from the number of addresses, using a mobile app or software is recommended for users who have more than one vehicle or driver, or if you want to collect data, or if you want to increase the quality of the service to customers.

There are many Route Planner Apps on the market today that offer excellent solutions, and as a user, it will be up to you to explore the features that fit your needs the best. These apps are available on Apple (iPad or iPhone) Android, PC, whichever platform is best for you. Ideally, they have a smartphone component as well. Most apps have a free trial you can try. Great apps will provide routes, route summary or overview, itineraries/driving directions, routes, route option that may apply to you, addresses, map options, multiple languages, and all the rest of the optimization features. Of course, one thing you want as a business is a way to capture the email address during the subscription process, and the software will help you do this on your website, or otherwise.

Pros
  • Effective / Time-Saving
  • Data is recorded and saved automatically
  • Effective for teams
  • Built-in navigation
  • Optimal routes with many components
  • Suitable for small to medium-sized teams
  • Good for 10-1000 stops
Cons
  • Invest time to learn how to use
  • Cost to use (price may vary)
  • Not suitable for integrated enterprise-grade system

Enterprise-Grade App / Software

Next, if you are a larger company (1000+ employees), or if you do fleet management you will want to consider a sizeable enterprise-grade app or software. These software solutions allow more integration with operations that occur before or after the route planning. For instance, incorporation of customer relations management (CRM) tools, purchasing and accounting software, customer notification services, fulfillment services, workload management, vehicle maintenance software, etc. We recommend this software when you have achieved a specific size and where optimization needs to occur at a much higher level.

Pros
  • Effective / Time-Saving
  • Data is recorded and saved automatically
  • Effective for teams
  • Built-in navigation
  • Optimal routes with many components
  • Good for unlimited stops
  • Suitable for large teams
  • Suitable for large teams
Cons
  • Lots of time and money to set up
  • High cost to use

What Types of Companies Should use Route Optimization Software?

Types of Companies Should use Route Optimization Software

The short answer is that we recommend the use of an app or software to all companies involved in the delivery of services or goods which have more than nine stops or locations. The types of companies include the following:

  • Small Couriers: Whether you’re an independent courier or a franchise owner of UPS or FedEx, the software is crucial for your success.
  • Food or meal delivery: Demand in this market is snowballing, notably in grocery deliveries, restaurant deliveries, or delivery of home-cooked meals.
  • Retail stores: Clothing stores, jewelers, artisans are now competing in a world of technology and higher customer demands.
  • Installation and Maintenance: To ensure the technicians and the equipment get to the right customers at the right time.
  • Health Care and Pharmaceutical: Getting to patients efficiently or delivery of medication.
  • Pest Control Or Waste Collection: Increase the efficiency of delivery and reach more clients.
  • Laundry / Cleaning: Plan routes efficiently and communicates schedules for cleaning professionals.
  • Field Sales: Manage the complexity of sales planning and client management.
  • E-commerce: If you have a store that sells many products, and you deliver to customers or would like to start adding value to your company by including delivery.

As you can see, the list is extensive and involves a lot more businesses or types of users than what one would previously have imagined.

FAQ

What are all the steps involved in Route Planning?

The steps involved are relatively straightforward:

Step 1: Addresses: Gather the addresses of all locations or stops you need to make.

Step 2: Additional requirements: For instance, if you’re making a delivery, you will want to know where to leave the product.

Step 3: Plan and Optimize: At this stage, you will want to use a route planner to calculate the best route for you. A good route planner will take into account all the essential details (restrictions, ferries, routing optimizing, and so on).

Step 4: Execute! Now you’re ready to go!


How to choose the best route?

Choosing the best route is complicated because it depends on many factors: traffic information, traffic jams, route options, tolls, reduction of fuel costs (or fuel efficiency), road, and other costly options. If you in a delivery business, you will likely want to use an app or software that gives you route optimization capabilities. Most free services only give you a route from Point A to Point B; therefore, if you do not use route optimization, you stand to lose time and money from lost efficiency.


What is the Best Route Planning Software?

The short answer is, “it depends.” The longer answer is that you want to choose a route planning software or route optimization software that is at the perfect intersection between a) how much money it will save you and b) how much does the software or app cost. If you have 2 to 5 locations a day, then using free software route planning software is appropriate. If you have more than that, and you have varying feature needs, then a paid route optimization software may be for you. You will want to look for a company that is constantly making updates to its software too. We are looking to make a comparison shortly.

Conclusion

I hope that gives you more background on route planning as it pertains to logistics or delivery planning. We hope this will help you save time, find the best route option for you, get you from location to location in the most efficient manner, review cost options, and ultimately to get you moving forward in your life and business. Once again, these principles apply to the United States, and even to any other location in the world (it’s a small world after all!). If you have any questions, please let us know! Our goal is to provide you with simplicity and a system to get you to high performance!

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