FACTORS INFLUENCING IMPLEMENTATION OF LOGISTICS SERVICES OUTSOURCING AMONG MANUFACTURING FIRMS IN KENYA: A CASE OF EABL

Abstract

This study sought to establish the factors influencing implementation of logistics services outsourcing among manufacturing firms in Kenya by focusing on a case of East African Breweries limited. The main focus was on top management support, technological investment, regulatory framework and supplier relationship management. The study adopted a descriptive research design. The target population was 100 respondents out of which a sample size of 92 was adopted for this study. A random sampling methodology was adopted. The data was collected through a structured questionnaire which gave quantitative data that was analyzed through descriptive, correlation and regression analysis using statistical package for social sciences version 21. The findings revealed that top management support has a positive and significant influence on implementation of logistic services in the manufacturing sector. However, provision of direction in regard to logistics services outsourcing and timely disbursement are moderately practiced. The study recommends that manufacturing firms should aim to practice more of this technological investment practices so as to realize more benefits of logistics service outsourcing. The findings revealed that supplier relationship management has a positive and significant influence on implementation of logistic services in the manufacturing sector. Despite this being the case, there are some supplier relationship management practices that are less practiced in the manufacturing firms such as development of the service provider through technical assistance and financial support. Based on this, this study recommends manufacturing firms to practice more of this supplier relationship management practices so as to realize more benefits of logistics service outsourcing. The findings indicated that the relationship between regulatory framework and implementation of logistics outsourcing is positive but not significant. The study recommends a need to improve regulatory framework practices such as setting of the Key Performance Indicators as well as service level agreement at the onset of the contract with the service provider, regular performance evaluation on the logistics service provider and sharing of risks and reward evenly with the service provider which might lead to a positive and significant improvement in the implementation of logistics service outsourcing at EABL.

Key Words: Top Management Support, Technological Investment, Regulatory Framework, Supplier Relationship Management, Logistics Services Outsourcing