LOGISTICS OUTSOURCING SERVICES AND PERFORMANCE OF DAIRY FIRMS IN KIAMBU COUNTY KENYA

Abstract

The main objective of this study was to investigate the Influence of Logistics Outsourcing Services on Performance of Dairy Firms in Central Region Kenya. The study was guided by the following specific objectives; to evaluate the influence of transport management, and warehouse management on the performance of dairy firms in Kiambu County Kenya The study was guided by Transaction Theory, and Resource based theory. The research design employed was descriptive in nature and focuses on the influence of outsourcing logistics and the performance of dairy industry. This study made use of census sampling method.  The study used stratified random sampling Techniques. This implies all of the 45 respondents participated in the study. In this study, questionnaires were used in the collection of primary data. The use of means, frequencies, standard deviation and percentages were 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 has great implication to dairy firms in Kenya. It helps in decision making pertaining the logistics function of the firm, by enabling managers understand the process of logistics outsourcing and the risks of outsourcing. The study also enables managers make strategic decision by providing a cost cutting framework through logistics outsourcing, thus, gaining competitive advantage in both the manufacturing and service industry. The study concludes that transport management has a positive and significant effect on performance of dairy firms in Kiambu County, Kenya. In addition, warehouse management has a positive and significant effect on performance of dairy firms in Kiambu County, Kenya. Further, the study found that inventory management has a positive and significant effect on performance of dairy firms in Kiambu County, Kenya. The study also concludes that distribution management has a positive and significant effect on performance of dairy firms in Kiambu County, Kenya. Based on the findings, this study recommends that the management of dairy firms in Kiambu County should ensure more flexibility of their transport network to enhance firm performance.