Optimizing Last-Mile Distribution in an Emerging-Economy Bottled Water Firm Through VRP and DDMRP Integration

This study examines the operational limitations of a bottled water distribution company, a recurring issue identified in previous research on distribution planning and route optimization. The company faced urgent challenges related to a low On-Time-In-Full (OTIF) performance of 62%, high logistics costs, and a significant proportion of incomplete deliveries. To address these limitations, the research proposed an integrated model based on the Vehicle Routing Problem (VRP) and Demand Driven Material Requirements Planning (DDMRP), aimed at reorganizing order allocation and improving synchronization between production and distribution activities. The model was evaluated through a comparative analysis of As-Is and To-Be scenarios using discrete-event simulation. Results showed an increase in the OTIF indicator to 69%, a reduction in incomplete deliveries, and a 20% decrease in late orders. Additionally, the approach generated estimated annual savings of PEN 142,443, achieved a positive Net Present Value (NPV) of PEN 238,981, and increased labor productivity by 33%.