How Has the Food Distribution Industry Changed?
Fifteen to twenty years ago, the process of transporting food was relatively simple. Nowadays, customer demands are becoming increasingly stringent with tight delivery timeframes and a need for frequent updates about the delivery process. Furthermore, with the development of various business types, companies have implemented more specific regulations for transportation, such as the required type of transportation for orders and temperature monitoring requirements. Additionally, certain locations have specific regulations based on cultural and geographical factors. Therefore, the complexity of food distribution operations may surprise you.
However, the ability to meet all these requirements and more is not easily achievable and is a mandatory competition for businesses. For the B2B model, larger retail customers will impose penalties if these requirements are not met. As for small and medium-sized customers, they will choose other service providers if you cannot provide reliable delivery operations that the retailer can depend on.
Technology can help simplify this complexity.
Fortunately, just as the food distribution industry has changed, technology has also evolved and is ready to address all this complexity. Advanced route optimization software can provide truly excellent, flexible service for your customers with more transparent and efficient delivery operations. Route optimization solution providers like Abivin have learned from their food distribution customers over the years, with many experts having worked for food distributors. We understand how complex things can get and how to help our customers deal with these challenges.
A realistic case
Consider an example of a dairy product manufacturer tasked with making 5,000 direct-to-store deliveries each week across 45 routes in a major urban area. Their customers range from large supermarkets to various restaurants and grocery stores. With nearly 2,000 SKUs, the food distribution company found daily coordination and distribution too complex and risky to handle without the support of advanced optimization software.
Not only do delivery demands constantly fluctuate with order sizes, product combinations, locations, and delivery times, but the company also has several specialty products that need to be consumed within a day. These products must be on the shelves as early as possible each day at every store. For these perishable items, the company uses a fleet of smaller trucks designated to unload within 10-15 minutes, compared to other products that typically take up to 45 minutes to unload. These specialty products generate significant revenue, making this effort worthwhile. However, planning and coordinating a mix of small and large trucks along with various delivery types creates daily challenges for dispatchers.
Now, the company uses software to analyze complex delivery requirements and generate daily route plans within minutes, minimizing time and routes while maximizing the use of drivers and vehicles. This task, which would take hours for many to achieve with less efficiency, is now streamlined. After automating route optimization, the company saw a 20% - 30% reduction in travel distances within a few weeks, along with decreased operational costs. These are highly effective savings for the company’s budget.
Learn more about how the manufacturer uses delivery route optimization software here.
More Than Just Efficient Planning
The system does much more than help businesses find the most efficient delivery routes. It provides the company with extremely detailed data and the ability to accurately analyze costs. For example, large businesses with high volumes of goods and orders tend to use a mix of internal fleets and outsourced fleets. Coordinators are usually responsible for evaluating and selecting based on criteria related to price and the capabilities of these fleets to meet the requirements set by customers and orders.
With the help of route optimization software, coordinators can plan more effectively and easily manage the fleets, which translates to reduced operational costs for the business and saves time and effort for the coordinators.
Route optimization software can also be developed to integrate with third-party delivery platforms like GrabExpress, enhancing the company's transportation capabilities and acting as a backup fleet. This means that when the volume of goods exceeds the company's available vehicles, the software will automatically transfer orders to the GrabExpress system. This increases flexibility for the company's delivery department, allowing them to meet any additional demands that may arise during operations.
Customer Satisfaction or Disappointment, It All Depends on You
Advanced software delves into the complexities of your food distribution operations, continuously addressing issues and providing flexibility to your system. Additionally, this software continuously improves to meet new requirements, delivering spectacular results for your business by saving 10% - 30% on transportation costs.
Without advanced and flexible route optimization software, you may lack the control and oversight needed to remain competitive in this low-margin industry. Even if manual route planners are doing a great job, the human brain simply cannot match the performance of complex algorithms specifically designed to handle increasing complexities.
Let us introduce you to how advanced delivery route optimization software enables food distributors to take a flexible and proactive approach in meeting the ever-evolving demands of customers while maintaining a significant competitive advantage.
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