DETERMINANTS OF LOGISTICAL FUNCTIONS OUTSOURCING IN PHARMACEUTICAL COMPANIES BASED IN NAIROBI, KENYA
Abstract
In today’s highly competitive and dynamic global business environment with vastly extended supply chains, companies can often be confused by the many logistics options and sources available to them when seeking to implement a highly visible supply chain management (SCM) solution. It is therefore important for a company to know the determinants of logistics function outsourcing. The purpose of this study was to examine the determinants of logistics function outsourcing in Pharmaceutical Companies in Kenya. The study also sought to establish the effect performance metrics, suppliers’ competence, supplier-firm relationship and information systems on logistics function outsourcing in Pharmaceutical Companies in Kenya.
This research study used a descriptive research design. The target population of this study was all the 231 staff working in supply chain departments in 31 Pharmaceutical Companies in Kenya. This research study used a purposive sampling method to select the head of supply chain departments and their assistants. The sample size of this study was therefore 62 respondents. The study used primary data which was collected by use of questionnaires. Content analysis was used in processing of qualitative data and results was presented in prose form. The quantitative data in this research was analyzed by use descriptive and inferential statistics by use of Statistical Package for Social Sciences (SPSS). Descriptive statistics such as mean, frequency, standard deviation and percentages was used to analyze the data. On the other hand, correlation analysis was used to establish the relationship between the dependent and the independent variables. Data was then presented in tables, charts and graphs.
The study established that information system contributed most to logistics function outsourcing followed by suppliers’ competence, supplier-firm relationship while performance metrics had the least effect on logistics function outsourcing. To the top management of pharmaceutical companies, this study recommend that they should ensure that their organisations make use of performance metrics, consider suppliers' competence, supplier-firm relationship and information systems before outsourcing logistic functions. To the government of Kenya and policy makers, this study recommends that they should formulate policies on performance metrics standards.
Key Words: Logistics, Outsourcing, Dynamic, Global Business
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DOI: http://dx.doi.org/10.61426/sjbcm.v1i2.30
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