For many manufacturers, their task finishes not when the goods are completed, but when they are delivered to the customer, be it a consumer, retail store, warehouse, processing plant or distribution centre. 

This final process of delivery to the customer can contribute significantly to customer satisfaction (or lack of it), and it also adds a significant percentage to the final cost of the delivered products.  Indeed, the cost situation is currently being exacerbated by rising fuel prices and the Working Time Directive which is widely expected to cause increasing manpower costs from March 2005 onwards.  Routing and scheduling software provides a way of bringing order to this often demanding transport function.

Daily or periodic usage

Routing and scheduling software solutions such as Paragon's are applied to the manufacturing industry in a variety of ways.  For example, in operations where order volumes vary significantly day by day, the software is typically used on a daily basis to plan the most efficient next-day vehicle routes and schedules based on actual order volumes. It is also typically interfaced with the manufacturing system to ensure that the transport and manufacturing schedules are coordinated. 

Compared to the alternative of manual transport planning, using software in this way provides several benefits: reducing overall transport cost by up to 20% through more efficient routing and scheduling; meeting predicted arrival times and promised time windows more reliably; reducing delivery lead times, due to faster planning; releasing the load details to the warehouse earlier to facilitate a smoother and more efficient warehouse operation; and simply reducing the number of man-hours required every day for planning the transport operation.

In operations where demand patterns are less variable and fixed routes are operated, the software can be used more periodically, typically once every 3-6 months, to update the fixed delivery routes and schedules to be operated over a period.  Having software available that can easily be re-run with revised volumes and customer changes means that transport efficiency levels can be maintained as customer profiles evolve.

Strategic modelling

The software can also be used as a strategic modelling tool to evaluate alternative strategies, for example involving fleet deployment, fleet mix or service levels, or plan for the introduction of new business or changes in industry legislation.  For example, in the case of the Working Time Directive, Paragon's routing and scheduling technology is already helping companies plan for and comply with the new legislation and the significant impact it is expected to have on UK transport operations.

How does the system work? 

Running on a Windows operating platform, the Paragon system holds details of customer addresses, delivery quantities, time windows, vehicle sizes, driver shift details, etc.  Using a highly developed heuristic algorithm designed specifically for optimising road-based transport operations, the software calculates the most effective delivery and collection sequences, allocates loads to appropriate vehicles and drivers, and uses digital mapping to calculate road-based journey times and distances. 

This ensures that the schedules are geographically efficient whilst meeting promised arrival time windows. Additionally, vehicle and driver time is utilised as effectively as possible and the routes are efficient in terms of total mileage incurred, with empty running reduced.  Highly configurable, with many parameters, Paragon is capable of handling the wide range of transport constraints that arise in UK logistics operations.

Links with other business systems

Paragon's routing and scheduling software is frequently interfaced with other systems within the supply chain, including Sales Order Processing (SOP) systems, Warehouse Management Systems (WMS), Transport Management systems, Fleet Tracking and Telematics systems, Production Planning and Enterprise Resource Planning (ERP) systems.

The real world benefits of routing and scheduling software

 Reduced transport costs by up to 20% by generating more efficient routes and schedules that increase vehicle and driver utilisation and reduce the total distance travelled

 Improved customer service by meeting schedules more reliably and calculating routes that automatically meet promised delivery time windows

 Reduced delivery lead times, often by a whole day, as a result of faster scheduling

 Improved warehouse efficiency with faster routing resulting in information being released to the warehouse teams earlier than before, allowing more time for picking and loading

 Faster and more accurate strategic decision-making by using the software for modelling and evaluating alternative distribution scenarios

 Less reliance upon manual administration resulting in greater accuracy and reduced cost

Customer background
Raleigh, the Nottingham based bicycle company and own account distribution operator (involving 400,000 bicycles being transported to 1,100 retail outlets each year) previously used a manual planning system to schedule 150-200 daily deliveries from two depots to destinations throughout the UK. 
With the bicycle market becoming increasingly competitive Raleigh recognised the importance of reducing lead times to improve customer service.  The answer was to implement a vehicle routing and scheduling solution to enable faster planning that would reduce the order cycle by 24 hours.

Solution supplier
Having tested several systems using live data, Raleigh found that only Paragon's software (www.paragonrouting.com) could produce more efficient routes than their manual planners. 

Benefits
With an implementation that took only two months and a payback period of less than a year, Raleigh is benefiting from an order cycle that has been reduced by one day, a 50% reduction in transport planning resources, a 9% increase in units per vehicle and a string of additional benefits.
Paragon's compatibility with Raleigh's SOP system enables delivery information to be automatically downloaded to the PC operating the Paragon system.  The Paragon software typically takes just two minutes to process the information, calculating a delivery schedule that takes account of order quantities, delivery addresses, vehicle capacities, promised delivery time windows, driver time constraints and driver work standards. 
The Paragon system produced routes are then passed to the planning team for a final check before being automatically uploaded to the Warehouse Management system to drive the picking and loading processes - replacing a manual data-entry task that previously took two hours per day.

Comment
"We needed to install a routing system in order to reduce our lead times, but we weren't prepared to compromise the efficiency of our manual planning", comments Steve Wigley, Distribution Centre Manager. 
Paragon was the only system that could produce more efficient routes than our manual ones.  As a direct result of implementing the software our delivery operation is now more efficient than ever before.  Vehicle utilisation has increased and the reduced order cycle has both improved customer service and led to a whole series of additional improvements.  We hold a day's less stock and on average we can invoice a day earlier - both of which give us a cash flow benefit. 
The shorter order cycle means our previous two day pre-weekend peak is now spread across an extra day, leading to less warehouse overtime and less use of costly emergency carriers.  Our planners are happier too because there is less tedious administration activity - the implementation has been a resounding success!"