Abstract:
The authors aim was to undertake a comparative study on how using third party logistics can
deliver distribution efficiency and its contribution to competitive advantage for organizations.
The study adopted a descriptive research design with a sampling frame of 50 companies
operating in Kenya. Primary data collection method was used through mail questionnaire. Data
was analyzed using Statistical Package for Social Sciences (SPSS) package version 14. The
article addresses key issues related to third party logistics, why organizations decide to
outsource, advantages and disadvantages of third party logistics, their impact on distribution
efficiency in the Fast Moving Consumer Goods Companies in Kenya. Results based on the
analysis of data relating to 50 Companies in Kenya showed that the use of third party model is
effective in enhancing delivery of products to the customers premise. Moreover, organizations
have a high chance of minimizing costs while maximizing their revenue from the use of third
party logistics. Further, Third Party Logistics has the potential of improving customer
performance in meeting consumer needs. The scope of the study was limited as it only focused
on a small data set of 50 Kenyan FMCG companies. The generalization of results to other nonFMCG
companies or even to all African countries ignoring potential organizational/regional
differences arose as the two limitations of the study. In a time when companies are outsourcing
noncore competencies, the study recommends that organizations recognize the potential
contribution of 3PL firms and take advantage of opportunities to address organizational needs. It
is evident from the findings of this study, Companies should be aware that 3PLs provide an
opportunity for an increased competitive advantage. Through their unique position and evolving
capabilities, 3PLs can be seen as strategic players in a supply chain management as opposed to
mere vendors of a given organization.
