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.
