Impact of Outsourcing and Other Factors on Logistics Performance in FMCG Sector of Pakistan

Abstract

Purpose: The purpose of the study was associated with the assessment of the effect of the different risk factors along with outsourcing on the logistics performance of the FMCG sector of Pakistan.

Design/Methodology: The research design of this study was quantitative; therefore, the researcher used a survey questionnaire for the accumulation of the data from 256 respondents related to the FMCG industry of Pakistan. Therefore, the data collection method in this research was primary through close ended questionnaire. Data was analysed using Structural Equation Modelling (SEM). The variables that were taken as independent were cost reduction, product quality, product variety, supply chain integration, and outsourcing. The dependent variable of the study was logistics performance.

Findings: As per the findings, the constructs of product quality and cost reduction were found to be a significant while, other variables that were product variety, supply chain integration, and outsourcing were found to have an insignificant impact on the logistics performance of FMCG sector of Pakistan.

Research Implications: The management of FMCG sector needs to work on automated systems which can reduce the cost improving the profitability. In addition, product quality can also be improved with the help of automated systems as it will reduce the likelihood of human error. Originality: This research addresses the research gap in the context of Pakistan’s FMCG sector along with the inclusion of the variables that have been discussed in a limited scope.

Keywords: Supply Chain, Logistics, FMCG Industry, Pakistan Outsourcing, Quality