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Title: Impact of Logistics Outsourcing Strategy in Oil and Gas Industry in Uganda

Article Number: EC/2015/001


Topic: Management


The article is an attempt to look at outsourcing as an element of Strategic Cost Management (SCM). The article looked at the various definitions of outsourcing from various authors and concluded that it is involving third party for the supply of non-core factors of production rather than instead of manufacturing itself.  The idea of outsourcing generally stem from the fact that firms always put themselves in competitive advantage as cost reduction is one of such drivers  of outsourcing.  With the supply of such materials to be outsourced constituting mostly logistic services, which basically include transportation, storage and warehousing as well as value addition can go to a long extend to determine firms’ restructuring  in terms of dissemination network and competitive advantage.

Generally, the oil and gas industry is a global market, making competition the order of day while the Ugandan economy (including oil and gas industry) is developing necessitating the occurrence of conventional strategic and competitive tendencies to make firms developed. The logistic outsourcing for a firm in the oil and gas industry in general and in the Ugandan market specifically will make suppliers (contractors) to contribute significantly through technology as the sustenance of the Supply chain will be specialization.

 The article proved that Logistic Service Providers (LSPs) in the supply chain aids both the flow of information and goods across each segment, it will also improve customer relations and service satisfaction with the LSPs.  

It can be concluded that the aim of the article is the impact of logistics outsourcing as a strategic management in the Ugandan oil and gas industry with the perception of firms in relation to the benefits and challenges. It also portrays how to mitigate the challenges as well enumerate the services provided by using selected managers and staff of both the firms in the market and the LSPs


    COMMENT - 1

  • EKEMINI TITUS AKPAN (Viewer) 30th Jan 2015 - 8:10 AM

  • COMMENT - 2

  • VASEEM KAMALUDDIN SHAIKH (Viewer) 30th Jan 2015 - 7:37 PM
    The article mentioned about Uganda, but same is applicable to other countries and other industries also. The approach and the importance of Logistics Outsourcing strategy is well explained by Alexandrei and Jurandri.
    1. Operating cost can be reduced considerably through proper logistics and supply chain management.
    2. A large proportion of costs in a typical business are driven by logistics decisions and the quality of supply chain relationships.
    3. For enhanced margins, many companies are taking a new look at the way they manage the supply chain.