COMPARATIVE ANALYSIS OF LAST MILE DELIVERY (LMD) COSTS BETWEEN OUTSOURCING AND IN-HOUSE WITH THE IMPLEMENTATION OF VEHICLE ROUTING PROBLEM (VRP) AT PT RDI LOGISTIK MEDAN DELIVERY CENTER (DC)

Abstract

The logistics industry faces significant challenges due to increasingly fierce price competition, mainly driven by the rapid growth of the e-commerce sector. Last Mile Delivery (LMD) shipping costs can reach 28% to 60% of total logistics costs, making it a very important area for optimization. PT RDI Logistik faces a big challenge in maintaining price competitiveness in this dynamic market. This study aims to compare the cost of LMD between two models, namely outsourcing (with a success-based fee per package system) and in-house (fleet management and human resources itself), with the application of route optimization using Vehicle Routing Problem (VRP). This study was conducted at the Delivery Center (DC) of PT RDI Logistik Medan city area, which serves 22 urban villages. The research methodology involves calculating the cost per package for both scenarios by considering Capital Expenditure (CAPEX), Operational Expenditure (OPEX), as well as operational risks that may arise. This analysis shows that the in-house model with the implementation of VRP can result in a reduction in cost per package of up to 7.11% compared to the outsourcing model, despite the higher operational risks. This research is expected to provide strategic recommendations for PT RDI Logistik in determining the most optimal Last Mile Delivery (LMD) method to increase the efficiency and competitiveness of the company in the courier and logistics industry.