Effects of Cash Flow Management on Logistics Out Sourcing in Large Manufacturing Firms

Abstract

Factors affecting logistics outsourcing in large manufacturing firms in globalized and highly competitive markets, has led to organizations striving to be innovative and agile to meet customer demands. Competitiveness, based on organizational capabilities and production strategies, may lead to quality, efficiency and flexibility. The objective of the study was to analyze the effects of cash flow management on logistics out sourcing in large manufacturing firms; and to determine the effects of distribution management on logistics outsourcing in large manufacturing firms.   The study applied a descriptive research design. The target population consisted of 512 employees whereas the sample size was166 employees. The study used primary data which was collected through self-administered questionnaires that consists of both open and closed ended questions. The data was analyzed using both descriptive and inferential statistics.  The results revealed that established a positive weak correlation between cash flow management and logistics outsourcing (p = 0.247). The study concluded Cash flow management was an aspect which was investigated in the study; the findings concluded that with proper flow of cash the company is able to outsource the logistics required. The study recommended that; manufacturing firms should put more focus on core business functions and ensure reduction of overhead costs. They should take advantage of expertise and experience and put measures to improve internal capabilities and expertise. The firms should reduce the total overall costs and where third party logistics providers provide a better service contract them.

Keywords: Cash flow management, Logistics out sourcing