LOGISTICS OUTSOURCING AND PERFORMANCE OF DISTRIBUTION FIRMS IN NAIROBI CITY COUNTY, KENYA

Perpejua Kiplagat, Dr. Elizabeth Wachiuri

Abstract


Distribution firms play a crucial role in Kenya's economy by facilitating the movement of goods from manufacturers or suppliers to end consumers, ensuring that products are readily available in the market. However, distribution firms in Kenya have been facing significant challenges that have resulted in declining performance over the years. According to the Kenya National Bureau of Statistics (KNBS), logistics and transportation inefficiencies cost the country up to 12% of its Gross Domestic Product (GDP), which is higher than the global average. The main objective of this study was to investigate the influence of Logistics Outsourcing on performance of distribution firms in Nairobi City County, Kenya. Specifically, the study sought to assess the effect of warehouse management on performance of distribution firms in Nairobi City County, Kenya and to determine the effect of distribution management on performance of distribution firms in Nairobi City County, Kenya. The research design employed is descriptive in nature. According to KIFWA, the study's target audience consisted of 135 respondents from 45 registered distribution companies in in Nairobi city County. Each of the distribution firms' deputy heads and heads of the transport and logistics departments provided responses to the study's questions regarding the impact of Logistics Outsourcing on those firms' operations in Nairobi City County, Kenya. This study made use of census sampling method. The respondents used in pilot test represented 10 percent of the units to be used in data collection. The data obtained was analysed using qualitative and quantitative data, which was analysed using different techniques. The use of means, frequencies, standard deviation and percentages was employed to describe the demographic information of the respondents, which was then presented in form of tables and graphs. Regression analysis was carried out to determine the outcome of the relationship between the independent variables and the dependent variable. The study concludes that warehouse management has a positive and significant effect on performance of distribution firms in Nairobi City County, Kenya. The study also concludes that distribution management has a positive and significant effect on performance of distribution firms in Nairobi City County, Kenya. This study therefore recommends that the management of distribution firms in Nairobi City County should continue embracing value addition operations and warehouse automation to enhance firm performance.

 

Key Words: Logistics Outsourcing, Warehouse Management, Distribution Management, Distribution Firms in Nairobi City County, Kenya


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