Your Wishlist for the Best Routing Process
Keith LaBotz - December 09, 2021
What to Look for in a Transportation Routing Solution
Shipment routing is the cornerstone for supply chain optimization, resilience, visibility, agility, and sustainability. These aspirations are impossible without reliable, cost-effective transportation which is why routing solutions are topping wishlists right now.
With the holiday season approaching, a wish list of best-in-class transportation routing functionality seems fitting. Here’s a buzz-free list of capabilities plus a few considerations you may find useful for gauging functionality of an existing or proposed routing process.
Be Careful What You Wish For
Routing is one of those chameleon-like words that change its meaning, depending on whether you’re a shipper (tendering the shipment) or a carrier (transporting the shipment). There devil is in the workflow details which leads to two different definitions of routing:
For a shipper: routing is the process designates the carrier service level to deliver a shipment; it fulfills the ship via instructions.
For a carrier: routing is the process creates a delivery plan consisting of a transportation route (map with delivery appointments) for the shipment. The plan usually delivers multiple shipments along the planned route.
If you define routing as determining how to deliver a shipment, conversation can flow around this general definition without bogging down with execution level details.
Wish for One Routing Process
Here’s a recipe for confusion thanks to the two routing definitions. It affects companies that use third-party transportation carriers and an in-house transportation fleet to deliver orders. This is an operation that acts as both a shipper and a carrier, using two separate “routing” processes.
TMS software is routing shipments by selecting carriers like UPS, FedEx and trucking companies for orders.
Fleet management software is routing delivery vehicles (mapping out each driver’s delivery route) in the corporate transportation fleet.
Transportation forecasting and S&OE programs are sharing data with both routing processes.
This problem is more than an occasional bout of confusion. A closer look will expose a divide right down the middle of enterprise transportation, marked by data silos, inefficient workflow, and sketchy visibility. Forget about achieving meaningful optimization where there are two separate routing processes.
A single routing process for in-house and third-party transportation won’t resolve confusing terminology, but it will quickly streamline transportation and allow optimization. Companies that use third-party transportation carriers and an in-house transportation fleet need one routing process that supports both shipment routing definitions.
Wish for Plug n Play Routing
SaaS apps like ProfiTOUR allow quick, affordable, no-risk parallel deployment with existing systems. Transportation routing is an exceptional starting point for supply chain AI, typically isolated to a few points in the workflow and relatively static. The right vendor makes all the difference in implementation. Look for a vendor who takes time to thoroughly understand your requirements, demonstrates the solution, and assists staff with mapping and testing enterprise data.
Wish for Universal Multi-Modal Carrier Support
Simpler is always better right? So look for one solution to evaluate every transportation mode and carrier when determining how to deliver an order:
Corporate in-house transportation fleet
Common carriers: LTL, small parcel (DHL, UPS, FedEx), courier, truckload.
Ocean, rail, and air freight services
Intermediaries: online spot markets, matching services (DAT), brokers, forwarders, and 3PL warehouses
Mules, bicycles, canoes, pigeons. Seriously. No limits on transportation.
Wish for Dynamic Routing
Dynamic routing is very Zen. The ultimate goal is optimization, which is really just continuous planning in real-time. With this perspective, there is no differentiation between planning and execution. All is one Grasshopper.
On the surface, shipping is anything but tranquil oneness. I see volatility. Shifting carrier capacity, fluctuating order volumes, schedules are missed, customers make last minute switches. Change is constant. That’s why routing and planning must be constant. .
Consolidation of released orders: Consolidation of shipments in progress, encompassing current warehouse pick waves, packing, cross-docking from receiving, in production, and staged for pickup.
Consolidation of future orders: Potential consolidations of booked and forecast orders with released orders. Qualified orders may be released early or staged shipments delayed for later consolidation, depending on customer requirements.
Carrier reassignment: Re-routing the initial delivery method if conditions change cost/ benefit by x% is a mark of routing excellence. It takes an agile process to change routing mid-stream - it’s relatively rare to find outside of vendor sales literature, but it will eventually become the norm.
Wish for the 3 Most Important Qualities
The best is saved for last. Three qualities are crucial to supply chain optimization, but only a small handful of routing solutions offer all of them. They are a game changer that probably warrant a new class of routing solution and they certainly deserve more detail than space permits in this post. Next week’s post will tell you what to look for in a routing solution to make sure these qualities are present.
Smart - AI-enabled refinement of routing parameters.
Holistic - driven by supply chain stakeholder requirements.
Extensible - designed for deeper integration with APS, S&OP, and transportation planning.
Considering that shipment routing is the cornerstone of supply chain optimization, this wishlist may serve you better as checklist list for supply chain success instead.
If you wish to learn more about the 3 Most Important Qualities for a routing solution, wait one week and your wish will come true.
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