Challenges facing supply chain management in the Oil marketing companies in Kenya
Abstract
The complexities in oil marketing companies supply chains impose enormous
challenges to the SCM. SCM in the oil marketing companies in Kenya was studied
in a qualitative and quantitative survey that covered 23 oil marketing companies in
Kenya, with the purposes of identifying the challenges facing the SCM in oil
marketing companies and determining the extent to which the oil marketing
companies in Kenya are adopting best practices to manage challenges in their
supply chain. The findings show that challenges facing supply chain management
in the oil marketing companies in Kenya occur in one or more of the supply chain
components; transportation, equipment, communication, suppliers, customers,
labor and finance.
In an effort to manage their supply chain and reduce costs, oil marketing
companies are outsourcing their logistics functions to third-party logistics
companies to managing their supply chains. Oil companies also engage in strategic
planning. E-procurement, close partnership with suppliers, use of external
consultants, outsourcing non core activities, dealing with few suppliers, engaging
in vertical integration and Supply Chain Benchmarking.
The researcher recommends that there is need to expand the Kenya pipe line to
increase its oil transportation capacity and as a result reduce the cost of oil
transportation. The oil marketing companies need to train their personnel so as to
appreciate the concept of SCM and the best practices and systems that are
significant in mitigating the challenges of SCM. They also need to develop
customer relationship management, supplier relationship management and engage
in closer cooperation with other companies, government and regional players.
Further, oil marketing companies in Kenya need to invest in IT systems.
Citation
Masters in Business AdministrationSponsorhip
The University of NairobiPublisher
School of Business