Heidi Crawford
December 20, 2022

Understanding Transportation Optimization

two women looking at transport optimization software map on computer screens

An increasing number of organizations are looking to use Transportation Optimization technology to meet their financial and sustainability goals. A recent study by Gartner has suggested that 84% of supply chain leaders rank financial and sustainability goals in their top priorities.

Deploying transportation optimization software is critical for modern businesses that transport freight to stay competitive and viable in today’s world. The business risks and complications that can arise from manual transportation management are plenty; Before the arrival of transportation optimization software, organizations relied on manual, paper-based systems to plan and execute their transportation task. Planners and dispatchers had to piece the puzzle together by knowing intimate details of all routes their trucks and products travelled, as well as recalling past details of locations and customer requirements. This left very little time to consider the most efficient way to complete the work.

Implementing a Transportation Management System was the first step most organizations took to simplify and improve this process. However, growing global pressure on transportation costs, sourcing capacity and carbon emissions has driven these organizations to look for tools to optimize their transportation further.

Defining Transportation Optimization:

What is transportation optimization and how does it work?

Transportation optimization is simply doing more with less. True optimization uses advanced algorithms to analyze billions of scenarios to find the most efficient way to complete a given work set. For optimization to create efficiency and savings in practice, algorithms need to model and account for a multitude of real-world network attributes and constraints. These include time windows for any pick-up or delivery, product loading constraints, loading and wait times, vehicle capacities, road networks and terrain the truck is travelling on and many more.

What is transportation optimization used for?

Optimization technology can then be used to group work together better and create an efficient and feasible plan to minimize empty running, time, money and carbon emissions, thus completing your transportation task in the most efficient way possible.

The use of technology reduces the administrative burden of planning and provides a higher quality outcome that improves asset productivity, reduces product time-in-transit and keeps our roads safer by minimizing the truck movements in local communities. A win-win-win for everyone!

Lots of analytics and graphs in the air

Key Benefits of Transportation Optimization Software

Save on transportation costs

Ensuring your product is moving the least distance to get to its final destination in the minimal time is usually the main outcome of transportation optimization. This has financial savings across all partners in the supply chain from the carrier to the final customer, including savings in

  • fuel
  • driver hours and labor
  • maintenance

Finally - and possibly most importantly but often overlooked - is the savings in capital expense due to the reduction in the number of trucks required to undertake the work. Transportation optimization software helps reduce the underlying cost of cartage leading to substantially better outcomes across companies and industries.

Improve operation efficiency

Having dispatchers and planners use a purpose-built optimization tool ensures they are spending their time meeting your customer expectations and communicating effectively with drivers and customers, leaving the mundane work and scenario planning up to the software. In some cases, dispatchers and planners can use the output of the optimization tool as the starting point for planning - the software does the hard work, and they make the final tweaks.

Having up-to-date heavy vehicle maps in your optimization tool, ensures that loads are moving the shortest distance possible, minimizing all costs including fuel, maintenance and labor.

Digital globe over a port

Best Practices to Optimize Transportation

When optimizing transportation, allow your Transportation Management System to do the "heaving lifting" by automating the processes where possible within the technology - this includes picking the best route, the most efficient job order and start and end times.

To ensure the processes are working optimally, all users across the supply chain need to understand the importance of using the technology to it full capacity, this is best done through thorough user training and ensuring fast access to support channels.

Integration with other technology solutions within your organization are key to improving the efficiency of your operations. This could include connections to your ERP for accounting purposes, integrations with weighbridge providers or with other transportation technology that enriches the data you receive and share.

Finally, best practice comes about when your TMS is a digital twin of your real-world practices and constraints.

Deploying Transportation Optimization Software for your Business:

How do I decide what transportation optimization tool is right for me?

There are many different 'optimization' tools in the market, but there is a considerable difference in the quality and sophistication of these products. It can be hard to know where to start and what to look for. We have curated the list below to help guide you through the decision-making journey.

  1. Understand the problem you are trying to solve

  2. Look for specialized tools that model the real constraints of your industry and account for the real-world rub of what your day-to-day involves

  3. Get a demo, get references and even consider whether to undertake a data simulation to understand the opportunity and problem better

  4. Find a provider that combines high-quality optimization with a modern, simple and user-friendly TMS. This golden combination will unlock real value

  5. Ensure the company is continuing to invest in leading-edge tools and focused on continuous improvement

How to get the best results out of your optimization tool?

The key to achieving the most optimized transportation network is to select an optimization tool that is designed and purpose-built for your industry and location. Once you have selected the TMS, ensure the provider has a team dedicated to help configure your platform so that it works for you - including truck configurations, locations and constraints. You also need to make sure they take the time to train your staff and are on call to help you make the most of optimization. All of this will help ensure you save money, time and meet your sustainability goals!

M2X is a Transportation Management System that has been purpose-built to focus on transportation optimization in many specific industries including primary industries, agriculture, dairy, fuel, forestry and more. The Global Transportation industry is rapidly changing and at M2X we continue to invest in and improve our technology so that you can stay ahead of the pack.

Book your free demo today, and let us show you how we can improve your transportation efficiency and supercharge your operations. Alternatively, you can contact our expert team; they'll be excited to hear from you and walk you through how the M2X Transportation Management System works.

About the author

Heidi Crawford

Heidi Crawford

Business Development Manager

Heidi is part of the business team at M2X Group based in Christchurch, New Zealand. With experience in procuring freight for dry bulk and livestock, Heidi is passionate about ensuring all partners in the supply chain benefit from digitisation.

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