Impact of Non-standardized Trucks on Vehicle Fill Rate (VFR) and Cost in Indian FMCG Sector: A Study

Abstract

Purpose—The purpose of this paper is to investigate how nonstandard truck impacts the vehicle fill rate (VFR) of a truck. In particular, the effect of nonstandard truck used to load is compared with the standard truck type. Design/methodology/approach—The research is based on a mixed-method research approach by applying quantitative research followed by case studies of two FMCG companies. The case study is aimed at developing the prerequisite to improve the vehicle fill rate (VFR) of a truck. Based on the size of the truck and carrying capacity, a comparison of the vehicle fill rate (VFR) of trucks characterizing two different configurations is made. The configurations studied are the standard truck size compared with the nonstandard truck size and their impact on vehicle fill rate in terms of volume-based food product and weight-based food product. Findings—The case study provides four main observations. Firstly, in a practical scenario, there is no standard truck size available in India. Secondly, other researchers considered truck size and truck carrying capacity as a constant and based on that they have shared the research observation but in the actual scenario truck size and carrying capacity of the truck are variables not a constant. Since this prerequisite is not practically viable, all the improvement theories applicable on vehicle fill rate to the Indian scenario need a relook. Thirdly, the change in vehicle dimension by a mere 5 cm will impact volumetric vehicle utilization by less than 1% but will impact the cost by 2.9%, which is significant for an LUP. Fourthly, the change in carrying capacity of 500 kg will lead to a freight cost impact in a weight-based food product by 3.4%, which is significant for any essential commodity. Research limitation/implication—Though the study may not be highly generalizable and may not be applicable to all kinds of FMCG products but the findings form a base to improve vehicle fill rate for any FMCG organization. Researchers may use this as a variable for further investigation to improve vehicle fill rate (VFR) for FMCG organizations. Originality/value—The study attempts to fill a gap by considering truck size or truck carrying capacity as a variable based on a real case study and by investigating the freight due to variability of truck size and carrying capacity in different configurations. Furthermore, standardization will help the logistics managers to plan efficiently in terms of dispatch.