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THIRD PARTY LOGISTICS IN DISTRIBUTION EFFICIENCY DELIVERY FOR COMPETITIVE ADVANTAGE IN FAST MOVING CONSUMER GOODS COMPANIES IN KENYA


Njambi Esther

United States International University, Kenya

Paul Katuse

United States International University, Kenya


ABSTRACT

The authors aim was to undertake a comparative study on how using third party logistics can deliver distribution efficiency and its contribution to competitive advantage for organizations. The study adopted a descriptive research design with a sampling frame of 50 companies operating in Kenya. Primary data collection method was used through mail questionnaire. Data was analyzed using Statistical Package for Social Sciences (SPSS) package version 14. The article addresses key issues related to third party logistics, why organizations decide to outsource, advantages and disadvantages of third party logistics, their impact on distribution efficiency in the Fast Moving Consumer Goods Companies in Kenya. Results based on the analysis of data relating to 50 Companies in Kenya showed that the use of third party model is effective in enhancing delivery of products to the customers premise. Moreover, organizations have a high chance of minimizing costs while maximizing their revenue from the use of third party logistics. Further, Third Party Logistics has the potential of improving customer performance in meeting consumer needs. The scope of the study was limited as it only focused on a small data set of 50 Kenyan FMCG companies. The generalization of results to other non-FMCG companies or even to all African countries ignoring potential organizational/regional differences arose as the two limitations of the study. In a time when companies are outsourcing noncore competencies, the study recommends that organizations recognize the potential contribution of 3PL firms and take advantage of opportunities to address organizational needs. It is evident from the findings of this study, Companies should be aware that 3PLs provide an opportunity for an increased competitive advantage. Through their unique position and evolving capabilities, 3PLs can be seen as strategic players in a supply chain management as opposed to mere vendors of a given organization.


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