Considerations for Builders’ Merchants Moving to Centralised Route Planning

In the pursuit of efficiency, many builders’ merchants are adopting centralised delivery planning.

This approach will reduce costs and improve customer experience by unlocking latent capacity. But with so many stakeholders involved – from route planners through to sales and IT – it’s important to consider what challenges might crop up.

We’ve found that builders’ merchants often share similar concerns. Here are some of the most common, along with suggestions on how to move forward.

1. Branch-first mentality

For many builders’ merchants, each branch operates as its own profit centre and is responsible for its own customers.

Sales teams may be reluctant to see other branches serving “their” customers, particularly if the other branch gets credit for the sale. They may also question if another branch can offer the same level of service.

While these fears are understandable, a centralised approach offers many benefits to sales teams. By laying out the pros early on, builders’ merchants can help commercial teams to get on board:

Improved customer service

Merchants are able to provide a better customer service as a result of centralisation.

For example, local sales managers often feel the need to over promise to customers, resulting in missed delivery windows. A centralised delivery plan opens up capacity to meet time-sensitive requests.

Increased product availability

Sometimes, an item is unavailable at the customer’s normal branch. In this scenario, centralised planning can get the goods to the customer faster by fulfilling the order from a different location.

Up-sell and cross-sell opportunities

With better visibility across branches, sales teams can bundle add-ons that wouldn’t be feasible from a single branch.

If a truck is already heading to the site, sales reps can proactively offer additional materials the customer may need.

2. System and data readiness

In a distributed model, many branches rely on informal knowledge. Details about customers, routes and vehicles are stored in the heads of local planners, rather than a formalised system.

Outdated Enterprise Resource Planning (ERP) software and green screen systems may not have the integration capabilities to support centralised planning. Data fields such as product dimension, SKU weight and real-time stock levels are often missing.

If centralised planning isn’t feasible yet, the ideal route planning vendor will help you implement a “crawl, walk, run” approach. By optimising your current branch-based system, you could already cut planned miles by 5% or more.

3. Product constraints and load compatibility

Some products can’t be transported together due to contamination risk or physical incompatibility such as aggregates and plasterboard. Fragile or awkwardly shaped products might pose “stackability” issues when it comes to loading. Central planners need to know these nuances which are instinctive to local teams.

To manage these constraints, route planners need flexibility to validate and adjust the plan. A good planning system can provide SKU-level visibility into each order to assist with sequencing and load building.

Moving towards centralised route planning

Centralisation is a cultural change that will need input from IT, logistics and sales teams.

The end result is worth the upheaval, with builders’ merchants making significant efficiency savings. Customer retention also sees an uplift, with clients benefiting from faster deliveries and increased product availability.

Leading builders’ merchants have used Descartes technology to:

• Model and compare scenarios to predict the impact of centralised planning.
• Reduce planning time by moving to centralised, cloud-based route planning with depot-to-planner association (1-to-1 or 1-to-many).
• Share resources between branches, unlocking capacity and allowing for inter-branch transfers.
• Empower route planners to make on-the-fly adjustments when necessary.
• Consider SKU-level data when optimising routes.

If full centralisation isn’t achievable, Descartes supports a phased approach. With route optimisation tools, you can increase the efficiency of branch-based planning while leaving the door open to a clustered or centralised model.

Get in touch with Descartes to find out more today.