Route optimization promises to cut PostNord’s carbon footprint
The planning and execution of last-mile delivery are crucial to daily operational efficiency while also having a significant impact on PostNord’s environmental footprint. Optimizing these routes can lead to substantial reductions in fuel consumption, lower emissions, and contribute to more sustainable operations.
“Route optimization is really important for us both in terms of increasing our performance and pulling some costs. It is also important in terms of supporting PostNord’s sustainability agenda,” says Kenneth Christensen, Director of Operation Transformation & Excellence in Denmark.
Significant progress has been made toward electrifying the entire last-mile fleet to meet PostNord’s climate targets. This makes route optimization even more critical, explains Kenneth. "By optimizing routes, we can reduce the number of vehicles needed. This means that our investment in new electric vehicles can be lower, as the demand for vehicles decreases with improved route efficiency.
Spurring productivity
Kenneth oversees the Optimal Routes project, which aims to replicate peak season productivity daily. This work involves creating a dynamic and efficient routing system that maximizes the utilization of vehicles and resources. “The main purpose is to look into how to recreate peak periods every day. The reason is that when we have peak season, for example, during the Black Friday sales, we also have the highest productivity.”
Initial results from this project have been promising, showing increased productivity and reduced vehicle and device usage. Kenneth adds, “It has given us another approach to route optimization, and the experiences have been really good in the places where we have done it; we have significantly reduced the number of routes in those places, and now we have developed a plan that extends route optimization throughout the entire day, not just during peak hours.”
Managing fluctuations with flexibility
Change Management Expert Mohammad Nawaz Khan is instrumental in ensuring route optimization solutions are adaptable and ready for implementation. He emphasizes the importance of flexibility in managing fluctuating parcel volumes and workforce requirements. “Logistics is a business where you have large fluctuations, and parcel volumes fluctuate across the day, week, and year. So, we need to do our best to make sure that we can even out those fluctuations through flexibility.”
Nawaz explains a two-pronged approach to achieve the optimal condition: flexible sizing of routes through ‘buffer routes’ and developing a flexible workforce. “We adjust route sizes by using these buffer routes, which can be added or removed as needed to handle fluctuations. That's at the route level. Additionally, we're moving towards a more flexible workforce, with a core team and additional staff who can step in when there are fluctuations.”
The future of delivery
The next critical step involves automating many of these processes using advanced data analytic tools. Nawaz explains that this will enhance both the efficiency and adaptability of the route optimization efforts. “We are looking towards different tools that will enable this. It doesn’t have to be a hand-held solution, but it can become automated.”
Thanks to these initiatives and the standardization of new processes, Kenneth envisions a future where operational and commercial capabilities are significantly enhanced across the Nordic region. “I believe that PostNord, on a Nordic level, can gain even greater commercial and operational strength if we succeed in becoming a more standardized business across national borders.”
