I didn't have a logistics or operations background before I became a FedEx Ground contractor. I was a hardware engineer, and my job was to find novel solutions to complex problems. When I took over the company, I started noticing how inefficient some of the pick-up and deliveries were being routed. Some of my drivers would finish work before lunch, others would stay out past dinner. A bigger problem was that the same general area was assigned to two or more drivers so they'd keep running into each other while out on their route. Things looked bad and we were bleeding, so my engineer instincts took over and I decided to try and fix the problem.
The first thing I did was plot actual delivery & pick up data from our handheld scanners. Each day, the stop manifest is sent from FedEx to each driver's hand held scanner (this is how the driver knows what stops he needs to do). I plotted my stops on a map, assigning each driver a different color. The map lit up like a Christmas tree! Addresses right across the street were assigned to different work areas, which was why drivers were running into each other.
Zooming in provided a more granular view. Some quick observations:
- 6 drivers were active in the same geographic area
- 4 drivers were on the same street
- Unbalanced driver workload
- Unused truck capacity
I then removed the work area assignments and used a route optimization algorithm to determine the routes. Like magic, I saw discrete, non-overlapping, well balanced routes. I was even able to reduce the number of vehicles while making sure that each delivery and pick up was met. As you are well aware running extra routes adds considerable costs related to driver payroll, fuel, maintenance and insurance.
The last step was to take the map printout (above) to my FedEx station management and have them redefine the work area boundaries on FedEx's AWAD system.
The picture above quantifies the results of one of my work areas. We were able to reduce overall mileage by almost 40%! The whole concept to implementation process took a few weeks but in the end I was able to transform my company’s efficiency. I helped the rest of the guys in my Tracy, CA station do the same.
If you need help optimizing your work areas, I provide support and consulting services to help re-engineer your work areas. Please email email@example.com to get started. If you'd rather do it on your own, I worked with a software developer to build a FedEx route optimization app that does it automatically.