Service Outsourcing and Supply Chain Performance of Cement Manufacturing Firms in Kenya
Abstract
Service outsourcing is a concept that has been widely adopted by many manufacturing firms in
today‟s world. Globalization has been the main reason of outsourcing. Companies have therefore
worked tirelessly in order to find out new ways of running their business without losing track of
their main reasons for existence. This has therefore prompted them to outsource services and this
includes having their non-core functions being performed by third parties. Through effective
service outsourcing, cement manufacturing firms are able to reduce costs that are related with
building internal competencies, increased quality, and improved response to the changing
marketing demands, ability to concentrate on their core functions and the effectiveness and
efficiency in the supply chains. Cement manufacturing firms outsource their non-core functions
which include:- security guard, laundry, cleaning, catering, transport and logistics, information
technology and customer care services. This study therefore sought to determine the relationship
between service outsourcing and supply chain performance of cement manufacturing firms in
Kenya. The research used a descriptive and cross sectional research design. Primary data was
collected using questionnaires and administered to 53 heads of department in the cement
manufacturing firms in Kenya. The data was analyzed using descriptive, regression and
correlation analysis. The study established that cement manufacturing firms outsourced services
in order to reduce their operating costs, concentrate on their main functions, increase quality and
to improve response to the changing market demands. The study concludes that cement
manufacturing firms outsource services and accrue various benefits including ability to
concentrate on their main functions, risk sharing, cost reduction and increase in quality. The
challenges in the study included lack of client focus, fear of exposing confidential data and lack
of management support. The study then recommends that performance contracting for the case of
service providers and a method of measuring supply chain performance be devised.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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