The Effect of Outsourcing Logistic Activities on Logistics Performance of Total Ethiopia
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Date
2019-05
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Addis Ababa University
Abstract
Logistics activities mostly considered as support activities by many companies, the main purpose of this research is to find out the driving factor of Total Ethiopia for outsourcing logistics activities and the effect of outsourcing logistic activities on logistics performance. The study is carried out using descriptive survey method. The researcher included 48 respondents using census. Data was gathered from the respondents by using questionnaires and interview. Frequency, percentage and mean were used to analyze data collected through questionnaire while the data obtained through interview was analyzed qualitatively. The study discovered that the main reasons of Total Ethiopian for outsourcing its logistics activities is need to access outside expertise, efficient utilization of company’s asset and saving in capital investment. Additionally, the result indicated that Total Ethiopian benefited in the form of access to outside expertise, saving in capital investment and efficient utilization of company’s asset. The study revealed that the main challenge faced by Total Ethiopian is inefficient management of outsourced freight forwarding activities. The major performance metrics Total Ethiopian uses to value the freight forwarding service providers is based on time delivery of their shipments, responsiveness and flexibility to the needs of Total Ethiopian by the service providers and overall quality respectively. Finally, it is recommended that, in collaboration with the Ethiopian Customs Commission Total Ethiopian should avail customs clearance training to its employees so that they could be licensed as it will help them control and support the Service providers and also creating or developing its employees’ ability to enable them to monitor outside service providers and strict application of performance metrics on the freight forwarding service providers are the other recommendations forwarded.
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Ethiopian Customs Commission, The major performance metrics, recommendations forwarded.