The Outsourcing of Transport Services at DHL supply chain Kenya Ltd

Abstract

Outsourcing is growing at a rapid rate throughout the world because organizations view it as a way to achieve strategic goals, improve customer satisfaction and provide other efficiency and effectiveness improvements. Outsourcing assists management focus all their intellectual resources, expertise and time on the distinctive competencies that give the firm an edge in the market. Focusing on the core activities ensures collective learning especially on how to coordinate diverse production skills and integrates multiple streams of technologies. The purpose of this study was to investigate the outsourcing of transport services at DHL Supply Chain Kenya limited. The research design was a case study. The data collection tool was an interview guide. Content analysis was used to analyze the qualitative primary data which had been collected by conducting interviews and secondary information from the organization. The findings of the study were that DHL has been utilizing external service providers since its inception in Kenya. The company was satisfied with the work of the external service providers, as this has led to positive developments within the organization. The benefits of outsourcing transport services included the decrease in operational costs, increased productivity, increased flexibility, increased focus upon a set of core activities and increased profitability. The company encountered challenges in getting an organization with the required services and a large size of fleet, most transporters would tend to have the same fleet size yet different fleet sizes are required, the subcontracted transporters may not consistently meet the key operating standards required by the customer, dishonest drivers, pilferage of goods and high information systems costs for fleet management. From the challenges that the organization faces in implementing the outsourcing strategy, the study recommended that the management of the company comes up with strategies which would ensure that the company is not faced by similar challenges whenever they want to outsource some of its services. Further, the study recommended that the since the present study concentrated with one organization, a more extensive study covering more logistic firms should be undertaken for a comparison on benefits and challenges to be made.