Assessment of Logistics Service Outsourcing of the Organization:the Case of Libya Oil Ethiopia Limited
Creators: name: Ayele, Atsede
Publisher: name: National Academic Digital Repository of Ethiopia
Year: 2016

description: In the operation of the company, the development of logistics takes the largest part on its day-to-day operation in fuel retail business in Ethiopian oil retail industry. Third party logistics companies play a vital role to the operation and distribution of fuel in the country and contributes to the economic growth of the country; we can say logistics is on its infant stage in Ethiopia. Likewise, in LOEL, logistics in fuel retail business is the largest operation of the organization's overall performance and in Ethiopia as well; it constitutes more than 50% of the total operation since the company operates mainly on distribution of oil and fuel business, which is the time and place value of logistics. Recently the performance of outsourcing logistics business in Ethiopia has increasing. Almost all oil companies use outsourced logistics service in their operation. However, the challenges of its collaboration, safety and business awareness is mentioned on many instances with the transporter and company management, monthly joint meetings and joint consultations. This research is attempted to describethe outsourced logistics performance of the company in the case of Libya Oil Ethiopia Limited. The scope of the study is assessment on the performance of logistics of Libya Oil Ethiopia Limited in relation to third party logistics service providers. The unit of analysis is assessment of logistics in the case of Libya Oil Ethiopia Limited in relation to its outsourced logistics performance. Semi-structured interview was undertaken to obtain primary data and archival data and some printed and non printed data are used as secondary data. The study adopted a descriptive research design. Therefore, it has a great significance to look in to the performance of and its outsources logistics providers to gain a competitive advantage over the competitors. The study also delimits its scope to the performance of aviation fuel, which has the highest rate applied to its margin by the Government of Ethiopia, and the volume is higher compared to the other bulk products. Moreover, any gain or loss on stock is directly accounted to the company's account. From the secondary data it is observed that the logistics performance has contributed a lot to the loss of about 30 million on the past 5 years in association with price change/decrease declared by the Ministry of Finance and Economic Cooperation last update on letter dated Miazia 28, 2008 E.C with Ref. No. 011.22.9/1. The result of the assessment also shows that outsourced logistics performance has contributed to the logistics performance of the company. However, the safety issue, the driver's behavior in association with adulteration, responsiveness, lack of professionalism and lack of management efficiency in the side of the providers affect the company's logistics performance negatively. The study recommended that the company should exert more effort to diversify their portfolio mix by having some backup trucks from within, in case of crises, and by trying to convince the government office at least any loss should not account to the company on the agreed 500mc safety stock