Route Optimisation Software Solutions – Meeting the Demands of the Parcel and Postage Sector

Written by Integrated Skills

Apr 18, 2016

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Route Optimisation, Route Planning

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Many companies in the parcel and postage sector across Europe are struggling to meet the vast demands of an industry in flux, with each company facing a number of similar challenges, including:

  • Reducing mail volumes
  • Increasing pressure to streamline operations
  • Pressure to raise revenue by introducing new, profitable delivery services
  • Meeting ever higher customer expectations regarding delivery

In this article, I will outline some of the key software solutions that have been deployed to meet these varying challenges; addressing data issues and outlining the benefits businesses can witness from using such software. I will also try to answer the question, “What is the role of SaaS based solutions?”
Geographic Information Systems (GIS)
One of the key software technologies that has been rolled out in the industry in recent years is Geographic Information Systems (GIS). This software makes it possible for users to visualise, analyse and manipulate geo-spatial based data. Data is presented as a series of layers, with each layer interacting with each other. The need to reduce costs in delivery has led to the rise in the deployment of GIS based route optimisation solutions in the parcel and postal sector.
GIS route optimisation solutions require ‘base’ data to be able to create a route:

  • Road network with routing information, eg, one way streets, turn restrictions, speed limits
  • Service and depot locations
  • Service times, volumes and call rates
  • Vehicle and people parameters

The road network data is often sourced from a third party such as Ordnance Survey or HERE, and is typically supplemented with ‘local’ knowledge. Much of the local data can be collected using mobile apps in the field, such as, paths and alleys, new builds and vehicle access problems.
There are numerous benefits that businesses can leverage when they move over to GIS based solutions. Some of these can save a business a lot of time and money, in a number of different ways. Some of the main benefits to GIS include:

  • A decrease in the total route time, number of staff and mileage
  • Adherence to delivery time windows and resultant improved customer satisfaction
  • Processing of a big data problem (route optimisation) solved in a matter of seconds or minutes
  • Assisting drivers on the road with detailed, optimal route plans

Automated Route Optimisation
For many route based problems, companies can deploy an automated route planning solution that does not require any user intervention. A system-to-system call via web services and standard APIs can create optimised routes in a matter of seconds. Parcel delivery companies can, therefore, create routes ‘on the fly’ with drivers using handheld devices receiving optimal routes just before they load their vehicles. Another example is the determination of mail companies to insert parcel deliveries onto static mail routes: The static routes may well be created on a tactical basis (in advance by planners) but the route and the new parcel delivery details are sent to an automated route optimisation engine for optimisation.
There are times, however, when manual intervention is required. For example, when the operations teams need to dynamically create a route plan, or ‘dissolve’ one route into neighbouring routes, to account for last minute problems such as vehicle breakdown or staff absence through illness.
SaaS Based Solutions
It should be noted that there is a relatively small number of route optimisation solutions that are truly SaaS based, and that have the functionality to cope with ‘real world’ problems like those described above.
Like GIS, there can be a whole host of benefits that can be taken advantage of when using SaaS based solutions. A key one is a reduced Total Cost of Ownership as the required IT infrastructure is external to the client, and all that is required is web browser access via Broadband. Another is speed – the ability to create or amend routes in a meter of seconds. A third is access; users can be working with PCs, laptops, handheld tablets or scanners – the SaaS systems simply don’t care.
A Case Study for Using SaaS Based Solutions
In 2013, the United States Postal Service entered into an agreement with Amazon to deliver their parcels on Sundays. The Postal Service had a fleet of vehicles ready to deploy, but they soon realised that they were going to be very inefficient and potentially lose money as the delivery personnel were not familiar with the routes, and each week delivery locations changed.
The Postal Service needed a way to create balanced and shorter routes to increase the efficiency of each delivery vehicle. With a SaaS solution from RouteSmart Technologies, they found that they could increase the efficiency by 30%. An independent review of the SaaS solution by the Office of the Inspector General in 2014, demonstrated that the SaaS solution created 69 routes that spanned over 2429.6 miles, this compared to management (who did not use the SaaS solution) who created 99 routes spanning over 3533 miles!
The deployed SaaS solution can scale up or down dependent on demand. During the 2015 Christmas peak the solution was scaled up to manage deliveries to 3.6 Million addresses on 48,000 routes, all processed (optimised routes created for all deliveries) in under 5 hours.
But was their faith in SaaS paid off?
Well, let’s look at the statistics:

  • There was an average saving of 8-10% with the route distance. 
  • The average delivery time was shortened by an average of 30 minutes. 
  • An average of 15 minutes was saved in sorting and loading vehicles.
  • And of course, fewer re-deliveries means fewer refunds.

In Conclusion
GIS based route optimisation software, including SaaS solutions, allows organisations to both strategically assess routes leveraging lower mileage and reduced fuel costs, as well as dynamically create routes that meat operational demands. These solutions enable parcel & postal companies to really “flex” operations in response to changing mail volumes, and for SaaS solutions reduce demands on IT resources. Finally, the return on investment is considerable, and quick!
Here at Integrated Skills, we are at the forefront of routing and optimisation software. Find out how we can help your business here – or contact our specialist team on 02380 737 983 to discuss your requirements.

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