An investigation of the effects of logistics outsourcing on operational efficiency: A study of Coca-Cola Nigeria in Taraba State
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Background of the study
Logistics outsourcing has become a key strategy for many companies aiming to improve operational efficiency while reducing costs and focusing on their core business activities (Alkhatib et al., 2023). In the FMCG sector, where speed and reliability are critical, companies like Coca-Cola Nigeria have turned to third-party logistics (3PL) providers to handle the complexities of distribution, transportation, warehousing, and inventory management. Outsourcing logistics operations allows companies to leverage the expertise of specialized service providers, offering them enhanced capabilities in transportation management, cost control, and scalability (Hammami & Ghanem, 2024).
Coca-Cola Nigeria, one of the leading beverage manufacturers in the country, faces logistical challenges, particularly in remote regions like Taraba State, where infrastructure constraints, geographic distances, and fluctuating demand can impact operational efficiency. Taraba's unique economic and infrastructural environment creates both opportunities and challenges for Coca-Cola, as it seeks to expand its market presence while maintaining a competitive edge. Understanding the effects of logistics outsourcing on Coca-Cola's operational efficiency in this region can offer valuable insights into how the company manages supply chain challenges and improves service delivery.
This study seeks to investigate how Coca-Cola Nigeria's decision to outsource logistics operations impacts its operational efficiency in Taraba State. By focusing on the company's logistical activities, this study will provide insights into the benefits and challenges associated with outsourcing and its implications for Coca-Cola's supply chain management.
Statement of the problem
Logistics outsourcing has the potential to improve operational efficiency, but its success is contingent upon how well the outsourcing arrangements are managed. Coca-Cola Nigeria has outsourced significant portions of its logistics operations, but it remains unclear how this decision has impacted the company’s performance in Taraba State. Given the region’s unique challenges, such as inadequate infrastructure and the distance from major distribution hubs, Coca-Cola must rely on logistics partners who can effectively navigate these hurdles. While outsourcing offers potential benefits, including cost savings and enhanced flexibility, the true effects on operational efficiency in this region are not well understood. This study addresses the need for a deeper understanding of how outsourcing logistics impacts Coca-Cola’s operational efficiency in Taraba State.
Objectives of the study
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To examine the effects of logistics outsourcing on Coca-Cola Nigeria's operational efficiency in Taraba State.
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To evaluate the benefits and challenges Coca-Cola Nigeria faces in outsourcing logistics in Taraba State.
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To analyze the impact of logistics outsourcing on Coca-Cola Nigeria’s supply chain performance in terms of cost, speed, and reliability in Taraba State.
Research questions
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How does logistics outsourcing impact Coca-Cola Nigeria's operational efficiency in Taraba State?
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What are the benefits and challenges Coca-Cola Nigeria encounters when outsourcing logistics in Taraba State?
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What is the impact of logistics outsourcing on Coca-Cola Nigeria’s supply chain performance in Taraba State?
Research hypotheses
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Logistics outsourcing significantly improves Coca-Cola Nigeria's operational efficiency in Taraba State.
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Coca-Cola Nigeria experiences both benefits and challenges as a result of outsourcing logistics operations in Taraba State.
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Logistics outsourcing has a positive impact on Coca-Cola Nigeria’s supply chain performance in Taraba State, improving cost efficiency, delivery speed, and reliability.
Scope and limitations of the study
This study will focus on Coca-Cola Nigeria’s logistics outsourcing practices in Taraba State, assessing its effects on operational efficiency and supply chain performance. Data will be gathered through interviews with Coca-Cola’s logistics managers, third-party logistics providers, and local distributors. The study is limited by its geographic scope, focusing exclusively on Taraba State, which may not fully represent Coca-Cola’s operations across Nigeria.
Definitions of terms
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Logistics outsourcing: The practice of hiring third-party service providers to manage some or all of a company’s logistics operations.
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Operational efficiency: The ability of an organization to deliver products or services at the lowest possible cost while maintaining quality and customer satisfaction.
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Third-party logistics (3PL): A service provided by external logistics companies that handle transportation, warehousing, and distribution on behalf of another company.
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