Innovation powers dynamic VR sector

Biennial survey of vehicle routing software focuses on recent and future trends that are driving the industry forward.

Vehicle Routing

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By Peter Horner

Like a shark, vehicle routing (VR) software vendors have to keep moving forward or they’ll lose market share … or disappear from the marketplace altogether. Whether it’s responding to ever-increasing demands from customers or leveraging and integrating new technology in the big data era, the VR industry is constantly evolving and looking ahead. In such a dynamic and highly competitive environment, customers and clients benefit as higher expectations drive innovation.

Further down the road lurk yet more potential industry disrupters such as driverless vehicles and delivery drones. We’ll get to those possibilities a little later, but first, let’s focus on the 2018 edition of OR/MS Today’s biennial VR software survey, particularly the trends and changes that have impacted the industry since our last such survey and the expected trends and changes that will likely make an impact in the foreseeable future as conveyed by respondents.

Recent Trends

The march toward cloud-based solutions or software-as-a service (SaaS), noted by Hall and Partyka in the 2016 survey [1], continues to accelerate. “Companies are more open to use SaaS and cloud-based technologies since they’re not new to them,” says Rubin Filter of Intelligent Routing Products when asked what was the biggest change he’s seen since the last survey. Adds Dr. Marc Gerlach, managing director of DNA Evolutions GmbH, “A major trend was the shift from in-house installations to web-based planning and SaaS solutions.”

Meanwhile, the demand for same day or even hourly delivery service in some cases has created “greater need for real-time optimizers capable of same day re-routing on short notice to handle short delivery timescales – two-hour delivery for goods, 45 minutes for hot food,” says Dr. Philip Welch, founder of Open Door Logistics.

Greg Wietholter, principal, Route Solutions, notes that mobile offerings have been bolstered as smartphones and tablets have become standard equipment for workers in the field, adding that the industry continues to move toward paperless, instant and fully synchronized operations.

Filipe Carvalho, general manager of Widescope, offers a long list of recent trends, including predictive traffic while planning, embedded real-time traffic usage at execution time, the ability to optimize very large problems, the ability to use data to infer new rules and constraints in the future, and the adoption of mobile technology by drivers and recipients.

Alessandro Lori, head of routing and data science at Fleetmatics, emphasizes the role artificial intelligence has played in recent years at his company. “Artificial intelligence and new data assets let us deliver to our customers a new product experience where route planning is based on customer needs and the latest information available from drivers and vehicles,” he says.

What’s Ahead

So what do the next few years hold for the VR software industry?

Look for more regulatory changes, real-time routing requirements and still higher customer expectations and a continued move to cloud computing and mobile tools, along with highly automated planning and the consolidation of vendors through acquisition, say survey respondents.

Widescope’s Carvalho anticipates optimization of larger parts of the supply chain simultaneously from the salesperson routes to the sourcing and warehousing to the long-haul transportation and final mile delivery.

DNA Evolutions’ Gerlach expects to see more expert systems for specific functionalities. “Automatic tour planning and optimization will become more and more just one component next to others in integrated ERP solutions,” he says.

Intelligent Routing’s Filter predicts client companies will look for the simplicity and scalability of cloud-based services technology, but they would like to stay in control of their data. “Self-hosting is one traditional option, but it does not scale well for smaller companies,” he says. “With services platforms like Amazon Web Services, the option of self-hosting is now extended to the additional option of full data control without the need of IT infrastructure. This allows for deployments where companies can stay in control of their data on a single platform while running the latest SaaS optimization solution.”

To Infinity and Beyond

According to the 1960s TV cartoon “The Jetsons” and numerous science fiction movies, we should all be driving flying cars. Five years ago, Amazon CEO Jeff Bezos imagined a fleet of drones delivering packages to businesses and homes. Today, driverless vehicles are plying the streets of America, albeit in very small numbers and largely prototype demonstration situations.

Separating fantasy from reality for a moment, what will be the impact, if any, of drones and driverless vehicles on the VR industry looking further out into the future? Tim Pigden, managing director and co-founder of Optrak Distribution Software, summed it up this way: “Drones are marginal (outside of small parcel deliveries). Driverless vehicles are dependent on adoption rate; the bigger consideration in the short term is ‘platooning’ and the associated additional algorithmic challenges. For multi-drop work, robotized deliveries are a long way off. Until then, personnel (drivers, crew) are still essential for completing the delivery process.”

This Year’s Survey

This year’s abbreviated survey includes responses from companies who responded by the deadline to an email and online questionnaire. The information provided (pages 38-39) is self-reported and unverified. Many other VR software vendors and products are out there, and we look forward to adding their names and products to the online version of the survey. Vendors who missed the deadline and would like to add their software product to the online version of the survey can do so by visiting: http://lionhrtpub.com/ancill/vrsurvey.shtml.

Hall and Partyka’s advice [1] in selecting a vehicle routing product holds true today as it did two years ago: “In selecting a vehicle routing product, look for vendors that have experience serving similar industries to your own, and test the software on a representative data set to assess the quality and speed of solutions. Ask for references and determine whether any prior customers have switched to another product and why. And look ahead to see whether the company has the capability to maintain and update the software to meet your future needs. Consider total cost of ownership, including license costs, staff support and future upgrades and maintenance.”

As mentioned at the start, vehicle routing software companies need to be constantly moving forward or they will die. While the future is uncertain, it’s clear that new challenges and opportunities await … and high-end analytics and data-driven solutions are the keys to driving ultimate success in vehicle routing solutions.

Peter Horner (peter.horner@mail.informs.org) is the editor of OR/MS Today and Analytics magazines.

Reference

1. Hall, R. and Partyka, J., 2016, “Higher expectations drive transformation,” OR/MS Today, Vol. 43, No. 1, pp. 40-47 (February 2016 issue).

Click here to view the 2018 Vehicle Routing Software Survey.

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