The impact of outsourcing on lead time and customer service: a survey of supermarkets in Nairobi
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Outsourcing is a growing aspect of supply chain management and is receiving a lot of attention from supermarkets globally. This is because there is stiff competition in the supermarket industry and customers are exerting a lot of pressure on retailers in terms of; demand variability, reduced lead-time, need for customized products and services. Therefore, supermarkets can no longer compete on cost reduction alone, but also on how efficient they can outsource services. This study establishes the extent supermarkets outsource services and the impact of outsourcing on lead time. The research was carried through a descriptive survey design which questioned respondents on the extent supermarket outsource services and the impact of outsourcing on lead time. The population of the study mainly constituted of procurement officers, marketing managers, operation manager or their equivalents in supermarket headquarters within Nairobi. The sample of this study consisted of 50 respondents who were drawn from 50 supermarkets. The data collected was analyzed by use of frequency, percentage and correlation analysis. The analysis indicates that supermarkets outsource advertising and marketing to a very large extent. Consultancy and training, administration of information and systems maintenance, security, facilities maintenance, general maintenance and repair are outsourced to a large extent. Besides, payroll processing, recruitment/staffing and general accounting are outsourced to no extent. The analysis also reveal that outsourcing and lead time are positively correlated. The study though successful, had some limitations in response rate due to suspicion by some supermarkets heads that the information collected can be used against them, especial by competitors. The supermarkets are usually very busy during the day and as such having the officers dedicating time to fill the questionnaires was problematic.