Assessment On The Logistics Outsourcing Practice Of Commercial Bank Of Ethiopia

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Addis Ababa University


The purpose of this research is to assess the challenges and prospects of outsourcing the logistics services in commercial bank of Ethiopia and to come up with the possible solution to minimize the existing problems. The study covers Commercial Bank of Ethiopia districts under Addis Ababa and Facilities Manager at the head. In this study descriptive type of research is applied and to get relevant information about the study both primary and secondary data were used. The findings of the study show that the outsourced services enabled the bank to save managers time, give more attention for the core functions of the bank rather than non core areas and expand its branch aggressively. On the contrary defining Service Level Agreement, selecting the right vendor, loss of direct controlling and measuring service qualities were the challenges of the bank as the result of outsourced services. Thus, the performance of the service provider was not as per service level agreement. Finally, it is recommended that commercial bank of Ethiopia should deal with the service provider to revise the service level The bank also need to follow up the service quality as per Service Level Agreement. In conclusion, the bank has outsourced some of its activities expecting many benefits out of it. It has benefited in concentrating on core banking activities, but it has not been benefited as much as expected. It also faced different challenges but tries to mitigate those challenges by using different strategies or mechanisms. Based on the findings of the study, the research recommended that the bank has to concentrate on diversifying the type of services to be outsourced, the service providing company and strategies to mitigate challenges in order to gain the demanded benefits out of outsourcing.



Logistics, Outsourcing, Service