Why FMCG Companies Need a Route Optimization Software
Updated: May 24
Like most other industries there is a climate of change sweeping through the logistics world. Companies involved in supply chain and logistics face significant changes to the way they do business. Changes are happening on all fronts: new companies coming into the industry, the introduction of new technologies, the increased customer expectations, fluctuations in demand and completely new business models.
FMCG, fast-moving consumer goods, represents a highly competitive and saturated market in today’s globalized world. Retailers are getting even more demanding when dealing with the distribution of their wholesale goods now so more than ever.
Logistics companies need a steady, reliable and efficient system to manage and optimize the whole process in order to stay ahead of the competition.
Of course, change by its very nature, brings with it both opportunity and risk and it is how businesses deal with these changes that will set them apart from the rest and will be central to their continued success.
The challenge for conventional supply chain and logistics businesses is first to recognize that change is occurring around them and that doing what they’ve always done simply won’t be enough for them to remain competitive.
Undoubtedly, successful firms have a considerable investment in their infrastructure. This includes the number of staff they employ, the transport systems they have in place, how they interact with customers and of course, the technology they use.
It goes without saying that any software that makes a Transport Manager’s job easier and their workforce more streamlined and efficient is going to make a difference when it comes to the logistics industry, particularly FMCG.
The New Kid on the Block when it comes to logistics software is Route Optimisation software, and it is certainly going to be a game-changer when it comes to the Logistics Industry.
A lot of businesses often still think that Route Optimisation software is a glorified Scheduling with GPS system giving their drivers the shortest distance between A and B. Although Route Optimisation software may include a SatNav facility, the software that is emerging onto the market is a lot more than just being a shipment chaperone.
The advanced solutions in Route Optimization allow route planners to manage a fleet, get driving directions, add multiple stops, improve productivity and increase service-level agreement (SLA) adherence, in line with complex business rules, warehouse opening times, traffic regulations, capacity restrictions and delivery deadlines.
Route Optimization can thus lead to saving fuel costs, additional pick-up/delivery stops, reduction of labour overtime costs and minimizing human dependency. Most importantly, it can help reduce the number of vehicles needed for the same amount of deliveries.
With Route Optimisation becoming the need of the hour for virtually every business operation, it becomes imperative that organizations choose their Route Optimisation software with utmost care.
1 - Plan Activities
Quick delivery is especially important for FMCG companies that often sell food or perishable goods. To help your delivery staff deliver faster and more efficiently, use a route accounting application to schedule activities and prioritize them based on various business criteria.
2 - Monitor Route Compliance
A van delivering products is essentially a warehouse on wheels. You must stock it properly and keep an eye on inventory to meet customer demand. Ensuring that deliveries are met on time on the ground is critical to avoid returns, failed attempts or possible loss of business. Possible delays, changes in schedule and delivery issues need to be detected from early on to better manage customer expectations and adjust the plan on time.
3 - Reduce Wastage / Downtime
Scheduling operations manually while taking all these factors into account takes up precious time that could have been spent on the road – leading to increased down time of vehicles and wastage of driver work hours.
But with route optimization software, all you need to do is input all the variables into the system, and it instantly allocates vehicles, route plans and deliveries in the most optimal way possible, thus reducing delays and wastage of precious resources.
4 - Prevent Incorrect Deliveries
Manual or inefficient route planning application can easily lead to errors, delays or incorrect deliveries, that could prove to be very expensive for the company in the long run.
But with route optimization software, all such constraints of the business are accounted for. Loads are built and distributed as per a precise route plan, so the probability of a miscalculation or mistake is almost nil.
5 - Decrease Distance and Time of Travel
The route optimization software allocates each load/order to a specific vehicle and works out an optimal delivery sequence that results in the shortest possible route for every vehicle. This means fewer miles driven on the road, and less time is taken, which naturally brings down the cost of transportation.
6 - Cut Fuel Costs
With fewer vehicles and a lesser number of stops on the road, it results in fewer miles traveled, less idling – and simply speaking, less fuel consumed for each vehicle. On a monthly or even a weekly basis, this can add up to considerable savings.
7 - Increase Productivity
Since the system allocates deliveries to the most suitable vehicles and drivers with the right skills and requisite work hours available, this results in absolutely the best possible utilization of the fleet and human resources.
8 - Cut Down on Third Party Expenses
Fleet managers get a lot more flexibility to run their vehicles. They can run extra shifts or even schedule return visits / pick up empty containers in the same shift, thus doing away with the need to employ third-party vehicles or drivers to do the extra work.
9 - Reduce Number of Fleet Vehicles
Implementing a route optimization solution results in a minimum number of vehicles delivering more orders while covering the maximum catchment area. Over a period of time, companies realize they can do more with less.
10 - Lower Maintenance Costs
Vehicles running on the shortest possible routes mean less time on the roads. Also, when vehicles are allocated optimized route plans, they are driven optimally, with fewer starts and stops and minimal idling due to traffic congestion. All of this means lesser wear and tear of the vehicles. This eventually results in lower repair and maintenance expenses for the fleet.
11 - Drive Continuous Improvements
Advanced route optimization and delivery control applications come with embedded analytics tools that can not only analyse real time fleet operation data but also carry out ‘what if’ analysis – analysing the impact of changing vehicle capacity, increasing customer locations, changing days of delivery etc. Thus, companies can always analyze the financial impact of any new decision as they grow their business.
Why NORMA is The Right Route Optimization Software for FMCG Companies?
Using Machine Learning and Evolutionary Computing, two key disciplines of Artificial Intelligence, NORMA can help FMCG Companies to optimize logistics distribution and achieve more in an increasingly competitive and noisy market.
NORMA can be used standalone, but also quickly connected to your existing systems using APIs. Below are some facts of what FMCG companies can achieve with NORMA:
Reduces the number of used vehicles by up to 35%
Reduces the number of miles driven by up to 22%
Reduces the actual driving time by up to 18%
Optimize time spent on the road by up to 45% with service time prediction
Reduces operations costs by up to 26%
Reduces time to plan by up to 10 man-hours
Find out the KPIs that Softec Technologies achieved with a major FMCG retail distribution operation with NORMA by downloading our case study Unlock FMCG Possibilities with Norma.
For more information on how NORMA can provide similar results to your distribution operations, feel free request one-to-one demo, and one of our experts will be happy to call you back to discuss your requirements in details.