Proof of Concept is deciding factor for Dynalogic in choosing Route Optimization Software OptiFlow
Posted by Louis D'hondt on Nov 17, 2020 11:35:00 AM
Dynalogic, a rapidly expanding logistics service provider that is part of the Belgian Bpost and comprises several other business units, including Leen Menken (a specialist in refrigerated last-mile transport), has successfully implemented OptiFlow route optimization software. Dynalogic's primary focus is full-service last-mile activities for items such as white goods, furniture, and smartphones, as well as ID-related services such as delivering alcohol with a Nix18 check or delivering passports to customers' homes. As volumes increase and customer care grows, the company is leveraging OptiFlow to provide more sustainable services, enhance customer satisfaction, and achieve cost savings.
The company comprises multiple business units and employs over 2,000 individuals. While smartphone and coffee machine repairs were the initial drivers of growth, logistics became a new source of expansion for Dynalogic as a business unit from 2006 onward. Throughout the organization, there has never been a deliberate attempt to compete on price. According to Philip Bleijlevens, responsible for strategy and innovation at the parent company Dynagroup, "Customer intimacy and fast logistics lead time have always been our top priority. This approach prevented customers with repair needs from experiencing further frustration when handing over their product for an extended period." The company philosophy is based on providing innovative supply chain solutions to customers and converting them into fans.
Dynalogic's delivery drivers operate across the entire Benelux region. Over the past decade, the number of individuals on the road for Dynalogic has increased from ten on the first day to one thousand today. "Our mission is more than just transporting packages from point A to B. We deliver relatively expensive products where a short lead time and value-added services at the doorstep are essential. For instance, we provide delivery and installation services for coffee machines and TVs." Although the vehicles were primarily used for repair activities for the sister organization Dynafix at the outset, Dynalogic has added several services over the years, including the delivery of alcohol with NIX 18 check and a network for 2XL items such as furniture and white goods, which includes installation.
OptiFlow creates more fans
Last-mile activities account for a significant portion of Dynalogic's expenses, making cost savings critical. In a fiercely competitive market where prices are continuously under pressure, efficiency is vital. The savings obtained can be immediately reinvested in improving the customer experience. The strategy and innovation manager states that a Proof of Concept (PoC) was necessary to demonstrate the amount of savings and efficiency gains that could be achieved. "Our goal was to provide more accurate service, achieve scalability in the Cloud to support the ever-increasing volumes, and plan based on traffic patterns to reduce CO2 emissions and costs. Thanks to OptiFlow, we have accomplished all of these objectives."
Proof of Concept is deciding factor
Dynalogic's decision to undertake an extensive Proof of Concept (PoC) as part of their route optimization software selection process demonstrates the software's essential role in the company's business model. Since the software lies in the heart of the organization, any changes to the processes must be carefully evaluated. “A regular selection process might compare apples to oranges, but a PoC allows IT suppliers to demonstrate their ability to provide a better solution within the set time frame. The suppliers make use of our data and take into account the specific parameters and conditions based on which we serve our customers.
We were convinced that if the PoC was successful, and the supplier demonstrated professionalism, the choice were about to make would be proven to be the right one. That now appears to be true. OptiFlow works perfectly and Conundra (now operating as PTV Logistics) delivers on its promise. During the implementation process, the project staff observed how we operate and which aspects of the planning were critical. Of course, there are always a number of unforeseen challenges when implementing software. Even then, Conundra’s people showed their best side.”
More realistic routes
Dynalogic had defined three key expectations for their route optimization software before choosing OptiFlow: “Firstly, the software needed to generate more realistic routes that would improve the quality of service for customers by utilizing traffic information and patterns; secondly, it had to be a scalable, cloud-based solution that could accommodate future growth; and thirdly, it had to reduce working hours and kilometers driven by delivery drivers in order to improve cost and sustainability.” All of these goals were met and exceeded. To ensure a fair comparison between the old system and OptiFlow, Dynalogic planners used both systems for several weeks. “Although the impact of the pandemic made it challenging to make an accurate comparison, OptiFlow consistently came out on top.”
Securing future growth
Along with expectations, the logistics service provider also specified several mandatory requirements for the new software. “The new route optimization software had to aid in securing future volume growth, which is why we sought a scalable system that operates from the Cloud. While achieving an efficiency improvement would be desirable, it was not a strict requirement.”
Go-live during a peak period
The implementation of OptiFlow proceeded as planned, despite the challenging period caused by the initial outbreak of COVID-19. "During this period, it felt like Black Friday for several months in a row. We rolled out the software depot by depot, despite the enormous volumes. However, we had to slow down the implementation pace a bit to limit risks during this period. This delay was partly because we had to train all planners remotely. It took a little more time, but it was a good test. The implementation was largely completed without people physically sitting together, call it a nice trial for working in the Cloud.” According to Bleijlevens, the go live was immediately noticed by the drivers. “With feedback such as 'the new routes are better', delivery drivers immediately gave their opinion. We also saw that the on-time performance was better.”
Improved on-time performance
According to Bleijlevens, the enhanced on-time performance holds significant importance for Dynalogic. He adds, "Previously, this factor had a slightly negative impact on our NPS score. However, with the improvements, we have observed a positive change." More precise planning has resulted in more realistic routes, leading to satisfied customers and a higher likelihood of successful first-time deliveries. From a practical standpoint, it is understandable that Dynalogic strives to accomplish first-time deliveries. Bleijlevens explains, "Delivering a washing machine to the neighbor’s address or leaving it at a parcel point is not an option."
Standardized software with customization options
Dynalogic has acquired a modern, cloud-based system by opting for OptiFlow. “The route optimization software has incorporated a great deal of knowledge from our planners, but adjustments can still be made for nuances. Our multi-customer and ever-changing market means that a black box system was not desirable, as immediate intervention is often necessary, and adaptability is crucial. We are pleased that we can also conclude afterwards that the choice for this partner was an excellent one.”