Logistics Optimization

5 Golden Rules for Effective Logistics Optimisation

June 11, 2024

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Optimization is a buzzword across most industries, and it’s not hard to see why - everyone likes the idea of making something work better and, in turn, boosting productivity and reducing costs. 

But when it comes time to working out what to optimize across a business (and how to actually do it), it can be difficult to figure out where to start - particularly in the world of logistics. 

To deliver the best results, effective logistics optimization should encompass an operation from end to end, from production to delivery. While that seems like a lot to take on, putting in place five golden rules can make the process easier.

1. Determine quantifiable objectives 

It’s easy to say you want to make something better, but what is it that you actually want to improve, and how?

Before putting any new systems or processes in place, it’s important to not only determine your objectives, but also how they can be measured and achieved. 

Having quantifiable objectives will not only assist in finding the right tech solution for your logistics optimization process by giving you certain features or capabilities to look out for in different software, but also in setting it up to actually measure and deliver on your objectives.    

2. Build accurate and comprehensive models

Before implementing any changes to your network that may be expensive to implement and difficult to unwind, it’s important to build comprehensive models of your logistics network in order to simulate and test the effectiveness of different scenarios. 

The right software can integrate with your existing fleet management and telematics systems, providing tools to help you analyze and plan your network from end-to-end, and make informed decisions about where you’re going next. 

3. Explicitly consider variability

A delivery truck could set off at the same time to deliver the same 10 packages, to the same 10 locations, in the same order, every day for a week and end up back at the warehouse at a different time on each of those days. That’s because of the variability of logistics operations - any number of factors, like weather, traffic, time spent with a chatty customer, or the day of the week can lead to variability in the same process.

Each step in a logistics operation comes with variability, so it’s important that your software is able to explicitly consider and account for variability in every model. 

4. Use good data 

Data now flows freely from every source, but that doesn’t necessarily mean all of it is going to be useful. Before connecting a data source to your logistics optimization software, it’s critical to evaluate whether it’s good data - that is, it’s complete, accurate and reliable, timely, and relevant to the objectives you’re trying to achieve. 

If you have an important data source that presents some inaccuracies, the right optimization software may be able to correct it. Adiona’s FlexOps algorithms, for example, can account for imperfect and incomplete data, and include tools to detect and fix common issues such as redundancies and bad geocodes.

5. Identify actionable improvements and solutions 

While accurately tracking and measuring every process across a logistics network from end-to-end may present you with interesting dashboards, it doesn’t quite equal a successful logistics optimization. For this, you need to be able to identify actionable improvements and solutions to deliver on the objectives defined at the start of the process - and then implement them.

This is where having the right optimization software in place is crucial - dashboards full of data are meaningless if they can’t easily surface key insights to help drive decision making and measure improvement.

Whatever your objectives, Adiona’s suite of logistics optimization tools can help your business - get in touch with us today to see how.