Greenplan whitepaper about tour optimization on the last mile

Increased cost and competitive pressure forces logistics operators to implement innovative solutions for last mile distribution

From growing urban mobility to increasing shipment volumes with complex customer expectations: today, logistic operations particularly on the last mile are exposed to various challenges. Increased complexity caused by (external) influencing factors and lacking investments in infrastructure impede efficiently as well as reliable service processes for end customers. Due to these rapid developments, operators and local authorities are equally under pressure. According to experts, innovative solutions are urgently needed to prevent a collapse of the urban delivery ecosystem.

Especially, technologies featuring digitized as well as automated operational processes and deliveries are continuously discussed. Apparently, many companies do not benefit from available solutions and thus, are lagging behind. Despite ongoing discussions, many solutions blunder into a conflict of objectives among operators, local authorities, and customers.

Optimized tour planning as an efficient tool for deliveries on the last mile

Apart from this conflict, tour optimization tends to offer great potential for more efficiency within urban delivery systems. In addition to improved routes helping to relieve city traffic or ease the predictability of shipments, tour optimization ensures better workforce and fleet utilization. Automated processes due to a higher digital maturity and the usage of intelligent software enable logistics service providers to benefit from optimized tours and disburden the urban ecosystem. Moreover, such applications offer remarkable cost-saving potential.

Inevitably, operators need to follow an implementation process before using intelligent tour planning tools. Today, cloud-based solutions coming as “software as a service”-package reduce integration efforts and ensure the rapid availability of such applications.

Despite all mentioned advantages and the fast deployment, many logisticians reveal difficulties regarding the introduction of digital planning systems. Yet, which factors are essential to consider and which obstacles are to overcome when implementing a modern tour planning solution?

Greenplan published Whitepaper for an introduction of tour planning software and the accompanying change management processes

Recently, Greenplan addressed this very question in a whitepaper named “Tour optimization in urban last mile”. Within a qualitative data analysis, logisticians and other industry experts were interviewed about the status quo of the usage of digital planning tools. Thereby, relevant parameters for planning optimized routes on the last mile were identified and decisive impediments for necessary inter-company change management were discussed.

The results indicate that there is no clear correlation between the type of tour planning or specific shipment volumes with regards to company size or underlying industry. However, findings prove that a more static and thus, manual tour planning approach leads to insufficient resource usage, data problems, missing standardization, lacking optimization know-how, and inefficient routes. Interestingly, in particular, companies, which tend to follow a rather inefficient tour planning approach assess their own processes as heavily digitized, technically mature, and highly efficient. Probably, this evaluation stems from a more emotional perspective. In turn, a more problem- as well as solution-oriented attitude towards the introduction of new technologies evokes a negative perception of necessary changes.

Ongoing digitization and altering market conditions compel operators to adjust. Solutions for tour optimization should be implemented following a staged and iterative approach avoiding financial as well as operative risks. This provides a solid base for sustainable acceptance of change and empowers companies to pursue further change.

Gradual adoption of digitized tour planning

Based on the results, a phased implementation roadmap for digital tour planning on the last mile was developed. The underlying concept contains a four-step selection process followed by a three-step action plan. During the selection processes service providers focus on the identification of processes offering the greatest potential for improvement through digitization. Subsequently, the action plan defines concrete steps for achieving a new digital maturity for all selected processes. Continuously challenging and running through the model adds value as well as acceptance. For most companies, external support can be particularly helpful regarding the self-evaluation and assessment of processes.

We offer the whitepaper “Tour optimization in urban last mile: Strategic roadmap for a phased implementation of digital tour planning” containing a complete summary of the researched results as a free download.

The survey and the model for implementation of digitized tour optimization are part of a scientific thesis written by Kristin Dörfer in cooperation with Greenplan.

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