What is Dynamic Routing?
Dynamic routing in logistics means that routes are created from scratch, typically for the coming hours or day(s), using a given set of orders instead of using static / master routes, with any necessary adjustments to achieve best fit. The opposite of dynamic routing is static routing, which makes use of a single (master)plan created for a coming period based on certain parameters and (an average) order set. If the volume for the coming period fluctuates considerably, then a static routing approach leads to inefficiencies like underutilized trucks or to all kinds of violations, like exceeding time windows or overloading trucks.
Why optimize routing with Dynamic Routing?
By implementing dynamic routing based on actual order volumes and delivery times, instead of less reliable forecasts like averages used for static routing, the following benefits can be realized:
- Improved utilization of trucks without exceeding capacity constraints
- Accommodation of specific customer requirements
How to optimize routing with Dynamic Routing?
What are the results of optimizing routing with Dynamic Routing?
Firstly, dynamic routing is relevant when volumes fluctuate over time; hence, it’s important to perform a good analysis to review this fluctuation.
Secondly, the step from static to dynamic routing should not be underestimated in practice: the data should have the right quality, and the organization and customers need to be informed. To facilitate the process, it is best to start with multiple scenarios instead of one static routing plan. Based on the actual volumes, the optimal static routing plan scenario is selected.
Thirdly, to fully implement dynamic routing, it is crucial to have the right tools, based on the volumes and requirements.
The main results of dynamic routing are:
Why contact ORTEC to optimize routing with Dynamic Routing?
- A flexible planning process, responsive to changes in customer demand
- Substantial cost and environmental savings due to efficient routing (less mileage/kilometers, fuel and CO2 emissions)
- Smarter decisions informed by a full overview and control of both planning and execution
- Increased customer loyalty, due to better accommodation of customer requirements.
ORTEC is specialized in optimizing planning processes and has a strong track record in realizing pre-calculated efficiencies. For example, Coca-Cola saves USD 45 million annually (EUR 40.9 million) by using ORTEC’s knowledge and solution for dynamic routing. Efficiencies of 10-15% can be realized in transportation and logistics with this one tool alone (source: Coca-Cola).