Businesses can no longer simply raise prices to improve profitability. How decision support software and automation can help.
In today’s rapidly evolving economy, expanding markets and new competition put businesses under increasing pressure to contain costs and improve service. As a result, companies are constantly searching for ways to move ahead of their competitors. This trend lies in the realization that businesses can no longer simply raise prices to improve profitability. By employing salient features of technology-based equipment management, companies can significantly improve their productivity and overall profitability by minimizing costs, not raising prices.
It isn’t enough to work hard and think fast. Companies need to plan each step and make the most of their resources, especially when managing scheduling and distribution. Even a well-thought-out schedule for a medium-sized delivery system will include redundancies and wasted effort that cost companies thousands of work-hours a year. Technology now exists to help companies manage and allocate resources with absolute efficiency. This technology is called decision support software and its use is spreading from trucking and distribution industries, where it was first used, into industries as diverse as, retailers and suppliers, field service management and healthcare.
The latest decision support software enables users to save time and money by more efficiently routing and scheduling their delivery vehicles. A sophisticated support tool can assist businesses with planning of schedules and routes, and respond to rapid and unexpected changes in operations. Current high-end PC-based systems offer route quality, navigable mapping databases, refined analysis and display tools, and user-friendly and intuitive GUIs to optimize distribution operations.
Benefits to User
While applications of decision support software vary from industry to industry based on the particular challenges for each individual business setting, the benefits of computer-based optimization tools are obvious to the educated user. Better management of resources translates into dollars saved and happier customers. As a result, businesses are better able to forecast delivery times, provide shortened time windows, improve time efficiency, cut back on mileage and fuel, reduce work-hours or number of vehicles, and increase productivity. Businesses further improve customer service as they can react quickly to unexpected and daily changes to their distribution operation.
What to Look for
Prospective users of optimization software should give consideration to many critical issues in deciding on a product. A quality decision support software investment must demonstrate results in applications over a broad range of industries to be truly effective. The points below are a few of the essential features and functionality that are inherent to a quality decision support product for resource management:
- Flexible Software — A flexible program is essential. Users must be able to configure the software to ?model their world? so that it performs best for their particular business conditions and demands faced within their industry.
- Easy Installation — Quick installation saves time and money.
- Intuitive GUI — Practical user interface is a necessity
- Dynamic Routing — Real-time or same day dispatching is becoming more and more crucial to delivering a high level of customer service and responsiveness.
- Navigable Maps — High-quality, navigable route mapping data is critical to ensure that drivers navigate the shortest routes, without unnecessary delays and unexpected problems.
- Fast Optimization — The optimization algorithms used by the system should be capable of creating cost effective routes and schedules in a manner that effectively maximizes on available resources.
- Return on Investment — With a software that delivers on these requirements, managers should recoup the costs invested in the optimization tool within six to twelve months.
Ultimately, the true test of an effective optimization tool is in the results. Users should expect no less than an immediate impact on their bottom line, with a complementary ability to better service their customers.
Whirlpool, the leading national appliance manufacturer, implemented Lightstone’s RIMMS routing and scheduling software to effectively manage and schedule its entire field staff of 440 technicians throughout the country. Previously, Whirlpool was handling the routing and scheduling of its service staff locally at 22 individual branch locations through a virtual ?pins and maps? method. RIMMS has enabled the company to automate and centralize this operation to both provide better service to customers, while reducing overall costs. Since first implementing RIMMS in its Houston/Dallas/San Antonio market in early February 1997, Whirlpool has reduced mileage for deliveries by an average of 10% (with reductions ranging from 6% – 30% on individual routes and schedules).
Other companies have reaped the benefits of using routing and scheduling software. A medical laboratory expects to achieve a savings of $250,000 during its first year by reducing the total vehicles in its delivery fleet, reducing courier hours by 52%, and increasing the percentage of projects completed on deadline to 90%. A fuel delivery customer has achieved efficiencies averaging 7% annually through the ability to automate routing and scheduling of their delivery trucks.
What’s the Future for this Technology The continued development of decision support technology will expand the on-demand, same day functionality of software, enabling dispatchers to respond instantaneously to unexpected delays, new stops/deliveries, and other changes to the system on an immediate basis.
Software for more cost effective and efficient routing and scheduling of resources is only now becoming recognized as an integral component to a distribution operation. Acceptance will grow in less traditional industries like healthcare and field service management with the increasing numbers of success stories for application of this tool.
Kenneth Bob is a founding partner of the Lightstone Group and serves as chief executive officer of the company. The Lightstone Group is the developer of the RIMMS (Resources in Motion Management System) system for route management and scheduling) decision support software.