Overcoming the Challenges of Logistics Outsourcing in Selected Oil and Gas Companies in Rivers State

Abstract

Logistics outsourcing as a conscious business decision to move internal work or activities to an external supplier has become a means of minimizing cost, reducing internal workload and gaining core competency for organizations as well as Oil and Gas companies in recent times. In spite of the enormous advantages of logistics outsourcing as reported by previous studies such as cost reduction, effective base and warehouse management, improved safety, risk sharing, Knowledge transfer, training and development. However, research has shown that logistics outsourcing have, other times turned into a wellspring of corporate disappointment and dissatisfactions. In this work, the challenges that could lead to an unsuccessful logistics outsourcing were investigated to uncover the inherent challenges and recommend possible solutions to overcoming them. The sample size was focused on the managers and assistant managers in the selected oil and gas companies and their logistics providers. A total of 350 copies of questionnaire titled Logistics outsourcing and organizational performance questionnaire (LOOPQ) was designed and administered to elicit primary information and data from respondents who were chosen from the oil and gas companies and service providers with a 90% respondent rate. Secondary data was obtained from company records. The data for this study were analyzed using the Statistical Package for Social Sciences (SPSS) for both descriptive and inferential statistics. The present study found that the failure of logistics outsourcing in the oil and gas companies can be connected to any of these challenges. The study have exposed the major challenges of logistics outsourcing in the oil and gas companies and recommended that a strategic management of logistics outsourcing which can overcome the challenges inherent in logistics outsourcing and improve organizational performance in the oil and gas industry should include: Provision of New/Standard equipment and regular maintenance by logistics providers, Effective communication network between logistics providers and the selected oil and gas companies under study, provide motivation for members of staff, Advanced Customer/Client Relation Management, ensure good Quality Assurance and Control and effective monitoring of projects.

A dynamic model of strategic outsourcing with emphasis on human resources and work experience in power industry of Iran

“…These activities are free of any useful information. Therefore, outsourcing not only makes any difficulty for the company, in the meantime it will be very useful for companies that are looking to expand their activities to other countries and have little knowledge of the new environment (Esima and Wordu, 2019). Outsourcing used in lots of arias such as supply chain management (Pournader et al, 2019),commercial logistic service providers (Falagara Sigala and Wakolbinger, 2019), improving agility of organization through outsourcing information (Karimi-Alaghehband and Rivard, 2019).But what makes it tempting to outsource organizations is the cost-cutting advantages.…”