Complete Guide to Centralized Dispatching: Benefits, Implementation & Best Practices 2024

If you are in the delivery, courier service, or dispatching business, you must have come across the argument of centralized versus decentralized dispatching methods. While both are necessary to make business deliveries more stable, you might not have the resources to sustain both simultaneously. In such cases, it is better to go with centralized dispatching. 

But we’re here to elaborate on all you need to know about centralized dispatching so you can make a sound decision for your delivery business. From what is centralized dispatching, how does it work, and how is it different from decentralized dispatching to its pros and cons and how you can improve your process, we’ll discuss it all. You’ll then be able to reap all its benefits.  Let’s get started.

Understanding Centralized Dispatching: Core Concepts

Centralized dispatching is a management system in which a central control unit directs and coordinates the work of various resources to optimize efficiency and productivity.

Centralized dispatching lets you control every single dispatching operation from a central hub (one single location). This hub contains all the vehicles, truck drivers, and goods to be delivered. The main hub also has a back office that uses software to track and dispatch the drivers. Upper is one such application that helps you dispatch your drivers with a single click while offering various other features like route optimization and planning. 

The central hub also contains the tools and machinery to manage the products. For example, a seafood delivery company will have a cold room to keep their food fresh. Moreover, inventory management, individual work management, and, sometimes, packaging also take place in these hubs. 

How does Centralized Dispatching Work? 

Centralized dispatching is not an independent process. There are a lot of things that go on behind the scenes to make this work. Let’s have a look at it-

• When the customer places an order, it pings the central hub. This alert informs the hub workers that a package will be arriving soon. 
• At the same time, the manufacturer is alerted to send the product to the central dispatching hub. 
• The delivery driver brings in the package, along with many others, and drops it at the hub.
• Next, the package is sorted and prepared for last-mile delivery. 
• The driver receives the delivery schedule and the route.
• Then, the package is delivered, and the delivery driver gets the customer to sign the proof of delivery. 
• Finally, the systems at the central hub are updated to reflect the final status of the product. 

Now, this working process was for a streamlined manufacturer who also delivers their own products. But things can be different if you have a different business model. 

How is it different from Decentralized Dispatching?

Here is a small breakdown of the differences between the centralized and decentralized dispatch models.

	Centralized Dispatching	Decentralized Dispatching
Inventory management	All the efficient management and sorting of inventory take place at a central location.	First, the inventory is managed at a central location. Then, products are sent to hubs closer to the customer, where the second round of sorting happens.
Package pilferage	Rate of the package pilferage is the lowest.	The rate of pilferage is slightly higher as the package changes multiple locations, multiple times.
Delivery prices	Delivery prices are predictable for closer delivery locations. But, prices can be high for longer delivery locations.	Delivery prices can vary depending on how many times the package is transferred from various hubs.
Human involvement	With minimum human resources, you can increase your operational efficiency.	Decentralized system requires considerably more human resources as there are multiple hubs.
Decision-making	A central figure or the top management makes all the delivery decisions.	Each hub has a separate handler who keeps the top management informed about the deliveries.

Implementation Strategy & Best Practices

Moving to centralized dispatching is a significant change that can transform your operations. Let’s break down the key steps to help you implement this system successfully.

1. Planning your transition

Start with a clear roadmap; you don’t need to switch everything overnight. Here’s what you should consider:

1. Assess your current dispatching setup
2. Set realistic timelines; most companies need 3-6 months for a full transition
3. Start with a pilot program in one department or region
4. Get early feedback from your team and make adjustments
5. Create backup plans for common challenges

2. Technology requirements

You’ll need the right tools to make centralized dispatching work. Focus on:

1. A reliable dispatch management system
2. Strong internet connectivity
3. Mobile devices for field teams
4. GPS tracking capabilities
5. Communication tools for real-time updates

Keep it simple at first. You can always add more features as your team gets comfortable with the basics.

3. Team training essentials

Your team’s success depends on good training. Here’s what to cover:

1. Basic software training for all users
2. Communication protocols and standards
3. Problem-solving scenarios
4. Regular refresher sessions
5. One-on-one support for team members who need extra help

Remember that different team members learn at different speeds. Build in extra time for those who need it.

4. Performance metrics setup

Track your progress with these key metrics:

1. Response times
2. Job completion rates
3. Customer satisfaction scores
4. Resource utilization rates
5. Cost per dispatch

Start measuring these from day one; this helps you spot and fix problems early.

This might seem like a lot, but take it step by step. Focus on getting each part right before moving to the next. 

The key is to keep your team involved and informed throughout the process. They’re the ones who’ll make this system work, so their input and buy-in are crucial.

Comprehensive Benefits Analysis

1. Decreased inbound costs

Inbound cost refers to the money you spend to get the goods from the manufacturer to the delivery hub. And since every product is first received at the central hub, you save money on transportation. In fact, you can save thousands of dollars with a centralized dispatching model. 

Centralized dispatching rightly comes with several benefits

2. Better quality control and improved overall performance

Setting up a single warehouse is comparatively inexpensive than creating multiple smaller dispatch hubs. Hence, the surplus resources can be redirected to hire more workers and delivery drivers. Dispatchers can even invest more in automation and increase the quality control of the products. In addition, all the latest technology and upgrades become affordable for you. 

3. Lower operations cost

Again, as dispatchers, you will save more money on operations as all operations happen from one hub. Overheads like utilities, rent, and employee wages also become manageable. Materials handling expenses decrease as there’s no need to constantly transfer packages from one place to another. As a bonus, the probability of damaging your products decreases. This leads to lower return rates and better customer satisfaction. 

4. Improved Inventory control 

Lastly, the back office need not scratch their head and pull their hair while managing the inventory. With centralized dispatching hubs, even simple inventory management software is enough to move and track your products. 

Cons of Centralized Dispatching

1. Higher shipping times

Now, centralized dispatch system is a perfect solution to your delivery operations woes as long as you are within a city. But once you start expanding, some cracks start forming in your centralized dispatching delivery strategy. For one, you have to set longer timelines for far-away delivery locations. This increases the idle travel time and decreases the total number of deliveries made during the day. 

2. Lower disaster prevention processes

With a central hub, you need to spend more money preparing the place for disasters. As everything is in one place, a single mishap can wipe out the entire inventory and set you back a couple of months. To add to your problems, the ongoing supply chain management issue is already affecting logistics and deliveries. So, a single incident wiping out your inventory is the last thing you want. 

3. Inflated shipping expenses

Naturally, setting up a single hub means that some delivery locations will be more distant. Therefore, to reach them, you need to spend more on transportation costs. It also increases fuel usage and takes longer delivery time. Using route optimization software does reduce some burdens by adding extra stops on the route. But it cannot magically decrease the distance your delivery driver has to travel. 

Optimization Techniques

Once you’ve got your centralized dispatching system running, it’s time to make it work better for you. Let’s look at ways to fine-tune your operations.

1. Route optimization methods

Use Upper’s route optimization software to minimize travel time and fuel costs. It can help you find the best paths, considering traffic, road conditions, and delivery priorities. 

Setting specific parameters for each route also allows you to get the right balance between speed and cost-effectiveness.

Here’s how reliable route optimization software works:

• It uses real-time traffic data to avoid busy roads
• Groups nearby jobs together
• Consider your team members’ locations when assigning tasks
• Factors in urgent jobs without disrupting planned routes
• Keeps track of which routes work best and uses that information for future planning

The goal is simple: get your team to the right place at the right time while using the least amount of resources.

2. Communication protocols

Good communication keeps everything running smoothly. Set up clear rules for:

• Regular check-ins between dispatchers and field teams
• Updates about job status
• Handling emergency situations
• Sharing schedule changes
• Customer communications

Make sure everyone knows exactly how and when to communicate. This prevents confusion and helps solve problems quickly.

3. Cost reduction strategies

Small changes can lead to big savings. Focus on:

• Cutting down on fuel usage by planning better routes
• Reducing overtime by improving job scheduling
• Using the right number of workers for each job
• Keeping vehicle maintenance regular to avoid breakdowns
• Finding and fixing inefficient processes quickly

Watch your expenses closely and look for patterns. By doing so, you might spot ways to save money that you hadn’t noticed before.

4. Efficiency monitoring systems

Use monitoring systems to gather data on delivery times, fuel usage, response rates, and customer feedback. 

Use this information to make smart changes. The numbers will tell you what’s working and what needs improvement.

Remember, improving your system is an ongoing process. What works today might need adjusting tomorrow as your business grows and changes. Stay open to feedback from your team, as they often have great ideas for making things work better.

Real-World Case Study: Residential Cart Solutions and Upper

Residential Cart Solutions, a U.S.-based waste management company, adopted centralized dispatching powered by Upper software to optimize garbage collection and reduce route inefficiencies.

Challenges:

• Residential Cart Solutions needed a way to improve transparency and efficiency in delivering and exchanging trash carts. 
• Owner Tracy Sturdy struggled with manual route planning, tracking deliveries, and ensuring timely pickups. 
• Communication gaps between dispatchers and drivers led to missed pickups, dissatisfied customers, and delayed tasks.

Solution:

When Residential Cart Solutions implemented Upper, they quickly saw results. Upper allowed her team to:

• Assign the nearest available truck to pickup locations, reducing unnecessary mileage and fuel consumption.
• Capture photo evidence for completed deliveries, giving clients confirmation of service.
• Reduce route planning time by importing Excel files, eliminating manual errors.
• Send one-click route dispatches, notifying drivers directly on their mobile devices.
• Reroute drivers efficiently, ensuring continuity in case of unexpected driver unavailability.

Results:

The transition to Upper led to impressive improvements:

• 95% on-time pickups and deliveries
• 96% transparency increase
• 87% productivity boost
• 72% reduction in transportation costs

With Upper, Tracy’s team cut planning and reporting time from hours to minutes, improved client communication, and maintained reliable records, driving both operational efficiency and customer satisfaction.

Improve Centralized Dispatching Process with Upper

Your centralized dispatching can be further improved by adding route planning software to the mix. Upper Route Planner brings in its advanced one-click dispatch, and customer notifications features to enhance your centralized dispatching processes. 

1. Optimize routes and reduce fuel costs

With route optimization, you can set up multiple stops within the same route. Consequently, it enables you to add more stops to a condensed time frame. Driving preferences and traffic are also taken into consideration when Upper optimizes the routes. Apart from that, you can save about 40% on fuel costs. 

2. Save time with route scheduling 

Along with route optimization, route scheduling empowers you to maximize your service appointments. Once set, you can save the routes in the system archives for future reference. You will also save hours with automated route scheduling features. 

3. Improve efficiency with one-click dispatch

Upper provides the solution to automate your entire driver dispatch process in one click. All the deliveries are optimized, and drivers are assigned their tasks. As a result, the drivers do not have to return to the base multiple times to get reassigned. It also improves the overall operational efficiency of your central dispatch hub.

Conclusion 

Centralized dispatching and managing it well can increase the ROI of your business by manifolds. Of course, it does not generate any direct cash flow. But it makes up for it by simplifying your delivery services systems and logistics. And, with route planner software like Upper, you can even extract more from this dispatching model. 

With Upper, you can schedule your deliveries months in advance, plan multi-stop routes, and send automatic notifications to customers—all without any manual effort. These facilities are sure to tremendously improve your dispatching process. Are you ready? Try the Upper 7 days free trial today.