An Exploratory Study of the Strategic Use of 3PLs for Cost Reduction and Customer Satisfaction in the Oil and Gas Industry: Nigerian Firms’ Experience
This paper investigates perspectives and trends in the outsourcing of logistics functions by Nigerian oil and gas firms in order to further comprehend the impact of deploying 3PLs on performance, particularly with regard to cost-savings and user-firm’s satisfaction. The research participants are mainly top management staff consisting of managers and supervisors in charge of areas of logistics, supply chain and procurement. A total of seven (7) oil and gas firms listed in the directory of oil companies in Nigeria took part in the study. The study adopted a quantitative approach, gathering data through the administration of an online questionnaire survey, and resultant data consequently analysed. Findings show that oil companies in Nigeria mainly outsource in order to gain cost-savings (through price-reduction) in procuring logistics operations, financial stability and opportunity to use the expertise and skills of 3PLs. Results indicatethat outsourcing of logistics has a significant impact on overall firm’s performance, with particular relation to the level of improved productivity, organisational effectiveness and acquisition of new customers. However, given hesitation by some stakeholders, 3PLs in the Nigerian market are expected to improve upon their current services in order to attract more patronage. On the whole, firms outsourcing services showed optimism that using 3PLs will continue to generate a positive impact on the performance of their organisations.