Optimize distribution and streamline costs with xTrack TMS

If distribution is an important part of your company’s business, it’s natural to want to optimize your transport activities. You’re thinking primarily of reducing delivery costs, but also of making your drivers be more productive and of meeting delivery deadlines. Reliability and timeliness are qualities that greatly influence customer behavior and you don’t want to get “blacklisted”.

Digitalization guarantees efficiency

Digitalization is the most practical solution for optimizing transportation. The xTrack TMS (Transport Management System) application includes a distribution optimization algorithm as a particular functionality. Specifically, delivery routes will be strategically planned according to transport orders automatically created in the application.

The distribution optimization functionality can be fully customized for each company that wants to use it, according to the requirements of its own customers. In addition to distribution schedules, the algorithm also generates What-If analyses. These enable you to compare different delivery route options. You can then use them in your daily distribution.

How the optimization algorithm works

To give you a clearer picture of the operations that the distribution optimization algorithm in the xTrack TMS application handles, we’ll detail the settings you can make.

• Optimization type

First, you choose the type of data you want to use – either existing in the system or new data that you import from a file. Then you decide what type of optimization you want to use/do: delivery optimization, planning optimization, or testing different scenarios using What-If analysis. That’s all. The algorithm then runs automatically. You can, however, intervene if you need to manually modify certain data.

• Selection of the starting point

You can choose as your starting point one of your places of business, the last location of the transport vehicles or any other location. For rental cars, you can use the depot where they are located as the starting point. The starting point can be chosen individually for each car.

• Geographical areas

To optimize distribution on a zonal level, you have two options: either treat all delivery zones and the entire transport fleet involved in servicing them, or divide the region into zones and assign one or more cars to a particular zone. Only customer orders allocated to the selected zones will be included in the optimization.

• Delivery intervals

It is important to schedule the delivery intervals, that is, the days on which the shipments are made, the time interval when the orders are to be picked up or delivered, the respective trips and the locations where the vehicles will return. In order to optimize the delivery route home at the end of the schedule, the location where the vehicle returns can include the drivers’ home address.

• Delivery scheduling

This can be carried out over several days of the week and should include details such as: the time slot in which the goods are loaded onto the vehicles, the start and end time of each trip, the type of delivery and the return location of the vehicles. On each selected day, the schedule will automatically run at the scheduled time and create delivery routes according to the settings. All orders entered into the system will be automatically grouped without any human intervention. If integrations with WMS and POD systems are available, orders will be automatically sent to warehouses for goods to be loaded and to drivers, to deliver them.

• What-If analysis

Route optimization in What-IF analysis scenarios includes setting order pickup and delivery intervals as well as vehicle return locations. You can check how delivery routes change when parameters change. You can analyze a situation when a car becomes unavailable for various reasons and how deliveries to customers on the affected route can be rescheduled. You can also check how many cars of a certain tonnage you need to deliver orders.

• Selection of the type of stops

Drivers can make stops for loading or unloading goods. You can import from different files or the application can automatically set data about the stops on the route after you select the orders that need to be delivered. You can make a multiple selection from the full list based on several filters (order number, type of delivery (pick-up or drop-off), supplier, delivery date, delivery date, etc.).

• Import of customer orders

The option to import orders is useful for simulating delivery routes to new customers. This simulation helps to outline a price offer that better reflects the extra effort required by the transport fleet to deliver new orders. By comparing the results of the analysis with those of the current planning, it is possible to determine the modification of the current routes (kilometers, travel times, customers, etc.) and the composition (legs) of the new routes, together with the type of vehicle optimal for the transport. The results of the analysis can be used in negotiations with the new customer to obtain a fair price.

• Automatic determination of route composition (legs)

Route planning for the next period can be done based on delivery history. All you have to do is specify the period and the vehicles you want to use. The app optimally groups customers and allocates the most suitable cars while respecting all delivery restrictions.

• Selection of vehicles

As with stops, you can select vehicles from your own car fleet or by importing the necessary data from Excel or CSV files. For example, you can import the types of vehicles that external hauliers can provide you with, or those you want to buy, and check which ones will be used for deliveries.

Advantages of cloud applications

In addition to the cost savings and efficiency gains you get when you optimize your deliveries with xTrack TMS, you also have the advantage that your application can be completely hosted on a cloud platform.

For you, this presents a series of additional benefits:

• You can completely dispense with physical servers, i.e. you significantly reduce the costs related to information storage, computing power, and maintenance;
• You can resize resources without the limitations imposed by the computing power and storage space;
• You gain stability of the system;
• Data processing speed remains constant regardless of whether you add new functionalities or not;
• The risk of data loss is eliminated completely;
• You can have access to data anytime, anywhere, provided you have an internet connection;
• The infrastructure management is up to the cloud provider.

Cloud integration is one of the goals we have set ourselves and achieved with the xTrack LMS (Logistics Management Suite), developed within the project “Innovative platform for artificial intelligence management of work processes in factories and warehouses“, co-financed by the European Social Fund through the Competitiveness Operational Programme 2014-2020, the distribution optimization algorithm we presented above was developed as part of this project.

The main objectives that we have set ourselves for this project are aimed at boosting competitiveness based on innovation, with priority being given to the development of ICT (Information and Communication Technology) products and services.

Find out how xTrack TMS can be customized for your company. Request a discussion with one of our consultants by filling in any form on our website!