STUDENTS' CORNER - 174

Choosing routes cost-effectively is a necessary business strategy

 

Again, the objective of routing and route scheduling is moving your product/s to the end-user, the customer with lowest logistic cost.

Generally, experts talk about three important processes in connection with this kind of task in transportation: routing, route scheduling and route optimization. They are three different tasks but the ultimate aim of these tasks is cutting down your expenses in the movements of your products to customer/s. Using required number of vehicles, choosing the shortest route to the destination, using not more than required people in the task, minimizing the fuel consumption so that cost of the fuel is effective not being in excess to the requirement,--- all these activities are involved in these three operations.

Routing is a significant component of logistics; with ever rising competition, any business enterprise to sustain itself if not at least to move up on the ladder of market share, must remain cost-conscious; that is, it should not spend more than what is necessary for any business operation, be it small like buying some office equipment for administration or serious like choosing multi-modal transport for shipping its products to a foreign customer. If you slacken attention on the cost-consciousness, there is the possibility that at a time your company may run into shortage of finance for essential activities.

Routing is the process of arriving at, creating the most cost-effective route; it means generally choosing a shortest but effective distance for the vehicle to transport your product; choosing a vehicle which suffices by its size for the products to be loaded on to and also choosing an exert driver who knows how to minimize fuel consumption. Taking such care of all these details finally cuts down the cost of maintenance.

All these considered measures ultimately impact on the pricing of your commodities; they make you competitive in the market, domestic and international.

In our next session we shall move onto route scheduling.