The impact of strategic capacity expansion on service delivery in petroleum supply chain: the case of Kenya Pipeline Company Limited
This study sought to determine the impact of capacity expansion on service quality in petroleum industry. This research surveyed all the oil marketing companies involved in the importation, storage and distribution of refined petroleum products through the pipeline system, and has been in operation for the last five years. Primary data was collected through questionnaires which were distributed among the research I population. Secondary data was collected from the company records and reports. The collected data was cleaned and organized for analysis. The study results indicated that capacity expansion affects service quality in petroleum industry. It also revealed that the current capacity is constrained hence the service quality is low due to unavailability of product in western Kenya loading depots, and limited availability of ullage due to constrained evacuation of petroleum products from KOSF. It was found that capacity expansion enhanced quality service delivery in the industry. In this study, the results revealed that 100% of all the oil marketers are operating below capacity due to unavailability of enough stocks for trading due to constraints on pipeline pumping system, with some opting to use alternative means which are expensive and risky for the sake of servicing their market segments. All the marketers felt that the system currently cannot meet the demand. In addition, the marketers felt that capacity expansion of western Kenya pipeline will improve the service quality in western Kenya.