University essay from Blekinge Tekniska Högskola/Sektionen för management

Author: Thywill Dzogbewu; [2010]



ABSTRACT The study has revealed that Guinness Ghana Breweries Limited has been outsourcing it logistics activities more than four years. The rationale behind the outsourcing activities is to cut down cost and enjoy first class service from specialist using the most suitable, quick and reliable technology. The company has actually increased its revenue margin consistently for the past four years and has enjoyed other benefits like: timely delivery and overall quality improvement. Its logistics service providers have also enjoyed benefits like: consistent profit growth rate, transformation of superiority into competitive pricing through economics of scale, improvements of staff skills through efficient training and continuous exposure to new technologies and best practices in the industry. The main problem encountered by the logistics service providers is that they are not been paid on time. It also came to light that Guinness Ghana Breweries Limited have build a very good business relationship with its service providers which have enable it to maintain good logistics service providers and switch to a new one if the need arise. It was discovered that outsourcing logistics activities which is a contractual service has become relatively stable in the developed countries while it is a rapidly growing and emerging in developing countries like Ghana. It was noted that the most obvious reason behind outsourcing logistics activities is to provide very effective means of reducing costs, better services, improving operating efficiency, flexibility and getting access to new suitable technologies easily at a lower cost. Outsourcing, therefore, has increasingly becomes an important strategy that can significantly assist organizations to leverage their skills and resources to achieve greater competitiveness. However, there are risks of becoming over dependent on service providers.

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