INFLUENCE OF OUTSOURCED LOGISTICS SERVICES ON PERFORMANCE OF MANUFACTURING FIRMS IN NAIROBI CITY COUNTY IN KENYA

BENARD NYAMAI KITANG’A, DR. NELSON LAMBAINO

Abstract


The manufacturing sector in Kenya has not been performing as expected or projected, expressing declining performance in some sectors and stagnating figures in other sectors, in the recent past. In light of this scenario, it has become inevitable for manufacturing firms to focus closely on procurement outsourcing practices to ensure that they are not eroded by the highly competitive global environment. It is on this background that this study sought to shed light on the influence of outsourced logistics services on the performance of manufacturing firms in Nairobi City County in Kenya. The study sought to determine the influence of outsourced order processing services on the performance of manufacturing firms in Nairobi County,  Kenya and to determine the influence of outsourced transport services on the performance of manufacturing firms in Nairobi City County in Kenya. The unit of analysis was the manufacturing companies while the unit of observation was still the manufacturing firms. The study used the Krejcie and Morgan (1970) formula to arrive at the sample size of 177 manufacturing firms. This study used a stratified sampling technique in selecting the sample size. A semi-structured questionnaire was used to collect data. Social Sciences (SPSS) version 25 was used for data analysis. The study analyzed quantitative data using descriptive statistics such as mean, frequencies, percentage, and standard deviation. Qualitative data were analyzed using content analysis and presented in prose form. The study tested the relationship between the dependent and independent variables by computing inferential statistics which includes correlation and regression analysis. The findings were presented in tables and figures. The study concludes that outsourced order processing services have a positive and significant effect on the performance of manufacturing firms in Nairobi City County in Kenya. In addition, the study concludes that outsourced transport services have a positive and significant effect on the performance of manufacturing firms in Nairobi City County in Kenya. From the results, this study recommends that the management of the manufacturing firms in Kenya should embrace the outsourcing of order processing to facilitate manufacturer’s performance. In addition, the management of the manufacturing firms in Kenya should adopt loading consolidation and route optimization.

Key Words: Outsourced Order Processing Services, Outsourced Transport Services, Performance


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