Supply Chain Planning

The Last Mile to the Customer: Cello LMD Route Planner (1)

Last mile delivery represents the final stage of delivery of goods to end customers. Customers want high quality services at lower costs. Cello LMD Route Planner offers a delivery optimization solution that is essential to delivering such services. This first in a two-part series of white papers looks at the key functions and features of Cello LMD Route Planner.

Domestic transportation can be broken down into two areas: transportation and delivery. Transportation involves transporting cargo in large volumes across long distances. In transportation, it’s important to find cost-effective trucks and load as much cargo as possible in cargo compartments (loading optimization). Delivery typically takes place after transportation. It involves delivering goods in smaller volumes over shorter distances and to multiple destinations. Therefore, in delivery, effective multi-stop route (or milk-runs) planning is the key to improving load density and delivery time efficiency.

In the past, most deliveries were “shop deliveries,” which means delivering goods to retailers. However, the exponential growth of the e-commerce market in recent years has seen a spike in people’s interest in home delivery, which is also known as last mile delivery (LMD).

Delivery, a New Challenge for Businesses

Home delivery, or LMD, means delivering goods to end customers (mostly consumers), installing delivered products, and picking up goods from end customers. As most LMD destinations are located in residential areas in busy cities, it is difficult to predict delivery times. Also, narrow alleyways, stairs, and parking restrictions limit vehicle access in many areas. At the same time, to reduce delivery failures due to customer absence, couriers should make their best efforts to deliver goods on time by constantly communicating with customers, which makes their job quite demanding.

In this two-part series of white papers, we take a closer look at Cello LMD Route Planner that Samsung SDS has developed to help ensure an efficient planning of shop or home deliveries. This first part will cover the functions and features of LMD Route Planner, and the second part will discuss what to consider to successfully introduce and adopt the solution as well as its actual use cases.

Route Planning Process

As shown in Figure 1, the route planning process of Cello LMD Route Planner is divided into three steps: master data preparation, route planning execution, and route finalization.

Figure 1. Cello LMD Route Planner

Master Data Preparation

The first task involves preparing reference information required to plan routes. As is the case with all other optimization solutions, this is the foremost and the most critical step of the planning process. In particular, the Planner requires accurate locations of destinations. With Map API, addresses written according to the postal addressing standards can be converted into accurate longitude and altitude values.

In addition, you can greatly reduce delays and failed deliveries by acquiring information on other factors affecting vehicle access to destinations and incorporating those factors in route plans. Such factors include road widths, vehicle height restrictions, weight restrictions, and off-limit areas.

Route Planning Execution

In the route planning execution phase, the Resource Dispatcher and the Route Optimizer harmoniously work in tandem as described in Figure 2. The Route Optimizer uses optimization algorithms to create groups of candidate routes that yield the best results under the same conditions. The Resource Dispatcher assigns the selected routes to resources by referring to the knowhow of the route planning operator and the various work rules.

For example, the Planner restricts loading times and number of vehicles in accordance with dock availability, and allows for planning multi-cycle dispatches1) based on the entry times and return times of the vehicles. In addition, the Planner is designed to auto-apply dispatch priorities between temporary vehicles and fixed vehicles, smaller vehicles and larger vehicles, and short-distances and long-distances.

Figure 2. Routing Planning Execution

Route Finalization

The final delivery routes are selected through the process described above. In the next chapter, we move on to the features of Cello LMD Route Planner.

Cello LMD Route Planner: A Route Planning Solution that Delivers Unsurpassed Quality

Resource Dispatcher

Basic functions of Resource Dispatcher have accommodated the most common rules derived from various demands identified in the field. At the same time, it is highly customizable to new, distinguished shipping environments by industry and area.

Route Pattern Setting

Cello LMD Route Planner allows the user to plan routes for different types of delivery services ranging from shop delivery to white glove delivery, by defining four basic route patterns shown in Figure 3: pickup, delivery, pickup and delivery, and visit. Delivery is the most frequently used pattern. However, a return center may need to develop a separate plan for pickup services, and a service center may need to develop its own visit service plans.

Figure 3. Basic Route Pattern

Incorporating Time Constraints

Many customers are not at home during the day, and a growing number of them set certain preferred delivery times. These changes have added to the difficulties experienced by route planning operators and drivers. A failure to make the preferred delivery time may incur re-delivery expense or results in a customer complaint being filed against the company. This made it more difficult for delivery planning operators to plan routes based on their intuition, and greatly lowered the productivity of inexperienced drivers. New algorithms for delivery planning and vehicle dispatch had to be developed so that geographical constrains could be addressed along with time constraints.

Cello LMD Route Planner allows operators to set visit time windows for different customers. Time windows can be designated in one of the two types shown in Figure 5: hard time windows or soft time windows. Hard time windows apply very strict constraints; if the delivery person arrives before the time window, he has to wait for the customer until the appointed time. If the delivery person arrives after the time window, the Planner registers it as a delivery failure and discards the delivery plan. Soft time windows introduce weaker constraints. The Planner retains the plan even if the delivery person arrives before or after the given time window, but imposes certain penalties for such arrival. In Cello LMD Route Planner, the user can choose from these options and apply them depending on the characteristics of the customers or the goods to be delivered.

Figure 4. Service Time Windows

Conclusion

Cello LMD Route Planner offers a solution for planning deliveries, solving issues regarding the last phases of transportation to end customers. The Planner performs simulations that account for possible space/time constraints in the field, thereby ensuring that delivery plans do not end up being unrealistic.

The user can set route patterns for different types of delivery services from shop delivery to home delivery. The Planner is also designed to address new constraints caused by changes in the market such as the need to make customers’ preferred delivery times, and the requirement to offer break times and adjust work hours. The Planner also features the Resource Dispatcher, which automatically enters different values to develop optimized scenarios and allocate resources.

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To find out more about Cello LMD Route Planner of Samsung SDS, visit Cellologistics.com and download the white paper.

 

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