Abstract:
The research study is principally focused on Ghana Oil Company Limited on the outsourcing of transportation function to a service provider for the purpose of ensuring effective and efficient distribution channel. 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 objectives of the study are to identify the rationale(s) behind the outsourcing decision of the outsourcing company and to identify the benefits and challenges associated with the outsourcing the transportation function by the outsourcing company. The target population for the study was 150 employees which include functional managers of GOIL in Kumasi in respect to their nature and attributes. The study was based on sample size of fifty (50) employees of GOIL in Kumasi. The method employed in the collection of data was through the use of questionnaires and interviews. It was discovered that outsourcing logistics activities which is a contractual service has become relatively stable in developed countries while it is a rapidly growing and emerging in developing countries like Ghana. It was found that although companies are reluctant considering outsourcing some of its operations, the most obvious reason behind outsourcing logistics activities was 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. Although outsourcing comes with some challenges and difficulties, the findings of the study were backed by recommendations which would aid the company in its operations.
