Getting goods from the depot to the customer is usually a distributor's largest variable cost, yet it is often planned by habit rather than data. Route optimisation connected to your ERP builds routes from accurate order data and shows what each delivery really costs.
This article covers how route optimisation works, how it connects to Dynamics 365 Business Central and where the savings come from.
Why Most Distribution SMEs Are Leaving Money on the Table
In many SMEs, routes are planned by a transport coordinator who knows the patch well, using a spreadsheet or a whiteboard. That works most of the time, but it favours what is familiar over what is efficient.
Manual plans also struggle to adapt when volumes change, a driver is off sick or a delivery window moves. The result is longer routes, spare vehicle capacity and overtime built on assumptions nobody has checked.
These costs are buried in day-to-day operations. Route optimisation makes them visible.
What Route Optimisation Actually Does
Route planning decides the order of stops. Route optimisation goes further: it also assigns vehicles and timings to keep total cost as low as possible.
To do that, it has to respect every constraint at once: delivery windows, vehicle payload, drivers' hours rules and working time limits, access restrictions and how long each drop takes.
The more complex the operation, the bigger the gain. A business running two vehicles and twenty drops a day will see modest improvements. One running fifteen vehicles, hundreds of drops and tight delivery windows will see far more.
How Dynamics 365 Business Central Connects to Route Planning
Business Central does not include a route optimisation engine; specialist tools do that job better. Its role is to provide the accurate data those tools depend on.
Order and delivery data flows out automatically
Each confirmed order carries the delivery address, date, weight, volume and any access or time window requirements. The planning tool takes this data from Business Central through its APIs, so routes are built on current orders rather than an old export.
Proof of delivery and completion data flows back in
Driver apps send completion times, proof of delivery and exceptions back to Business Central. You can see performance against plan as the day goes on, without updating a spreadsheet.
Actual cost data lands in the right place
Fuel use, driver hours and vehicle utilisation from completed runs can be mapped back to the orders and customers they served. Finance and commercial teams can then see the true cost to serve each customer, and adjust pricing or minimum order values to match.
The Integration Landscape for UK Distribution SMEs
Several route optimisation platforms serve UK distribution SMEs. The right one depends on how complex your operation is, the size of your fleet and whether you also need live tracking, customer notifications or returns handling.
Whichever you choose, Business Central stays the system of record for orders, customers and finance. The planning tool is a specialist layer that reads from it and writes back to it. Advantage can advise on the options as part of a solution design engagement.
Where the Savings Come From
Fuel reduction through shorter, more efficient routes
Optimised routes usually cover fewer miles than manual plans. Even a ten per cent cut in daily mileage adds up to a significant saving over a year at current fuel prices.
Fewer failed deliveries
Every failed delivery costs a redelivery, driver time and customer goodwill. Accurate delivery windows and access information, combined with automated customer notifications based on the live route, cut the number of failures.
Less driver overtime
Overtime builds up when routes run longer than planned or drop times are underestimated. Optimisation tools learn realistic drop times from your actual history, so plans reflect what really happens on the road.
Better vehicle utilisation
When vehicle capacity is modelled properly, the system fills existing vehicles before adding another. Fleets that have grown reactively often find they can serve the same volume with fewer vehicles.
Getting Started
Start by setting a baseline with three metrics: miles per order, overtime as a share of total hours and failed delivery rate. Together, they turn the case for optimisation into financial terms.
If your current ERP cannot provide that data, or your planning and ERP systems are not connected, the infrastructure needs fixing first. The Advantage Transformation Sprint™ is a free, no-obligation session that maps your current technology and produces a prioritised roadmap.
Talk to Our Logistics Team
Advantage supports UK logistics and distribution businesses with ERP, integration and operational technology built on Dynamics 365 Business Central. If your systems are disconnected or you need to bring delivery costs down, get in touch.
Contact Advantage today or call 020 3004 4600.
Related Resources
- Real-Time Stock Visibility for Logistics and Distribution
- Dynamics 365 Business Central
- Logistics and Distribution Solutions
- Operational Efficiency and Automation
- Modernising Your Logistics ERP: The Complete Guide 2026
Frequently Asked Questions
Can Business Central handle route optimisation natively?
No. Business Central has no built-in route optimisation engine, but it connects to specialist route planning tools through its APIs, sending order and delivery data out and receiving completion data back.
What is the difference between route optimisation and route planning?
Route planning sets the order of stops. Route optimisation weighs every constraint together to minimise distance, fuel, time or cost. Most SMEs currently plan routes rather than optimise them.
How does connected ERP data improve route efficiency?
When weights, volumes, delivery windows and access restrictions come straight from the ERP, the planning tool works from accurate data. That removes many of the errors behind failed deliveries and rework.
What is the typical cost saving from route optimisation?
Results vary. Route optimisation vendors commonly quote fuel savings of 10 to 20 per cent, but your saving depends on how routes are planned today. As a rough rule of thumb, the case is strongest for businesses running five or more vehicles on daily multi-drop routes.
