Exploring the Differences Between Route Optimization vs. Route Planning

Exploring the Differences Between Route Optimization vs. Route Planning

In terms of routing and logistics, it is critical for companies to maximize their time and money. If you are a business with delivery drivers or delivered goods, this is especially crucial to you. This is typically done through route planning, but there is some confusion surrounding what that term encompasses. Additionally, when route optimization comes into the picture, this only becomes more unclear. These terms are often used interchangeably, but the two hold many significant differences that should be understood. While both focus on delivering goods in a timely manner, how they go about this is significantly different, and they each produce different results.

To most efficiently manage routing and supply chain logistics in your organization, you must be able to differentiate between the two. Fortunately, we’re here to help, and we will discuss the differences between route optimization and route planning so that you can perform both most efficiently.

What is Route Optimization?

Route optimization is the process of finding the most cost-effective route for a set of stops. Many misinterpret route optimization, believing that it means to find the shortest distance or fastest time between two points. While this is beneficial, it's not quite what we are referring to here. Instead, route optimization is to be used when you want to minimize the drive stop for multiple stops while simultaneously accounting for external factors such as customer time windows, vehicle capabilities, driver schedules, and more.

Route optimization is most often achieved through the use of advanced algorithms. Because this is a complex process, it is challenging for humans to compute all of the varying parameters of a route to find the most optimal one, especially in a timely manner. So instead, an algorithm is used. This algorithm enables you to take control of deliveries and ensure that routing needs are met quickly and efficiently by formulating delivery routes based on more than just distance. These capabilities offer many benefits to both companies and their customers.

A significant benefit of route optimization is enhanced customer satisfaction. When customers place an order, they typically have specific needs in mind, such as when they expect to receive their delivery. Route optimization software takes these needs into account. Whether their needs include a specific delivery window, or particular skills and equipment, route optimization ensures that a driver, vehicle, and route are optimally matched to fulfill these needs at the right time.

From a business standpoint, route optimization gives you greater control of the finer details of routing and logistics. Using route optimization software, you can set parameters for nearly every relevant factor, such as weight limits, drive time, shift patterns, and even traffic monitoring. All of these factors are simultaneously factored in to choose the most optimal route for delivery. As a result, you can fit more deliveries into your day, maximizing time and increasing efficiency.

Route optimization enables your organization to be more agile– prepared to adapt quickly to changing situations. While traditionally, a sick driver or last-minute change from a customer may have left you scrambling, true route optimization allows you to easily change parameters and receive your new route in seconds. With this resilience, delays are a thing of the past.

What is Route Planning?

Alternative to route optimization, route planning is the process of importing a list of orders and putting relevant destinations into a logical order. In most cases, this is synonymous with route mapping or sequencing. On the surface, this is a great solution, but it is a basic one at best. The purpose of routing logistics of any kind is to save time and money while meeting customer satisfaction. While route planning achieves this to some extent, it may not be the best method of doing so.

Route planning software uses your point of origin and maps out a path that touches each one of your multiple stops in the shortest possible order. While this gets the job done, it doesn’t take into account the details of delivery that enable your company to provide excellent customer service. Furthermore, the software does not consider factors that may delay the delivery or minimize expenses. Overall, it doesn’t do much to optimize routing and logistics, meaning you won’t be reaching your full potential. As route planning is intended to cultivate business growth and customer satisfaction, you should want the potential of this to be maximized as much as possible.

While route planning will be successful in optimizing your delivery route to some extent, it cannot account for certain factors that have an impact on the route that has been determined. This means that even though a route is selected, it may not be the most optimal or economic route, potentially missing out on savings.  With this being said, route planning paired with other advanced technology could change this. Recent innovations may further optimize route planning to allow it to meet its full potential in the near future.

Optimization is Key

Determining the best possible route for your deliveries is critical to saving valuable time and money. Using routing software, you can prepare your company to make the best decisions for your routing needs, enabling you to increase customer satisfaction through more timely and reliable deliveries. Now that you understand the difference between route optimization and route planning, it is time for you to determine which method best fits your needs.

Route planning serves as a simplified routing tool, which provides you with the fundamental insights to find an efficient route. While this is beneficial software, route optimization can provide you with an even better route, enabled by agile technology. Route optimization will provide you with the best possible route, keeping in mind that conditions fluctuate and adjust accordingly.

Ensuring that your company can reliably and efficiently deliver goods to your customers is critical to maintaining customer satisfaction. Traditionally, once goods left their place of origin, they were no longer in control of the manufacturer. Today with route optimization, companies can be sure of exactly where their goods are to ensure that they are delivered on time in the most efficient way possible. Vehicles can be stocked with optimal space utilization in mind, while routes are chosen with external factors considered. This ensures that companies take complete advantage of the time and money spent on delivery, and customers are satisfied to receive their orders as quickly as possible.

If you want to learn more get your Guide to Logistics 4.0

In this Guide you will learn:

  1. Why a strategic process in transportation planning is a top priority for digitalization

  2. What megatrends will increase supply chain volatility

  3. How to manage it