A Comparative Analysis of Outsourcing Versus In-House Logistics Management in Nigerian Manufacturing Firms: A Study of Dangote Group in Katsina State
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Background of the Study
Efficient logistics management is crucial for the success of manufacturing firms, as it directly influences production schedules, customer satisfaction, and cost-effectiveness. Nigerian manufacturing firms, including Dangote Group, face a dilemma between outsourcing logistics functions and managing them in-house. Outsourcing logistics can provide expertise and reduce operational costs, while in-house management offers greater control and aligns logistics with company strategies (Ahmed & Yusuf, 2024).
Dangote Group, as a leading manufacturing firm in Nigeria, operates in a highly competitive environment where logistics efficiency is a critical factor. The decision between outsourcing and in-house logistics management has significant implications for the company’s supply chain performance, particularly in regions like Katsina State, where infrastructural challenges and operational complexities exist (Olawale & Bello, 2023).
Statement of the Problem
Manufacturing firms in Nigeria face increasing pressure to optimize logistics management to remain competitive. However, the decision to outsource or maintain in-house logistics operations often lacks a structured analysis of their respective benefits and challenges. For Dangote Group in Katsina State, inefficient logistics can lead to increased costs, delays, and customer dissatisfaction. This study aims to provide a comparative analysis of the two approaches to identify the most effective logistics management strategy for the company (Suleiman & Hassan, 2023).
Objectives of the Study
- To evaluate the advantages and disadvantages of outsourcing logistics management for Dangote Group.
- To analyze the benefits and challenges of in-house logistics management.
- To recommend the most effective logistics management strategy for Dangote Group in Katsina State.
Research Questions
- What are the advantages and disadvantages of outsourcing logistics management for Dangote Group?
- What are the benefits and challenges of in-house logistics management?
- Which logistics management strategy is most effective for Dangote Group in Katsina State?
Research Hypotheses
- H0: Outsourcing logistics management does not significantly improve supply chain performance for Dangote Group.
- H0: In-house logistics management is not more effective than outsourcing for Dangote Group in Katsina State.
- H0: There is no significant difference in cost-effectiveness between outsourcing and in-house logistics management.
Scope and Limitations of the Study
The study focuses on logistics management strategies at Dangote Group in Katsina State, analyzing their operational, financial, and strategic implications. Limitations include access to proprietary data and the generalizability of findings to other manufacturing firms.
Definitions of Terms
- Logistics Management: The process of planning, implementing, and controlling the movement and storage of goods and services.
- Outsourcing: The delegation of logistics functions to third-party service providers.
In-House Logistics Management: The direct handling of logistics operations within an organization.
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