Overcoming fleet productivity
Five Keys to Overcoming the Barriers that Limit Dedicated Fleet Productivity
By Jennifer Miller, Senior Director, Operations, DHL Supply Chain and Bob Tyrrell, Senior Solution Architect, DHL Supply Chain – 12/07/2020
1. Use Best-of-Breed Software
Just because your company has a transportation management system (TMS) it doesn’t mean it is the right solution for managing your fleet. The specific functionality required to optimize a dedicated fleet is very different than that required to manage transportation flow through third-party carriers At DHL Supply Chain, we’ve evaluated the various TMS platforms on the market and concluded that a best-of-breed approach is essential to optimizing both managed transportation and dedicated fleets. A TMS optimized for freight flow just doesn’t have the necessary functionality in critical areas such as driver utilization and route planning. In addition to providing sophisticated route planning and driver management capabilities, a fleet management platform also provides better insight into fleet performance and enables more informed decisions about how and when to scale the fleet. By integrating the two systems you get the benefits of a single platform, enabling, for example, the flexibility to use third-party carriers to handle seasonal overflow in dedicated fleet capacity or redeploying capacity between operations.
2. Take a Dynamic Approach to Route Planning
One of the biggest challenges many organizations face when seeking to optimize their dedicated fleets is getting comfortable with dynamic route planning. It’s always going to be simpler to manage static routes, but, in this case, the added complexity adds value. Static routes contribute to underutilized capacity and drivers. This can be a difficult change for organizations to navigate without the right digital tools and a partner with experience implementing dynamic routing for dedicated fleets. At DHL, we find the most powerful argument for making this change is to show the savings that can be achieved through software-enabled dynamic route planning compared to the current static routes.
3. Integrate Operations
As mentioned earlier, integrating dedicated fleet and managed transportation platforms can create value and achieve flexibility across the two operations. There’s also significant value to be realized by ensuring integration between warehouse and transportation services. If you’re just starting to implement a dedicated fleet solution, you’ll need to work closely with the warehouse operations manager to determine the impact of the dedicated routes on warehouse processes. Even if you’ve been operating a dedicated fleet for years, there are often opportunities to reduce costs by taking a holistic view of transportation and warehousing. For example, when we are engaged as a warehouse and transportation partner, we can often eliminate some routes by consolidating multiple orders onto one truck. The less you look at transportation and warehousing as distinct operations and begin to see them as part of the same flow of materials, the more opportunities you’ll find to eliminate inefficiencies.
4. Achieve Visibility
End-to-end visibility has become expected across all modes of transportation today but can be more difficult to achieve than many organizations expect. If you’re new to dedicated fleet management, you’ll need to equip your fleet with a telematics solution as the bare minimum. Integrating geo-fencing into your visibility solution can also be valuable in closing gaps that can occur at delivery destinations. The next step is to bring data across managed transportation, dedicated fleet and warehousing operations into a single platform to make that data more usable for your organization and your customers. At DHL, we do this through our MySupplyChain platform.
5. Minimize Empty Miles
Minimizing empty miles is another example of how increased sophistication in dedicated fleet management adds value. Filling trucks that would otherwise be traveling empty—whether at the beginning, middle or end of their route—requires both art and science. The science is dynamically matching capacity to available loads in close proximity to the capacity. We do this through a proprietary algorithm we created specifically for this purpose. The art is matching capacity with compatible loads. There are a number of variables to consider, and we rely on transportation experts, working with our algorithm, to ensure compatibility. It’s not a simple process, but the value is significant. You probably have a good idea of how many miles your fleet is traveling empty each week. Now, imagine if you could reduce that by 25% – 50% and how that would impact supply chain costs and business profitability. Dedicated fleets used to be a relatively simple, but inefficient solution for serving high-value customers. Today, there are a number of opportunities to optimize the performance and cost efficiency of dedicated capacity, but those opportunities come with increased complexity. This increases the importance of working with a partner that has deep transportation and warehousing expertise and is at the forefront of using technology to optimize supply chain operations.