Logistics Management Strategy and the Performance of the Petroleum Industry in the East African Community

Abstract

The petroleum industry has a great opportunity of increasing its productivity owing to the increased global demand for oil. However, this increased demand for oil has made the management part of the supply chain and especially logistics more complex. The petroleum industry continues to suffer challenges relating to logistics management that is not present in many other sectors. The purpose of the research was to assess the relationship between logistics management strategy and performance of petroleum industry in the East African Community. The study adopted the adopted the descriptive research design that is used in explaining the current situation regarding the study variables. The target population was six nations in the East African community, namely South Sudan, United Republic of Tanzania Kenya, Republic of Uganda, Rwanda, the Republics of Burundi. Data analysis was based on qualitative approach using Nvivo software version 12. The study found that adoption of effective logistic strategy in the petroleum industry is a critical step seeking to ensure that the vital product is effectively and timely supplied to all regions in the country. The regulators had the mandate of ensuring that petroleum supply companies are capable of achieving goals linked to economic that are short term and be proactive in supplying petroleum products to consumers as required. Effective logistic channels ensure that the vital products are supplied to consumers at timely and at affordable prices. Some of the product based strategies include innovative oil based products targeting various industry sectors like manufacturing and production, automotive and agricultural sector. The petroleum products should be tailored to serve the needs of the customers and environmentally friendly. The study concludes that effective logistic strategy in the petroleum industry is a critical step seeking to ensure that the vital product is effectively and timely supplied to all regions in the country. The study recommends doe coordinated management of the petroleum logistic supply management system supported by technological integration of key parties in the system. The study also recommends collaborative coordination of petroleum supply chain by including all key parties in decision making. The parties include petroleum processing companies, petroleum supply companies, government, retailers and consumers. The East African governments, with the understanding of how logistics management strategy affects performance of the petroleum sector may need to come up with joint polices that harmonize the logistics strategies in the petroleum industry. The policies may be implemented in respective countries through the petroleum regulating associations.