Why CFOS (Should) Love Route Planning Software

You might not be surprised if I told you that Logistics VPs love route planning software, because it cuts costs, improves operational efficiency and reduces driver churn. But what about CFOs? There’s plenty of reasons for them to see the value of automated route planning; not just in the transportation department, but across the entire company.

CFOs face complex challenges. A recently published survey by big-four accounting firm Deloitte – its second-quarter 2018 CFO Signals™ survey – shows that top of mind for CFOs is the goal of having a positive impact on company performance during their tenure. This is not just about simply spending less money and generating more revenue – it’s more nuanced than that. The Deloitte survey showed CFOs care deeply about value creation through growth, operational effectiveness and overall better competitiveness.

So, while not typically top of any CFO’s list of money-saving strategies, route planning software deserves serious consideration because it does more than save money on a day-to-day, tactical basis. It also improves the overall financial health and future viability of a company. As it turns out, route planning software delivers on all of the CFO’s wish-list items.

Smarter routing cuts costs, but it also promotes business growth

CFOs alarmed at the growth of delivery costs typical in many companies at present will be delighted to see that, with better route planning, delivery operations become more efficient. That doesn’t just mean cheaper, either. Routes planned with sophisticated software take less time and miles, and the route-planning process that took hours before can now be completed in minutes. You maximize use of expensive assets such as trucks, or remove a number of trucks from your fleet totally, allowing you to redeploy that capital.

Route planning software also allows you to do more with the resources you have. For instance, you can take transportation planners, who had supported the purely tactical function of getting out the morning’s orders, and leverage their knowledge of the business to support more strategic initiatives. Activities such as analyzing the size and frequency of deliveries at customer sites, or identifying changes that more cost effectively serve customers’ fulfillment needs.

Furthermore, improving delivery performance can result in increased business with existing customers (it can even warrant a raise in fees). It also improves the likelihood of winning new business.

Compared to other software purchases a business might make that have million-dollar-plus price tags, route planning tools are affordable and implemented relatively quickly. CFOs are particularly happy to learn that there can be fast ROI on route optimization software – often measured in months.

Better route planning improves efficiency, service levels and the bottom line

Route planning software hugely benefits your operational efficiency. It can save between 10 and 30 percent of delivery costs by reducing truck miles and fuel. It also maximizes utilization of your most expensive assets – your drivers and your vehicles – because smart algorithms ensure truck routes avoid needless miles. You achieve a level of routing efficiency that no human brain, working alone, can achieve.

But there are many other efficiencies to be gained across your operation.

• Push back order times and picking times. This can be the difference between retaining or winning a customer and losing out to the competition, because customers just love the flexibility it gives them.
• Reduce planning times from hours to minutes, allowing your drivers to get out on the road faster. They don’t have to hang around waiting for a manually planned schedule that took hours to formulate, then risk missing the last delivery of the day.
• Gain a granular understanding of costs. Knowing your cost per drop, cost per mile, cost to service individual customers and other vital KPIs is the first step toward continuous improvement and cost control.
• Avoid unnecessary capital expenditures. Without the proper analysis tools and the efficiency they bring, transport leaders can be driven by increased sales to add trucks and drivers they may not actually need.
• Improve driver retention. With the current driver shortage, a company’s driver pool has become one of the fastest growing cost centers for distribution organizations.  Route planning software helps create fair, achievable routes that lead to happier drivers that stay.

Further, the efficiencies continue to grow. Integrating routing and scheduling software with your vehicle tracking system, often referred to as telematics, allows the transport office to compare actual vs. planned routes, creating a continuous feedback loop for even better, more efficient route planning.

Route planning software can make you more competitive

When you have more control over your delivery operations through better routing, you can vastly increase the accuracy of the information you share with customers. In these days of Amazon-fueled expectations it has become more and more important to give customers accurate time-of-arrival information – a real competitive advantage, in fact.

For example, if you are delivering to small stores or restaurants, being able to provide accurate arrival times that reduce the amount of time staff spend away from their customers can really make a difference. Deliveries can be completed quickly and efficiently at the promised time – and goods can be available when customers want to buy them. Route planning software also gives you the flexibility to respond to seasonal demands such as ice cream during a heat-wave, or BBQ charcoal for July 4th celebrations.

Further, the ability to work with a customer to play forward the results of requested changes in delivery schedules, sizes and locations – or to proactively suggest improvements – will vastly enhance your customer service levels. Sophisticated routing and scheduling tools easily allow you to examine what-if scenarios with little time or effort, making you a true partner to your customer, and boosting your competitive advantage.

Ensure a positive influence on future performance

For these, and many other reasons, CFOs considering their contribution to the future of their companies should carefully examine the positive impact that route planning software can have on their organizations. It is a highly effective tool in enhancing competitiveness, improving efficiency across multiple departments, and driving real savings straight to the bottom line.

Now that’s something CFOs really should love!