Logistics outsourcing drivers, practice and challenges among tea processing firms in Kenya (perspectives from Kericho County)

Abstract

Logistics outsourcing is today viewed as a globally accepted best business practice. Through outsourced logistics organizations can improve; customer services, cut down costs, minimize risk, increase competitive advantage and improve shareholder returns. The study sought to determine logistics outsourcing drivers, practice and challenges among tea processing firms in Kenya. The study surveyed the tea processing firms in Kericho County (Kenya) by collecting primary data through self-administered questionnaire. Data was analyzed using descriptive statistics. The study found out that there is a strong drive towards the use of outsourcing as a strategy to reduce costs, to pursue core business activities, reduce risks, and gain competitive advantage. According to the study findings, logistics outsourcing among the tea firms was most prevalent in operations such as warehousing, fleet management, fleet operations, transport and distribution. The survey also established that some of the challenges faced by the firms as they moved to outsource their business activities included loss of control of the activities, loss of employee loyalty, industrial unrests, switching costs, loss of information to competitors and resistance to change by the stakeholders.