INFLUENCE OF LOGISTICS OUTSOURCING ON PROJECT PERFORMANCE IN THE OIL AND GAS INDUSTRY IN KENYA
Abstract
Studies reveal that there are many benefits resulting from using logistics outsourcing strategy in the oil and gas industry and in the same way, challenges are faced by both oil and gas companies and logistics service providers in executing business contracts. The most outstanding benefit is that, companies outsource their logistics activities to restructure their distribution networks and achieve competitive advantage. Solutions are pursued to create an environment for the oil and gas industry and the third party logistics services providers to achieve a common goal. Importance is pegged on outsourcing full or part of logistics activities to logistics service providers in order to attain competitive advantage. Logistics outsourcing strategy plays an important role in the business especially in minimizing operating costs and spreading risk between the parties engaged in business contracts. Therefore it is necessary for company managers to check their strategies to make sure that logistics activities are in place. This study was set to examine the relationship between logistics outsourcing and oil and gas project performance in Kenya. Literature was reviewed with emphasis on the relationship between the variables, theoretical literature and empirical literature. The unit of analysis was all managing directors of the 71 registered oil and gas players who gave the information on Oil and Gas Project performance and logistics outsourcing. Data was generated by means of questionnaires to oil and gas players on the variables. Responses were statistically analyzed using descriptive statistics, product moment correlation and regression analysis. Data was presented using charts, tables and figures. The study found that there was positive correlation coefficient between Oil and Gas projects and Transportation Outsourcing. The study found weak positive correlation between Oil and Gas projects and Inventory Management Outsourcing.
Key Words: Transport, Inventory Management, Outsourcing, Project Performance
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DOI: http://dx.doi.org/10.61426/sjbcm.v4i2.434
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