On October 5th, BizSpeed hosted a live Q&A with Bill Mathews, a 25+ year logistics industry veteran who has been part of 150+ logistics software implementations. Bill has worked with solutions from ORTEC, Descartes, Bringg, Roadnet Technologies, Appian, and more. He knows what successful implementations look like and why implementations fail.
Maximizing efficiency with logistics management systems
Whether you are a middle-mile or last-mile company, handling 10 deliveries or 1,000, there is an optimal method for execution. Mathews points out that the key to unlocking this efficiency is to fully embrace technology. For businesses to successfully implement routing systems, they must be open to change. Routing systems’ applicability varies across industries, and that is why only a small proportion of companies have adopted systems that cater to their specific needs.
Mathews states that a need for optimization can occur when a company has as little as 8 trucks. Each additional truck introduces a new opportunity for optimization. Mathews has seen companies with 25 trucks across multiple depots pay off their investments within two months of implementation. It takes time for companies to fully see the benefits of how these systems improve their customer service and make them a company their customers can count on.
How do route optimization systems work?
Mathews says a general rule of thumb is the implementation of a route optimization system will save a company 10% of its total transportation costs. These systems enable companies to expand their business within their existing fleets. Having each truck produce more revenue removes the need to purchase more trucks.
The duration of implementing an optimization system varies depending on the complexity of the company. For typical fleets, this process averages between 4-6 months, whereas more intricate organizations may require over a year. When companies adopt technology systems, they are embracing a culture of continuous improvement. These systems are constantly being refined and growing to be more effective.
The role of AI in logistics
According the Mathews, AI currently has a limited role in logistics as of today (Oct 2023). Technology has forever changed the way business works, but for now, AI is often used as a buzzword without true AI or ML (Machine Learning) in the background. Often it is the same algorithms that have been in place for many years but re-branded as AI. However, he does believe that it is proving to be beneficial when planning stops. Using AI to see how long you are at specific stops allows you to better plan on the best time of the day to go to that stop. Meaning there could be a time in the day to get out twice as fast. Forecasting order volume is a great place for AI and ML.
If you’re involved in petroleum logistics, wholesale fuels and lubricant delivery, propane, home heat, or 3PL logistics, this webinar is for you.
For those who could not make the webinar, the recording is embedded below.
Learn more about:
- How to know if your business needs route optimization?
- What skills does your team need?
- What are the challenges in optimizing routes?
- How to generate the optimum bulk orders?
- What are the ROI benefits, and are they real?