In this section you will learn:
- What route optimisation is
- The benefits of outsourcing route optimisation
- How a route optimisation initiative was piloted in Mozambique
Route optimisation is the process wherein the most efficient routes for deliveries and transport are calculated. This is done using algorithms that take into account multiple factors such as:
- The driver’s work schedule
- The priority of stops
- Types of vehicles in the fleet
- Traffic predictions
- Road type and quality
- Any limitations such as narrow roads or low bridge clearances
Route optimisation can reduce costs while also improving the effectiveness of logistical routing. Improved routing can allow deliveries to be completed faster and reduce spending on fuel, vehicle maintenance and possibly fleet size as an optimised route enhances the utility of vehicles. This tool is used to better service last mile delivery of healthcare and provide fuller and more reliable supplies of medicines. It can also support the outsourcing process by identifying areas where outsourcing to a third-party vendor will have a positive impact on the efficiency and effectiveness of last mile delivery. Importantly, route optimisation leverages benchmarks and past experiences, it does not reinvent the wheel.
The case for outsourcing route optimisation
Route optimisation is a complex tool that is constituted with a set of advanced algorithms. It requires specialised capabilities in development and effective implementation. Benefits of outsourcing the development of this tool, include the reduced cost of implementation, access to reliable expertise and technology specialisation provided by the private sector and improved resource utilisation and speedier execution time. It can be beneficial for governments with limited resources or specialised capability to outsource functions of route-mapping to private sector partners.
In order to outsource the development of the route optimisation tool, suitable vendors will need to be identified based on capability, cost of implementation and availability of resources. An optimal routing system to would need to be identified, a timeframe and budget for the project’s implementation set, and a contracting agreement with an implementing partner embarked upon.
What is required for success?
The success of route optimisation depends on access to reliable data (a data warehouse), a well-designed route-planning software tool (technology enablers), and functional flexibility to adapt to new routing and last-minute changes. Technology enablement for route optimisation can be successfully provided by private vendors in strategic outsourcing arrangements.
How Mozambique's Central Medical Store outsourced and implemented a route optimisation initiative
Project Last Mile, with technical assistance from VillageReach and Frontline Market Research group, partnered with the central medical store – Central de Medicamentos e Artigos Medico (CMAM) – in Mozambique to develop a system for optimised routing in different seasons with different vehicle formats. The focus of this initiative was to improve the last mile delivery of health commodities.
Almost every roadway across Mozambique was physically driven and mapped to perform a detailed analysis of the time taken to reach the healthcare facility, the type of road system and the most optimised routing therein. GPS tracking and road drivability information was used to support the analysis. The analysis provided a time and distance matrix between all storage depots and health facilities, and an improved understanding of different weather conditions in each province. Project Last Mile could provide vehicle recommendations and simulate distribution plans on optimal routes for different seasons to help the CMAM make informed decisions for distribution to the last mile.
The outsourced route optimisation had three steps:
- Source and capture data
- Data integration and spatial analysis
- Route and network optimisation
A pilot of the outsourced route optimisation initiative in Nampula, Mozambique resulted in great success.
The outcomes of the pilot in Nampula Province included the following observations:
Facility list verification: 240 health facility and warehouse locations were verified and geotagged Identified risks: mapping and photographing over 260 high-risk points that have the potential to disrupt distribution.
Plotted Nampula road network: over 20,000km of GPS tracking data was recorded and used to modify the Nampula road network.
Analysed impact of weather conditions: local insights were gained on the best-suited vehicles and roads to use in Nampula for both wet and dry season.
Cost accuracy: using the Nampula road network data, Project Last Mile was able to optimise routes for the current district warehouse locations, with further efficiencies and cost savings identified for alternative warehouse locations in the intermediary warehouse model.
This outsourcing initiative has an overall projected cost saving of more than $3 per kilometre when shifting to the intermediary warehouse model.
Summary of Enabler Tool: Technology
In Technology you have learnt about various tools available to public health systems for managing and understanding the available information and data to improve the efficiency of the supply chain. The tools explored in this Outsourcing Toolkit included a Visibility and Analytics Network (VAN), electronic Logistics Management Information Systems and route optimisation. Each one was explored to understand what they are, their benefits and the options for outsourcing. Where possible practical examples of their implementation were given.
If you have worked through the Outsourcing Toolkit in sequential order you have now covered the four Process Steps and four Enabler Tools outlined in the Framework. The final section of the Outsourcing Toolkit supplies a number of Case Studies which illustrate these Process Steps and Enabler Tools can be applied.