Logistics Outsourcing Practices Among Tea Processing Firms In Kericho County, Kenya

Abstract

Logistics outsourcing is currently viewed as a globally accepted best business practice. Through outsourced logistics organizations can improve; customer service, cut down costs, minimize risk, increase competitive advantage and improve shareholder returns As a result both outsourcing organizations as well as logistics service providers require relevant information on existing and emerging logistic practices and trends so as to make optimal operational and management decisions. In order to acquire such information a study was undertaken from among tea processing firms in Kericho, kenya The study sought to determine logistics outsourcing practices among tea processing firms in County. The study surveyed the logistics outsourcing practices being used by the tea processing firms in Kericho by collecting primary data through self administered questionnaire. Data was analyzed using descriptive statistics. The study found out that the firms use several logistics outsourcing practices with own or in-house transport being the most common. All the tea processing firms that were surveyed outsourced some of their logistics functions though at varying degrees. Logistics outsourcing among the tea firms was most prevalent in operations such as warehousing, fleet management, fleet operations, transport and distribution. The study concluded that there exists a drive towards the use of logistics outsourcing as a strategy to reduce costs, to pursue core business activities, reduce risks, gain competitive advantage. The survey also established some of the challenges faced by the firms as they moved to outsource their business activities; these 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.