Outsourcing Logistic Activities in Karachi (Pakistan)

Outsourcing Logistic Activities in Karachi
A thesis submitted
By
Muhammad Meraj Hussain (4095)
To
Department of Business Administration

In partial fulfillment of
The requirement for the
Degree of
MASTER OF BUSINESS ADMINISTRATION
In
Supply Chain Management
This thesis has been
Accepted by the faculty

FACULTY OF BUSINESS ADMINISTRATION

Mr. Syed Ali Raza
Advisor

Mr. Tehseen J awaid
Deputy Director Academic & Research
Outsourcing Logistic Activities in Karachi i
Acknowledgement

Indeed I am grateful to the creator of mankind the Almighty ALLAH who graced me to
accomplish this study.
I am very much thankful to our respectable teacher Syed Ali Raza who bestowed me with the
opportunity to undertake this thesis. His continuous support, helpful guidance, perspective
judgment, positive criticism and focusing on excellence enable me to complete the study in its
comprehensive form.
I owe to thank my parents for their full assistance and enthusiastic support which encouraged me
to go forward throughout my study. Without whom I would not be able to complete my study.
In the last but not the least I want to express my thanks to my elder brothers and the friends who
esteemed me during the course of my work and gave motivation.
Outsourcing Logistic Activities in Karachi ii
Table of Content

Acknowledgement: ................................................................................................................. i
Abstract: .............................................................................................................................. iii
Chapter 1: .................................................................................................................................. 1
1.0 Introduction: .....................................................................................................................2
1.1 Background: ................................................................................................................. 2
1.2 Problem Statement: ...................................................................................................... 4
1.3 Research Objectives: ................................................................................................... 5
1.4 Research Questions: ..................................................................................................... 5
1.5 Scope Of The Study: .................................................................................................... 6
1.6 Limitation Of The Study: ............................................................................................. 7

Chapter 2: .................................................................................................................................. 8
1.1 Theoretical Backgroud: ................................................................................................ 9
1.2 Emphirical Study: ....................................................................................................... 11

Chapter 3: ................................................................................................................................ 20
3.1 Research Approach: .................................................................................................... 21
3.2 Reseach Purpose: ........................................................................................................ 21
3.3 Reseach Design: ......................................................................................................... 21
3.4 Data Source: ................................................................................................................ 22
3.5 Target Population : ...................................................................................................... 22
3.6 Sample Size: ............................................................................................................... 22
3.7 Data Collection Technique: ........................................................................................ 23
3.8 Sampling Technique: .................................................................................................. 23

Chapter 4: ................................................................................................................................ 24
4.1 Research Question 1: .................................................................................................. 25
4.2 Resaeach Question 2: .................................................................................................. 32
Outsourcing Logistic Activities in Karachi ii

Chapter 5: ................................................................................................................................ 42
5.1 Conclusion: ................................................................................................................. 43
5.2 Recommendation: ....................................................................................................... 44
5.3 Future Recommendation: ........................................................................................... 45

Chapter 6: ................................................................................................................................ 46
6.0 Bibliography: .............................................................................................................. 47

Appendices: ............................................................................................................................. 49
Outsourcing Logistic Activities in Karachi iii
Abstract

The purpose of the research is to reveal the influence of the Third Party Logistics providers
(3PL) for the Power Energy Industry in Karachi (Pakistan). Criterion of the conducting
interviews was limited to managerial rank therefore a reliable and additional outcomes could be
obtained. Interview has been conducted from operational and supply chain persons belonging to
power energy companies. Sample size of this research links with the total number of interview
conducted. Interviews were performed on participants of five power energy companies in
Karachi (Pakistan). Presently, Pakistan has around 500 gas/diesel/petrol generator manufacturing
units. The power generator manufacturing industry meets around 50% of the country's demand.
In order to boost the power energy sector the national industries have to escalate the production.
The research will be assisting in determining the importance of 3PLs in the area of power energy
in Karachi (Pakistan). As compared with the past researches, this research has some limitations.
The research has been conducted in Karachi (Pakistan) rival with the carrying it out in greatest
crowded regions of the states. This research has been completed in a restricted period of 4 to 5
months.
Keywords: Karachi, Outsourcing, Logistics, 3PLs, Rental Power, Transportation, Operation

Management.
Muhammad Meraj Hussain Outsourcing Logistic Activities in Karachi 1

CHAPTER # 1
Introduction
1.0 Introduction
The simple philosophy of this study is to reveal the influence of the Third Party Logistics
providers (3PL) for the Power Energy Industry in Karachi (Pakistan). This part concisely
explains an outline of the research. Being the exploratory section of the research paper, the
present section contains the exploratory summary of the study. It will be a nonprofessional
emphasis on the history of the study and clearly recognizes of the justification for undertaking
this study.

1.1 Background
Growing to the sources worldwide, distribution, production or manufacturing, companies in
modern era need to adopt the logistic managing approach to given right direction of their dealing
procedures. The logistics models implementation has progressively powered the entrepreneurs to
emphasis on the main significant business activities and simultaneously to shift their
transportation as well as supplementary functions of logistics to 3PLs. The outcome in a growing
demand of activities of logistic which has created, during previous eras by establishing a global
developing marketplace wherein proficient services provider which are entitled as a third party
logistic services (3PL) provider. Currently that has been brought to light that successful logistics
managing depends to a greater extent on performance of the third party logistics. Therefore, the
3PLs may perform the strategic integral part in activities of logistics through the managing of
sharing information and associated along the complete distribution of supplies. This has
generated intensifying requirement to maintain consumer logistics needs from beginning to end
the effective and efficient application of IT and sharing information.

Bendor-Samuel (1998) proclaims that a constructive supremacy is achieved through outsourcing

which is not achieved within an organizations inner branches. Such a supremacy having several
dimensions for example, economies of scale, method of knowledge, approach to resources, and
costly technologies, etc. An additional, potential advantage is that outsourcing offers the
companies through better capacity for flexibilities, particularly in buying of rapidly emerging of
new technology, fashion items and numerous multifaceted systems components (Carlson, 1989;
Harrison, 1994).
Some benefits to use the third party logistics outcome of economies of scale (quality for the large
vehicle fleet, warehouse, etc.) as well as economy of scope, which help firms in increasing the
overall value by sinking cost. Results for such economies vary in the category of 3PLs facilitator
(based on IT, market-supported, and non-asset based, etc.). Proficient third party provider has
high coordination capability, assisting them to locate the reliable partners, and professionally
managed movement of merchandise between firms. This capability may be developed by
proficient third party logistics.

When the firms outsource their logistic activities, firms also save the capital investment and
lessen the financial risks. Financing on logistics resources, for instance physically distribution
center mostly requirement for large as well as lump sum budgets, which contains financial risks
on the part of an entrepreneur. Moreover, the third party logistic provider can extend these risks
through outsourcing to subcontractors.

Now the developed nations, transportation carriers as well as logistics services provider remain
increasing their facilities into several regions which conventionally support to the clients forward
along with bottom-stream. These subcontract trends are vast challenges for operators on the other
hand also an unlimited chances for extending base of their professional actions. In order to
become competent in succeeding those innovative services efficiently, substantial prerequisites
are set upon developing of the correct procedures, competence of collaboration and using of
advanced IT base system.

The expansion of transportation, information has risen opportunities for worldwide business and
its very common that the companies engaged in global business frequently need to outsourcing
logistic activities, as they cannot execute global logistics on their own. The need of effective
service for companies and operational competence from logistics service providers includes the
reducing of uncertainties related by logistics outsourcing, from now the risks reduction
procedures must be implemented using logistic outsourcing.
The global freight forwarding business appeared in Pakistan in early 1980s. Initially, the
industry contained only several organizations and concentrating on niche market that emphasis
on the freight of plants and equipment for the rising weaving division of the textile industry,
domestic stuffing companies sustenance families re-locating foreign and multilateral agencies
provided food supplies under aid or disaster programs.

1.2 Problem statement
Although many study works have been done on topic of logistic outsourcing activities
throughout the world that examine the influence of 3PLs on business performance*.

To cope up
efficiently the demand in power energy sector the industries manufacturing power energy units
*Aktas and Ulengin (2005)
must be adopting the 3PL outsourcing. The 3PL is the cornerstone procedure for escalation in
outsourcing of logistics functions in the present and long-term future for enhanced business
outcome and supply chain competencies. Several other researches supported this outcome and
highlighted on achieving significant performance enhancements by attaining customer
satisfaction and reducing logistic expenditures*. But no study has been made in the power
energy sector. Thus, there is need of studying and exploring the possibilities and efficacy of
outsourcing in power energy industries in Karachi (Pakistan).

1.3 Research Objective
The core idea of this specific research is to explore the factor of 3PLs on the rental power energy
industry in Karachi (Pakistan) in relationships of their use in transportation, warehouse,
operation and manufacturing canopies, but emphasizing mainly on transportation factor. The
study is conducted to distinguish the impact, benefit & demerits of 3PL on whole performance of
power energy industry in Karachi (Pakistan).
1.4 Research Questions

1. What are the factors influences to adopt 3PLs in power energy industry in Karachi
(Pakistan)?
2. What are the benefit and drawback of logistic outsourcing in the context of power energy
industry?

*B. S. Sahay and Ramneesh Mohan, 2006

1.5 Scope of Study

Pakistan has an incredibly dynamic and forward looking power energy industry. At the time of
freedom in 1947, there was hardly any such industry in the state. Today Pakistan has around 500
gas/diesel/petrol generator manufacturing units. The power generator manufacturing industry
meets around 50% of the country's demand. The Pakistan power energy industry is relatively
young having no international markets. Components of power generating units are exported
from international market.
In order to boost the power energy sector the national industries have to escalate the production.
This will help minimize the miseries of people of the country facing due to ever increasing
energy crisis.

Although Pakistan's power generating sectors are expanding and evolving rapidly, but in fact
about half the population of the country has no access to modern facilities of power generation.
Because of increasing population, alarming shortfall of power energy, the role of power
generating sector has turn out to be vital in fulfilling power shortfall up to the needs. This has
found to be much critical job for national companies to fulfill the ever rising demand and cope
up with the power shortfall challenge one handedly. As such the factors of influencing or the
means of 3PLs may be used to function competently and successfully in this difficult area to beat
the difficult job. The research will be assist in determining the importance of 3PLs in the area of
power energy in Karachi (Pakistan). The research gives the guiding principle to the power
energy industry as well as the outsourcing firms to re-examine their long term plan and revamp
the business strategy, if required.

1.6 Limitations of study:

As compared with the past researches, this research has some limitations. The research has been
conducted in Karachi (Pakistan) rival with the carrying it out in greatest crowded regions of the
states. This research has a part of the Master of Business Administration program which one
obliges is to be completing in a restricted period of 4 to 5 months of the semester. It required to
consuming maximum personal effort and accompaniment resources. Finally, only five power
energy firms were contacted for interviews.

CHAPTER # 2
Literature Reviews

2.0 Literature review

2.1 Theoretical background:
Logistic controlling the movement of resources among the place to origin to place of destination
in order to several conditions the resources accomplished in logistics may involve physical
stuffs, for example food items, fabrics, raw materials, machineries, fluids, along with
nonconcrete items for example, period of information. The logistic tangible items generally
include the integrated information movement, materials control, manufacture, packing,
warehouse and safety.
Producers, distributers and retailers who outsourcing their activities to save the time and
lessening cost, outsourcing logistics procedures to a 3PLs, improve the outcome for both retailers
and producers with the help of accurate and proper management. Therefore, outsourcing shrinks
the demand for expensive property to keep inventories. 3PLs propose their expertise to
producers; distributers and shipper should improve their quality, productivity, achieve economy
of scale and reduce entire delivery costs.
J . Bowersox et al (2005) Although a few firms opinion logistics outsourcing mean is to shrink
cost, on extremely wider base it can be also helpful in controlling risk. From a cost point of
view, outsourcing logistic assists to shrink cost for the reason that most of the companies that
suggest outsourcing logistic activities are non-unionized. Therefore unionized productions can
shift to material managing, transportation, warehousing activities to logistic facility provider at
lesser salary rate. Outsourcing logistics can move the supply chain risk through the allocation of
supply chain function with the partner which can be advantageous to economies of scale,
expertise and opportunity. Especially, supply chain partner mainly emphasize on a supply chain
function for instance carrying, warehousing and handling expertise may alike complete the
responsibility with fewer risk and lesser cost. Outsourcing logistics also shrink risk through
joining the volume across a number of clienteles, result in minor risk of not being capable to
gather customer orders due to a spill out.

Wang and Regan (2003) Merits of logistics outsourcing activities
Expand the focus of company
firm to able to concentrate on core activities and core capabilities
money infusion
Vending resources to 3PLs provider
Access to outstanding competencies and new technology of logistics system
Eliminating extra resources
No principal investments for logistic s
Non-availability of internal resources
Enhanced reengineering advantages
Lessen and regulate operating costs
Abolish labor hazards
Shifts responsibility to third party logistics provider
Combining of the risk
Sharing of technology cost investment by clients with 3PL provider
Better service achievement and getting the benefits of economies of scale

2.2 Empirical Studies:

Kumar et al. (2012) examine that whole solution outsource logistics difficulties in medium scale
organization by base in case study in 3PLs provider. They use solution approach CFPR and
VIKOR method. Results indicate that cost efficient is the key objective of 3PLs and organization
must be outsourcing their logistic activities. They conclude that enlarged framework is valid only
to medium scale organization such as automobile. They suggest companies must be proper share
information about your desire creating alliance with 3PLs providers.
J untunen and Autere (2012) examine the security interrelated outsourcing approach for public
sector and armed and related logistics results through conducting survey and data from 149
respondents. They use lisrel software. Results point out that negotiating command and
relationships did not concern direct cost into public sector and armed perspectives, but the
negotiating command and relationships associate with progressive service which result reduce
indirect cost of logistics service. They suggest that armed and public sector should keep
sufficient transportation capability to meet possible emergency, which need them to protect a
reliable and well implementation long term relationship with logistic service providers.
Rahman (2011) observe the level to where 3PLs outsourced Australian companies by
questionnaire analysis carried out in Australia. The model was taken from firms included in Dun
& Bradstreets 500 biggest Australian companies. Banks and different monetary firms, insurance
firms and real estate business were not included in the list of companies and overall 210
companies were recognized. Result indicates that the degree of satisfaction on 3PL service
contractors is above at 86 percent and revealed in the sign to continue to utilize in the future.
They recommend the most commonly used logistics activities are warehouse handling,
fulfillment of order and managing of fleet. The prime three issue that motivated the companies to
outsourcing was to reduce cost, decreased capital investment, and improved operational
elasticity.
Rahman and Fim (2011). Examine the differentiate with chins manufacturers-cum-suppliers in
their logistic provide to dissimilar local & foreign customers and find management area that
should address in order to satisfying the logistics requirements of customers by conducting
questionnaire based survey. They use five point likert scale test. Result indicated the foreign
person place significant importance on different service from those of local counterparts, and lots
of address by the manufacturer with respect human resource, customer service, integration of IT.
They recommend that need to improve their logistics services and give the efficient and effective
logistic service to satisfy foreign and local customers.
Hsiao et al. (2011) examine the factor influence to outsourcing of different category of logistics
activities in Taiwan food industry by conducting survey to filled questionnaire. They use per-test
technique. In their study they selected four variables; level 1 transport, level 2 packaging, level 3
transportation management and level 4 distribution networks. Result indicates that outsourcing
approach of companies in subsector varies; milk sector outsourcing is repeatedly than the meat
sector on top of first three levels; while milk companies give emphasis to flexibility and
reliability. They suggested further need to improvement logistics activities especially on
transportation management and further investigate other types of food organization.
Carballosa and Tarres (2011). Examine to outsource logistics intentionally reasons and construct
close knit relation with 3PL providers by base in case study of third party logistic in Spain.
Result indicate the main reason are; why companies suggest to outsourcing logistic, which type
to relationship they construct with provider and how much attachment in management of their
SCM. They conclude that the majority companies go on outsourcing their logistic activities basis
of cost and strategically. They suggest that 3PLs provider need to expand the services offer and
incorporate a wider variety of movement from logistics chain and companies build an alliance
with third party logistic provider.
Hilletofth and Hilmola (2010), examine effects of sub-contracting logistic in Northern Europe. In
their study they conducted survey in industrial and service sectors. They using hypothetical test
and got the significant result about IT, warehouse and customer negotiator outsourcing have
impact on managerial & strategically aspect of SC and build in-house IT function and would be
outsource warehousing. They recommend that should be produce IT in-house and outsource
warehousing system, organizational need more integrated application for logistics operation.
Gotzamani al. (2010), observe that several companies have know potential benefits expended
through the high quality of logistic service which provide internally or externally by 3PL service
and this research focus on outsourcing logistic services & decision to chose the best supplier
base on quality management & financial criteria by conducting survey and got 66 sample of
manufacturing and 3
rd
party logistic companies. They use statistical inference test, cluster
analysis and hypotheses test. Result indicates the positive relationship b/w quality and financial
performance for third party logistic provider. They recommend that outsource their logistic to
third party logistic provider for the reason that 3PL provide higher quality of logistic service.
Hilletofth and Himola (2010) examine the effect of outsourcing logistic in Europe by conducting
survey and filled the questionnaire. They use Likert scale analysis. Result indicates that the
company direction and strategies having significant impact outsourcing logistics. They conclude
that customer brokerage, IT and warehouse outsourcing might be impact on managerial and
strategically point of supply chain. They suggest the in-house IT is playing important role and
additional integrated application are required when outsource warehousing activities.
J uga et al. (2010) examine the perceived service quality convince together shippers satisfaction
and successive loyalty in 3PL logistics outsourcing relationships by conducting survey of 235
industrial companies. They use one-way analysis (ANOVA). In their study they select three
variable 3PL service quality, Buyer satisfaction and Buyer loyalty. Result indicate that
satisfaction and loyalty model in outsource logistics perspective proving that service perception
persuading loyalty by shippers overall satisfaction among service provider. They suggest that
3PL providers identify the value of service quality in outsourcing relations and expand the
capacity of outsourcing arrangement require looking at on different basis.
Tian et al. (2009) study of Third party logistics facilitator customer oriented and customer
company logistics development in China by survey-based approach and gather data from upper
management at the 124 manufacturing client companies. They use hypothetical relationships.
Results indicate that 3PL provider client orientation considerably persuade client companies
logistics development. They conclude that Chinese 3PL contractors to upgrade and enlarge
service contributions, 3PLs having a powerful customer orientation make important value for
clients through better execution on main factor of logistics service.
Tate and Ellram (2009) examine the current managerial framework to facilitate successful
contractor selection moreover continuing supervision for purchase service contractors from
offshore by using multiple case studies. They conclude that the assortment and managing of
supplier for buying outsourced offshore services that considered in character facilitate
organization and make sure quality with less cost in deliverance of services moreover it
minimize the complexity and risk related to business. They recommend that success in the
activities of prospective offshore function need the carefulness and knowledge about possible
risks, and also need collaborating and emerging alliances with offshore providers.
Soinio et al. (2009) the aim of the research to grouping the perceptions of logistics facility
provider and smaller and middle size enterprises in improvement of value added logistic facility
by conducting planned interview. The results indicate that the structure for grouping logistics
service for smaller and middle size enterprise and suggests innovative logistics facility models
for smaller and meddle size enterprise clients. They recommended that this effort suggested that
the logistic facility provider to improve their facility offering to greater matching the need for
smaller and meddle size of enterprise, in addition to allow manager for smaller and meddle
enterprise to best utilization the existing logistic facility provider capability and service.
Cho et al. (2008) examine the factor influence of logistic ability and logistic outsourcing going
on firm performance in e-commerce market by conducting survey. They use hypothetical test.
Result indicates that logistic ability to be effectively connected to company activities in e-
commerce marketplace. They conclude that effective and efficient sub-contracting logistics on
the association among logistics ability and firm performance was not constant. They suggested
that if the company has weak internal logistics ability should forgo in-house logistics services
and embrace third party support.
Sohail et al. (2008) examine the impact of 3PL service in UAE by experimental study and
conducting survey and discover; level of usage logistic service, period or usage, decision making
process, consequential impact on organization. Result indicate that above 90% industries are
satisfy with 3PLs and consider 3PL logistic service is favorable about cost, timely delivery and
customer satisfaction. They suggest that here is need to overcome information sharing gap such
as lead time, stock level and efficient use transportation.
Solakivi et al. (2008) examine the present situation of future opportunity concerning the practice
of the outsource logistics functions in small and middle size enterprise, and also examine the
measure the relationships among logistics outsource, costs & performance, monitory
performance by using financial data. They use ANOVA and factor analysis. The results indicate
that transportation activity are exceptionally outsource, the majority of companies not outsource
your order processing, and partially of them havent outsource your IT structure. They conclude
that collaboration of information internally and externally mandatory for outsourcing logistic
activity and when manage strong collaboration you will gain unexpected benefits from material
management and value added services.
Maelah et al. (2008) examine the training, judgment, procedure and observation of threats and
control in accounts outsource by conducting survey via questionnaire at 51 companies. The
results indicate that the mutual outsource activities are monetary reporting then audit and
inspection although the core purpose to excellence service, main capabilities and economy of
scale and also conclude that mostly firms outsource their groundwork of accounting and
inspection work. They recommended that the accounts and audit service provider emphasis on
the client and protect their data to any spy through providing high quality service, here is lots of
future opportunities to grow accounting outsource providers.
Power et al. (2007), examine to where clients distinguish the logistics service contractors in the
case of reaching of the claim benefit of logistic outsourcing by conducting survey and using
hypothetical test H1:, H2: and H3. The findings give enough support for all three hypotheses,
and especially show that clients of 3PLs put a important significance of the outsourcing
facilities. They suggested that clients observe a focal point on work based result as it is an
significant feature of 3PL services giving a set of advantages away from simple cost
management.
Boer et al. (2006) examine the factor effect direction in the early phase of outsourcing process
although enchanting the decision makers hurdles rationality by base on case studies. In their
study they focus on appear to difference between the prescriptive outsource models and process
observe in practices. Result indicate that prescriptive and practical models give the direction for
outsource decision making this is correct outsourcing in broad-spectrum and logistics outsource
activities in particular. They suggest that the managers use more practical tool for making
structure to an essentially random process.
Lau and Zhang (2006) examine the causes that encourage organization to outsourcing in china
and these companies looking difficulties with compare to developed countries by conduct
interviews. Results indicate the economical factor is influence to outsource which cost cutting,
saving cost and reduce capital investment and further shows the problems facing in outsourcing
such as need to proficient services provider, failure of control, poor carrying and information
technology infrastructure. They suggest that the organization should be clearly defining their
expectation, build up strategy to outsourcing and making right decisions to reach outsourcing
object.
Aktas and Ulengin. (2005) examine the present position of outsourcing logistic activities. Turkey
has a huge potential for logistic activities due to its geographical position by conducting
investigation for 250 of the biggest 500 Turkish companies. They use factor and cluster analysis.
In their study they select three variables; overall sales quantity, profit earning and monetary
performance. Result indicates of mostly firms their logistics function has outsource, some firms
has total logistics function has outsource; some general and transportation function has
outsource. They suggest an effective and efficient SCM need to enhancing of products change
from unfinished material to finished goods for the clientele and also need to professional experts
to coordinating logistics service.
J iang and Qureshi (2005) observe the gaps among the implementation of outsourcing and
companys performance metrics by conducting survey and also analyze case study. They use
hypothetical test. In their study they focus three areas; outsourcing effect, outsourcing method
and outsourcing determent. Results indicate three major gaps in current circumstances: require
goal of the metrics for outsourcing effect assessment, need to explore on the relationship
between outsourcing execution and firms worth, and need to explore on the outsourcing
agreement itself. They suggest that firms has needed to overcome the gaps between their desire
result and 3PL providers by sharing information about their logistic activities. Firms must be
upgrade and properly manage in-house IT system.
Wilding et al. (2004) Examine the three key of logistic outsourcing. 1) Why to outsource, 2)
what to outsource, 3) what to outsource and how to managing satisfaction in 3PL provider
partnership by using mixed approach written questionnaires and interviews and also use
statistical method regression. In their study finding is, cost factor playing a main role and
performance measurement system increasing difficulties for outsourcing in consumer goods
industry. They recommend that 3PL has created positive impact on companys performance
specially on cost but required proper sharing information to 3PL provider.
Seuring (2003). Focused the outsourcing SCM in chemical industries they examine the strategic
outsource logistics integration problems have increased considerable attention in current years
base by on case study. In their study search in five case studies from the chemical industries a
division of two types of companies may be viewed. Results indicate that product manufactures
build up into multinational companies by operation sites about the world organize successfully
integrated SM and all function of the business that product manufactures would like to
outsource. They suggest that need to new type of integration among the two kinds of companies
to recognize the major and supported activity may be controlled by separate companies.
Manufacturers did not run their business exclusive of the facility providers.
Sankarn et al. (2002), examine the uncover managerial approach into effective logistics
outsourcing that are appropriate to New Zealand. In their research they conduct interviews from
different organization. They conclude that the third party provider refraining from premature
monetary commitments is an instrumental variable in the effectiveness of 3PL. They recommend
that the outsourcing of logistic minimize the cost, reducing capital structure and satisfy the
customer.
Rabinovich et al. (1999) examine the 3PL providers has increasingly develop into a powerful
substitute to traditional vertically integrated firm by conducting survey of 372 in different
industries. They use co-relation analysis. Result indicates the relationships of firms and 3PL
logistics are significant. They recommend that the firms can give better customer service and
shrinks cost by outsourcing various logistic function.


CHAPTER # 3
Methodology
3.0 Methodology
3.1 Research approach
Patton (1990) a qualitative study is a type of analytical study. The phenomenological research is
focused on explanation about what the public experience and how they come to experience it.
One may employ a common phenomenological perception to explain the significance of using
methods which capture global public experience without carry out a phenomenological research
that emphasize on the spirit of shared experience. The present type of study is qualitative for the
reason that it is conducted to describe the problems, issues and advantages of 3PL and obtains
the solutions for importer and 3PL providers.

3.2 Research Purpose
The author says the method of research is qualitative and emphasize on the reason of carrying
out this study to discover particular latest findings. Therefore, determination of the present study
is an exploratory. Involvement of the logistics outsourcing business activities in the prospect of
Karachi (Pakistan) being a struggle for discovering the importance of growing value of 3PLs,
specifically in power energy industry.

3.3 Research Design
Rossman and Rallis (1998) present study is based on phenomenological objective.
Phenomenological study is conducted based on the personal understandings with participant.
Participants share their knowledge done with through interview, verbal and or written and
describes in their own wording. Participants would be permitted to contribute and explain their
knowledge devoid of any kind of dictation, guidance or direction. The researchers responsibility
will be to excerpt the phenomena for sharing experience through the participant excluding all
favoritism, partiality and dislike. The base of the present study stands on gathering information
by the open ended question asked from participants. Detailed interview with the concern persons
were conducted and the linked information were then excerpt for the taped interviews. The
outcome of the research is based on the phenomena that providing from participant during the
thorough interview.

3.4 Data Source
The data source for this study is primary, because of the reason that the information and facts
were gathered through the participants own experience. Criterion of the conducting interviews
was limited to managerial rank therefore a reliable and additional outcomes could be obtained.
Interview has conducted from operational and supply chain persons belonging to power energy
companies.

3.5 Target Population
Power energy industry is the greatest dynamic industry in Karachi (Pakistan). Therefore, an
emergent tendency comes for third party logistics are obviously throughout the world. Therefore,
a target population of the research will be importer and 3PLs provider serving power energy
industry in Karachi (Pakistan).
3.6 Sample Size

Sample size of this research links with the total number of interview conducted. Interviews were
performed on participants of five power energy companies in Karachi (Pakistan). Firms which
share the part in this study are R.A Energizer & Services (pvt) Ltd, Allied Engineering and
Services Ltd, National Power Services and Smart Power system.

3.7 Data Collection Technique
There were several forms to collected data in phenomenology study like explanation and
interviews of the phenomena. Present this study interview is the reliable technique to collect the
data therefore the researcher follow the detailed interview procedure for gathering information
from professionals respondents.

3.8 Sampling Technique
McNamara (1999) Purposive sampling method is subsequent the relevant persons experience by
the tool of interviews. To collect the results more important, the relevant peoples mandatory is
why interview has been organized, those interviews that are available without any difficulty and
behave as responsible. Several respondents refer to other persons, who were suitable to response
according to type of the study. Interviews procedure is so extended, but now we have to succeed
these interviews.


CHAPTER # 4
Results Analysis

4.0 Data Analysis

The themes of data analysis are created by phenomenological approach of qualitative research
technique. The following information have been take out from detailed interviews of operation
and supply chain persons of four rental power companies in Karachi, Pakistan
Research Question 1:
4.1 What are the factors influencing to adopt 3PLs in power energy industry of Karachi?
4.1.1 Cost Reduction
Respondent-1: Maintaining logistics activities require a huge investment. The capital
is stuck on logistics to a big extent resulting in increase of overall cost.
In fact, no genset company can target a large market alone. As such
almost all companies are moving towards logistics outsource to
maintain the competitive cost. On the other hand, it costs high in
maintaining own logistics. Then, we will not be able to target the huge
market.
Respondent-2: Logistics is a hidden activity in our business. Our business type is
genset and not the logistics. To maintain logistics also an additional
capital is required. Logistics activities need expertise and extra human
resource. It expands the capital expenditure, when every company
want to focus only on their core business. For which we need
outsourcing the logistics activities.
Respondent-3: Every entrepreneur has its own worth to run the power sector. If we
maintain our own logistics, it cost us very high. On the other hand, if
we outsource logistics activities, the cost is much less. Every company
desired a smooth growth with less cost.
Respondent-4: We are operating on a large scale. We have a huge transitions for
distance areas in which generator sets are moving from one place to
another. This movement is within the city and outside; from one
province to another province. In this situation, if we maintain our own
logistics, it would cost very high. We would have to bear the cost of
truck, crane, labour and the operation of the entire logistic activities.
So we prefer to outsource our logistics.
Author: In power generation business cost of logistics is an important factor.
For which a huge capital resource is required. However, the company
who has large volume of business, they go to maintain their own fleet
through which they fetch extra revenue besides their core business. On
the other hand, a company who has limited volume of business, they
like to outsource their logistics to reduce the cost. In fact, the logistics
operation is not limited to transportation, but it involves, heavy crane,
heavy vehicle, extra labor for loading and unloading, trouble-shooting,
manufacturing of canopy and wire, etc. Besides, providing the after
sale service.

4.1.2 Assets Reduction:

Respondent-1: We have not such an investment that we can cover all such activities or
it may be said that we can survive in the market. Through logistics
outsourcing we reduce our assets so that we can survive in the market
and can focus to our core business.
Respondent-2: As because our business volume of generator set is manifold as
compared to other companies, we maintain our own logistics.
However, if we handle all business activities at our own, it will cost
high. So we outsource some of the business activities. It brings our
assets to a minimum at the one hand, and our business flourish on the
other by concentrating to our core business.
Respondent-3: We outsourced many of our business activities only to reduce assets. If
we expand the assets, it means, we are increasing the continued cost. It
brings the cost of generators very high.
Respondent-4: Our main business is supply generator sets. If we increase our logistics
assets, the cost also increase. An increase in assets will result in
increase of an overall cost including crane, truck, labour, etc. On the
contrary, we will be benefited if we make such investments to our core
business.
Author: Every entrepreneur wish to reduce their assets because there happened
to be a continuous cost in logistics, which the company has to bear.
Such investment if made to the core business a company can earn more
revenue. This is because the entrepreneur has the expertise in generator
set rather the logistics.

4.1.3 Financial Positions:
Respondent-1: To improve the financial position we outsource logistics. The capital is
stuck when a company invest in own logistics. As a result, in the event
of a big demand, the company cannot avail the opportunity.
Respondent-2: It depended on the volume of business. If the business volume is large,
we can invest in logistics. Because, earning of return of investment
begins, immediately. While, if a small entrepreneur invest in logistics,
they will lose because of their low volume of business. On the
contrary, if they outsource logistics, their position remained stable and
can achieve the market target.
Respondent-3: There are two things, one is that how big is the business, secondly, how
much and when the entrepreneur gets the return. If the business is not
broad based, and investment in logistics has been made and its return is
slow, then it is a loss. The outsourcing is done to evade the financial
loss.
Respondent-4: The financial position will only be strong when the hidden activities are
outsourced, rather stuck the money by investing in it. Hidden activities
are not only the transport, but, the crane labour, etc is also involved. A
complete management is involved.
Author: The outsourcing is not only gives strength to the financial position, but
also it helps to meet the increasing demand in the market.
4.1.4 Focus on core business:
Respondent-1: If we own logistics activities, we should have to face many problems.
When engaged in sorting out such problems, we would not be able to
focus on the core business efficiently.
Respondent-2: The basic benefit of outsourcing logistics is that we can give full time
focus on the core business. We would be free from the hazards of
logistics problem.
Respondent-3: The field of logistics outsourcing is vast which is not so easy to sum up.
So, if we begin to handle the logistics also, then we would be going
away from focusing on the core business and other problems and issues
surround us. To remain free from all such issues we outsource the
logistics.
Respondent-4: We outsource logistics, because, it is not so easy for all to run own
transport system in a country like Pakistan. There is a mafia working
behind the transport business. If we are entangled in such issues, we
cannot focus on the core business.
Author: Because of the fact that it is a very costly and difficult job to run
transport or carry out the logistics activities in Pakistan, so if the rental
power do not outsource the logistics, it cannot focus on their core
business.

4.1.5 Beneficial in Bad Law & Order Situation:
Respondent-1: The situation in Pakistan is not so favorable that a company can run its
own fleet. Specially, in Karachi it is a very risky. For this reason, most
of the companies outsource their logistics activities.
Respondent-2: When we talk about adopting or outsourcing logistics, the main reason
is worsening situation of law & order in Pakistan, specially, in Karachi.
To carry generator set on own fleet is twice risky. We outsource
logistics to deploy the generator sets from one place to other without
facing the risk factor.
Respondent-3: Outsourcing is beneficial for us in Pakistan because the law & order
situation in Pakistan ever worsening. In such situation it not good to
run own fleet. Because, when the situation worsen vehicles on the road
are first target.
Respondent-4: There is a big mafia working behind it, which is not allowing to run
own transport system. The other reason is that when situation worsen
the large vehicles are targeted. So to run here own fleet is not a right
job. By outsourcing logistics, we become mind free that our generator

sets will some how will reach its destination whatever the law & order
situation may be. The 3PLs would fulfill their responsibilities whatever
the situation may be.
Author: The 3PLs is beneficial, especially in Pakistan because there are so
many restrictions and problems in traffic. Due to which the rental
power companies find it difficult to run their own fleet. Secondly, the
ever worsening law & order situation in Pakistan, especially in Karachi
city an entrepreneur fear to run its own fleet. God forbid, if the
situation worsen the genset and the vehicle may be damaged. Taking
into account all aspects it beneficial for rental power to adopt logistics
outsourcing.

4.1.6 Customer satisfaction:
Respondent-1: Customer satisfaction is very important thing in our business. We tell
our customer not to look only at our product but also the services we
offer. In order to survive in the market, it is essential to look after the
customer satisfaction. Our logistics partners play an important role in
the customer satisfaction. We depend on our 3PLs in it.
Respondent-2: In our field of business, importance is given to the services. Our
growth is not only depended on product itself. It included on time
delivery, and after sale service which we outsource, is very important.

We have our certified vendor and professional for which the number of
our customer is increasing day by day.
Respondent-3: There is such a completion in market that if customer is not satisfied
with our services, the business may be lost. If a customer demanded
something and we are unable to respond on time, then he goes to other
competitor in the market. For this reason we have hired 3PLs.
Respondent-4: The main reason of our market success is customer satisfaction which
our logistic partner did ensure. In generator set the 3PLs can deal with
the complaints so efficiently which we cannot do, because, they have
the expertise.
Author: As the power sectors have no in-house logistics, the company cannot
solve the customer complaint in time. The other reason is the lack of
expertise. The last reason is heavy investment. The power sectors
outsource their logistics activities which include the loading, unloading
and dealing with customer complaints. So the 3PLs has become the
backbone of the industry.

Research Question 2:
4.2 What are the benefit and drawback of 3PLs in the context of power energy industry?
4.2.1 Improve company focus and core competencies:
Respondent-1: If we own logistics activities, we should have to face many problems.
When engaged in sorting out such problems, we would not be able to
focus on the core business efficiently.
Respondent-2: The basic benefit of outsourcing logistics is that we can give full time
focus on the core business. We would be free from the hazards of
logistics problem.
Respondent-3: The field of logistics outsourcing is vast which is not so easy to sum up.
So, if we begin to handle the logistics also, then we would be going
away from focusing on the core business and other problems and issues
surround us. To remain free from all such issues we outsource the
logistics.
Respondent-4: We outsource logistics, because, it is not so easy for all to run own
transport system in a country like Pakistan. There is a mafia working
behind the transport business. If we are entangled in such issues, we
cannot focus on the core business.
Author: Because of the fact that it is a very costly and difficult job to run
transport or carry out the logistics activities in Pakistan, so if the rental
power does not outsource the logistics, it cannot focus on their core
business.

4.2.2 Access to World Class Capabilities and New Logistics
Respondent-1: The big advantage of logistics outsource is that we dont have to make
heavy investment. We can avail world class logistics by paying
minimal charges. So we need not make heavy investment.
Respondent-2: With outsourcing we take the advantage of using advanced type of
crane with which make the loading and unloading easier without any
damage to our generator set.
Respondent-3: A big advantage of outsourcing is that we have not make investment
and we are using the advanced technology through which our customer
is benefited. The complaints from customer are less.
Respondent-4: By experiencing globalization our logistics partners are improving
themselves which is also advantageous to us. In short we can say that it
brings dual advantage to customer as well as the partners.
Author: In the face of globalization we are making all efforts to make the
logistics services better, and efficient exerting a direct impact on power
energy sector and benefitting with the world class logistics.
4.2.3 On Time Delivery:
Respondent-1: Through outsourcing logistics, we make it sure that our generator set
will be reaching the destination in time. If timely delivery is not done,
we lose our customer. For this reason, we have hired 3-4 vendors
whose areas have been divided.
Respondent-2: In the start, we were working with only one vendor which created great
problem in timely delivery of generator set. In our business, the on
time delivery is an important factor. To resolve the issue we hired
different vendors through which we have ensured an on time delivery to
the customer. Besides this, we are also using our own fleet because we
have a large business volume.
Respondent-3: Our main problem is on time delivery. We have overcome this problem
to a great extent by dividing our vendors region-wise. We have hired
multiple vendors who have enough expertise.
Respondent-4: Observing the condition of Karachi, it seemed very difficult to solve
this problem as because we were working with a single vendor. But by
this time we have 4-5 vendors who ensure it that they will make timely
delivery to our customers.
Author: The logistic outsourcing, make it sure that there will be an on time
delivery. For achieve this purpose, a multiple vendor system is
necessary who can look after our different regions. Their expertise is
another very important factor.
4.2.4 Customer Satisfaction:

Respondent-1: Customer satisfaction is very important thing in our business. We tell
our customer not to look only at our product but also the services we
offer. In order to survive in the market, it is essential to look after the
customer satisfaction. Our logistics partners play an important role in
the customer satisfaction. We depend on our 3PLs in it.
Respondent-2: In our field of business, importance is given to the services. Our
growth is not only depended on product itself. It included on time
delivery, and after sale service which we outsource, is very important.
We have our certified vendor and professional for which the number of
our customer is increasing day by day.
Respondent-3: There is such a completion in market that if customer is not satisfied
with our services, the business may be lost. If a customer demanded
something and we are unable to respond on time, then he goes to other
competitor in the market. For this reason we have hired 3PLs.
Respondent-4: The main reason of our market success is customer satisfaction which
our logistic partner did ensure. In generator set the 3PLs can deal with
the complaints so efficiently which we cannot do, because, they have
the expertise.
Author: As the power sectors have no in-house logistics, the company cannot
solve the customer complaint in time. The other reason is the lack of
expertise. The last reason is heavy investment. The power sectors

outsource their logistics activities which include the loading, unloading
and dealing with customer complaints. So the 3PLs has become the
backbone of the industry.

4.2.5: Eliminate Labor Problem:
Respondent-1: When we outsource our logistics we save in extra labor and the
problem related to it, like train them how to load and unload the
generator set, positioning, besides being relieved of dealing with the
labor. All such responsibilities are shifted to vendor.
Respondent-2: When we hire labor from local market, they being an unskilled worker,
the chances of damages are increased. In case of outsourcing logistics
to 3PLs, the chances of damage are minimized, because of the fact that
shifting of generator set from one place to another is difficult job, for
which an expertise is required.
Respondent-3: By outsourcing the logistics we are relieved of cost of training of labor
and monthly salary, etc. When a demand comes we need labor for
handling the generator set. In case of outsourcing we get the services
of skilled labor automatically who can do the job efficiently.
Respondent-4: When we adopt outsourcing, we avail the opportunity of assets
reduction and at the same time reduction in labor. This way, we get
relieved of labor problem, because it becomes costly to maintain the

extra labor. In outsourcing logistics, we get the skilled labor at a
minimum cost.
Author: When the labor is hired from local market, it is generally, unskilled. It
creates problems in loading and unloading besides the chances of
damages. By adopting 3PLs, we can get skilled labor that ensuring us
to get free from matters of problem. As such, the trends of outsourcing
logistics are increasing in the power sector.

4.2.6: No capital Investment:
Respondent-1: We have not such an investment that we can cover all such activities or
it may be said that we can survive in the market. Through logistics
outsourcing we reduce our assets so that we can survive in the market
and can focus to our core business.
Respondent-2: As because our business volume of generator set is manifold as
compared to other companies, we maintain our own logistics.
However, if we handle all business activities at our own, it will cost
high. So we outsource some of the business activities. It brings our
assets to a minimum at the one hand, and our business flourish on the
other by concentrating to our core business.
Respondent-3: We outsourced many of our business activities only to reduce assets. If

we expand the assets, it means, we are increasing the continued cost. It
brings the cost of generators very high.
Respondent-4: Our main business is supply generator sets. If we increase our logistics
assets, the cost also increase. An increase in assets will result in
increase of an overall cost including crane, truck, labour, etc. On the
contrary, we will be benefited if we make such investments to our core
business.
Author: Every entrepreneur wish to reduce their assets because there happened
to be a continuous cost in logistics, which the company has to bear.
Such investment if made to the core business a company can earn more
revenue. This is because the entrepreneur has the expertise in generator
set rather the logistics.
Drawbacks:
4.2.7: Leakage of Sensitive Data and Information
Respondent-1: One of the great drawbacks is that the information does not remain
secure. Our logistics partner knows about our customers and also about
the strength of our business. If it is passed on to our competitors in the
market, it is feared that our business may be lost.
Respondent-2: There are competitors dwelling in the market are either strong or weak
than us. The logistics partner is not working only with us but with our
competitors also. Now if our logistics partner leaks about our weakness
to the competitors then they can easily beat us in the market. So we
think it as a great drawback.
Respondent-3: When logistics service provider pass on any information to its
competitor, the first partys loss is imminent. But we dont share the
secret information with our logistics partner. Because we apprehend
that our information does not leak to the competitor.
Respondent-4: Normally, we didnt experience such thing, but we dont disagree that
such things do happen in our business and there are certain examples of
the fact. Actually, when a demand comes, it is an open bid and who
ever qualify the requirement they get it. But if our logistics partner is
aware of our weakness, then our competitors can get the demand before
it come to us.
Author: When outsourcing is discussed in rental power business, the mostly of
the companies found afraid of information leakage, because they
having been earning a good profit out of a demand. So the a company
never afford to passage of their business detail to their competitors.
Moreover, a company would not like to let their competitors know
about the customers they are dealing with. In that it is imagined as a
drawback of outsourcing.
4.2.8: Emergency Response
Respondent-1: Sometimes we received such a demand which we should have to fulfill

on an urgent basis and we do call our logistics partner. In such
situation we often find ourselves helpless when the partner is found to
be busy elsewhere, or there is a labor problem.
Respondent-2: Often we do have to sustain business loss due to the logistics provider.
It is so that when we have to make an emergency delivery they are not
found available at the time, resulting in losing the customer.
Respondent-3: We cannot make ourselves dependent on the logistics provider,
because, often the customer call us for a rental on urgent basis, and
sometimes we cannot fulfill the demand due to non-availability of our
in-house logistics rather we were outsourcing it.
Respondent-4: When we outsource our logistics, we find ourselves on the mercy of the
logistics provider as the logistics activities are carried out by them. If
they do not respond on an emergency, we have to call another vendor
who basically remained busy with providing logistics to other
companies. As a result we would be unable to fulfill the requirement.
Author: Emergency response is such a problem which is somehow difficult to
solve. As for example, when the fleet is available, but no crane is
available, even if crane is available there comes labor unavailability. In
the growing demand of rental power, it is often required to make a
quick delivery to customer, which the logistics provider fails to carry
out.

CHAPTER # 5
Conclusion &
Recommendations
5.0 Conclusion & Recommendations

5.1 Conclusion:
Pakistan is facing troubles of rising population, terrorism besides the energy crisis. To overcome
mainly the power crisis problems, a rental power energy sector plays the vital role. Therefore,
rental power industry has become important in providing the energy requirements to the people
of Pakistan. It has become complicated for a national power sector to meet ever rising demand
and deal the additional challenges alone. Thus the outsourcing (3PLs) tool maybe used to work
effectively and efficiently in this demanding era to overcome the energy crisis.
The outcome of this research show that the outsourcing logistics activities is very vital and worth
appreciated to improve and augment the overall performance rental power sector in Pakistan.
Third party logistics is adopted by all national, multinational entrepreneurs ranging from large,
medium and small who are engaged with to build up their business operations.
The research shows that all the rental power companies recognize the importance of third party
logistics. The increasing of their rental energy supply efficiency with the help of 3PLs by
shifting the responsibilities of loading, unloading and transporting the gensets, are more focused
on their core business, i.e, supply and marketing of generator sets.
The 3PLs provide opportunity to the rental power sector to reduce operational costs and
investments. The savings from this reduction of cost and investment is utilized in developing of
new products and improve the quality of the existing generator sets. Rental power companies are
also improving the skills of their employees and using their human resource in more efficient and
dynamic ways.
The 3PLs is very helpful in delivery of the generator set on time with minimum lead time. The
enhancement of service level and quality of the genset helps in gaining customers satisfaction
and reliability and resulting in enhance their revenues and profits with the help of third party
logistics.
The most important finding of this research in the context of the situation in Pakistan is that the
third party logistics has enormous advantage. In the face of worse energy crisis situation, when
generator sets are needed more than any other thing, the third party logistics deliver those
generator sets in the different areas of the country and help to save the precarious condition of
the industry faced due to power crisis.
As the power infrastructure in certain areas of Pakistan is not very developed especially in the
rural areas, so the rental power companies are reluctant to have their own logistics assets. The
3PLs perform their services to deliver the generator sets all over the country and help fulfill the
need of power energy.

5.2 Recommendations:
In view of this research, following are the suggestions which can be recommended to the rental
power industries with respect to involvement with third party logistics.
The decision of selection of 3PLs should be very cautious and adequate.
A rental power entrepreneur should consider four criteria, i.e, speed, safety, cost and
expertise before involving the third party logistics,.
Vending with more than one party for logistics outsourcing is preferred because in case
of any failure of providing services by one party the another could be approached so that
the core business of the company is not disturbed.
It is better for a rental power company to hire local transporters. It helps to make
delivery operations more efficient and safe.
A rental power industry should be fully engaged with the 3PLs and should monitor their
logistics activities very closely.
Skilled labor and advanced crane mounted vehicles are the essential part of the successful
operation in rental power sector. So the rental power industry of Pakistan should take
into consideration to manage the dealings with third party logistics.
In Pakistan, there is a low perception of 3PLs activities due to the lack of skilled
manpower and advanced vehicles. Rental power companies should implement advanced
information technologies like, Tracker system, ERP, and SAP, etc. to keep an efficient
follow up of all 3PLs activities.
5.3 Future Recommendations:
This research is based on one industry, i.e, rental power industry. It is recommended for future
researchers to study the role of outsourcing logistics on the performance of other industries also.
The study has been conducted in Karachi city of Pakistan. The scope of this research can be
stretched in future and the same study can be conducted in other areas of Pakistan and rest of the
under developing countries of the world. Some questions might not be answered adequately due
to companys own policy. The answers of such questions should be sought in future for more
reliable results.

CHAPTER # 6
Bibliography

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Appendix-A
Interview 1:
An interview was conducted with Mr. M. Rahim Memon, Manager Sales & Operations of
National Power Services (NPS), Karachi with regard to the Outsourcing Logistic Activities
undertaken by the Company. This interview was a part of the requirement for preparing thesis on
the subject of Outsourcing Logistic Activities. The interview was managed with the help of Mr.
Hammad, Sales Manager of the company. According an appointment was set with Mr. M.
Rahim Memon, who very kindly spared his time for this interview.
Researcher: As-salam alaikum, sir!
Respondent-1 Wa-alaikumus-salam. Have your seat, please.
Researcher: Sir, I am Muhammad Meraj Hussain. I came from the Iqra University where I am
doing my MBA in the area of Outsourcing Logistic Activities undertaken by
different industries in Karachi. So sir, can I have the privilege of asking some
questions in this area of activities in your esteemed industry.
Respondent-1: Ok, I am also glad to see you at our company in pursuit of your endeavor. I
would be glad to answer the queries you need from us pertaining to your field of
study.
Researcher: Thank you sir, may I now start by asking about the Factors influencing the 3PLs
on the whole performance of power energy industry in Karachi?
Respondent-1: The 3PL is an influencing factor in power energy because there are big companies
and entrepreneurs which are looking after their corporate sector. On the other
hand the small entrepreneurs are limited to the local markets. But at the same
time they endeavor to target the corporate markets. Local companies target the
small entrepreneurs and also investing their resources to provide outsourcing to
these small entrepreneurs.
Not a single entrepreneur can cover the huge market. As such the big companies
also share the market activities with small entrepreneurs by outsourcing some of
their operations. A small entrepreneur fulfills demand of the end users. The 3Pls
actually provides a bridge between the entrepreneurs and end users. At the same
time it sorts out the operational issues. To sort out the issues of end user is an
important factor which the large entrepreneurs cannot handle. Consequently the
companies outsource the issues to be sort out by the small entrepreneurs.
Researcher: How long your company is outsourcing. Is it outsourcing some or the entire
operational activities?
Respondent-1: Some of the activities we handle ourselves and some is outsourced. We handle
the demand of 500 KVA generators at our own. Beyond this capacity we use
outsourcing, e.g for 7500KVA, 1250KVA generators.
Researcher: Why you resort to outsourcing or what the factors compel you to take up the
outsourcing?
Respondent-1: We have limited capital investment. So we cannot cover the market demand but
still we have to survive. Hence, we resort to outsourcing. For example,
sometimes we need qualified experts which demand additional investment. Here
we manage the needed expertise through outsourcing.
Researcher: whether the logistic cost is shrink or increase through outsourcing? Are the
logistic services handled by your company?
Respondent-1: We outsource the logistic services. We deal only with the end-user for our
product cost which included logistics. In this way we gain some profit margin in
addition to fidelity of customer with us. Moreover, delivery is carried on time.
Researcher: Which logistic function do you outsource?
Respondent-1: The logistic functions we outsource are: operational staff and power cable. As
regards warehouse, we have made a joint venture with a company to utilize the
same warehouse.
Researcher: What are the factors considered when deciding for logistic service provider?
Respondent-1: We consider most the availability of transport on time and service quality. We
always stress on service quality. In power sector the quality service is a very
important factor. It competes in market with other companies as regards to
service price. We are now in a position to expand our business. Moreover, we
also look at the factor of which service provider is carrying out the loading and
unloading more safely and without any loss to the products/items. With such a
timely and safe logistic service we have no complaints about delivery of products
from our clients.
Researcher: Selection and evaluation of benchmarks for performance of 3PL contractors?
Respondent-1: The first benchmark is that the supplier will not negotiate in any matter with the
customer directly. The supplier will only consult in all matters with the company.
Secondly, the contractor will provide an uninterrupted logistics operation so that
no problem is faced by our clients. For example, if the supplier provides end-user
with sub-standard material, it will eventually create problem to our business.
Thirdly, we consider upon the services cost. The cost for logistics though a little
higher but our clients are satisfied with the efficient services then we will prefer
it. If the 3PLs fulfills our first two requirements efficiently then we dont give the
third benchmark much significance. Out 4
th
requirement with the 3PLs contractor
is as to how much they know about our industry. Whether their operational staff
is well educated and how much they do cooperate with our clients.
Researcher: What are the benefits and detriments of logistics outsourcing in the context of
power energy industry?
Respondent-1: The major drawback in 3PL is that our information is disclosed to others. Our
information remains unsecure to the competitors. The competitors can guess our
strength and weakness. So the company cannot totally depend on the 3PLs.
Some time we cannot respond to an emergency order from our clients due to
delay on the part of the contractors.
Researcher: Sir, I think I have covered all my queries now. I thank you very much for
extending your kind cooperation by sparing your valuable time for me in the
pursuit of my studies.
Respondent-1: Its all ok. I wish you every success in your venture of higher studies.

Interview 2:
An interview was conducted with Mr. S Zeeshan Kazmi, Regional Sales Manager (South) a
Caterpillar Certified Sales Professional of ALLIED RENTAL MODARABA, Karachi with
regard to the Outsourcing Logistic Activities undertaken by the Enterprise. This interview was a
part of the requirement for preparing thesis on the subject of Outsourcing Logistic Activities.
The interview was managed with the help of Mr. Hammad, Sales Manager of NPS. According
an appointment was set with Mr. S Zeeshan Kazmi, who very kindly spared his time for this
interview.
Respondent-2: Wa-alaikumus-salam. Have your seat, please.
Respondent-2: Ok, I am also glad to see you at our company in pursuit of your endeavor. I
would be glad to answer the queries you need from us pertaining to your field of
study.
Researcher: Thank you sir, may I now start by asking about the Factors influencing the 3PLs
on the whole performance of Rental Enterprise like yours in Karachi?
Respondent-2: Let see, I think there are three to four factors involved in this area. Firstly, most
enterprises try to keep a limited capital expenditure. The transportation logistics
is not their core business, because their type of business is something different.
Whether it is Rental or Power Generation business, the enterprises need to
outsource these wide activities of transportation. They do not invest in
transportation activities by acquiring transport, crane, etc. Moreover, neither they
have the expertise in this area nor the manpower. It is also important to
understand the volume of such activities. Every enterprise have different volume
of operational activities. Therefore, the outsourcing depend upon the volume of
operational activities. For example, the Allied Rental, generally, do not
outsource. It perform almost all the business activities at their own, i.e, 90% to
95%. It is because the volume of business of Allied Rental is extensive. For the
list 20 years we catered the logistics through outsourcing. But with the increase
in business activities, we have established a fleet of transport including trucks and
cranes. Taking into account the daily volume of business, it seemed that we will
at revenue loss if we outsource this area to another party. Rather, we can earn also
by operating our own fleet of vehicles. Our cranes remain busy after catering to
our daily need of 3 to 4 jobs. This gave us extra earning by providing outsourcing
to another enterprises who have only 4 to 5 jobs a month. These companies
would not like to invest to have their own vehicles and cranes which will remain
idle for most of the times by creating a capital expenditure. The main point is that
in what sector of business an enterprise would like to undertake outsourcing. The
main area is the revenue or number of jobs. If an enterprise have higher number
of jobs and they manage a pair of vehicle, it will be pay off in short time. It is
estimated that within 4 to 5 years it will pay off the invested cost. It is anticipated
that our enterprise will recover the investment of fleet in 3 to 4 years.
Researcher: Sir, you just said that you were sustaining loss by outsourcing the logistics. Can
you highlight the nature of loss? While the capital is shrink by adopting 3PLs,
besides an enterprise can focus on their core business effectively.
Respondent-2: No, we were not facing a direct loss; in fact we were losing indirectly. There was
no revenue loss. The indirect loss was such that we could manage the logistics
with a limited investment at our own. To comprehend the phenomenon you have
to go into the background of Allied Rental which is one of the pioneers and the
old leading enterprises. We are also a trend setter. Beyond other things you will
see that we have a very big pool employee. We have the capacity to deploy a
small fleet of vehicles very easily. You can train the manpower to utilize them in
the operation of providing outsourcing to other enterprises. We realized it 3-4
years before and then we began gradually to develop our own fleet. In the first
phase we purchased two truck mounted cranes. Such cranes, gave us dual
advantage of loading and unloading the generators with the help of mounted 10
ton crane. So now we realize that our growth of business activities has boosted
during 3-4 years through self managed transportation fleet. As such we need not
outsource our logistics to 3 PLs.
Researcher: Sir, would you highlight the benefits and drawback of logistics outsourcing?
Respondent-2: The ultimate benefit is achieving a new business dimension of outsourcing with a
company creating a new source of revenue which we have achieved. No other
entrepreneurs have experience this sort of business. As such we stand as a trend
setter in introducing logistics management besides our core business. We provide
logistics to other companies also. Though we were sustaining an indirect revenue
loss in previous years, we have recovered it and a positive result has been
achieved. As we discussed earlier, within 3-4 years the pay off of investment is
imminent. Such a time for gaining pay off is a good sign of achieving the return
of entire investment.
As far the drawbacks, first, you have to make investment. Next come the issues
of road dimensions which include accident, and the law and order situation of the
city. You have to face all the risks and handle such hazards including
maintenance, etc. While outsourcing the logistics you have nothing to loss. We
have indulged in a huge investment in acquiring new cranes. If we had invested
such amount in our core business, it would have given us opportunities of growth
in business because we have the expertise in it. Besides, another drawback is that
when we outsource our logistics, the information did not remain confidential. Our
business information is venerable leaks out to other competitors which can be

harmful by giving us a tough time in the market.
But as we are doing our in-house logistics operation ourselves, it gives us the
advantage of self deployment.. At the same time, in fact, we are handling the
deployment of other parties in the market sometimes also. It goes in our favour to
handle the logistic operation for other companies. But, it may be a drawback for
other companies, as their business secrets may be leaked.
Researcher: Sir, when you were outsourcing your logistics activities did you faced issue of
loading and unloading of generators, like of risk of accident or damage, etc?
Respondent-2: See, such probability always exist and it is a part of this field of operation. You
can never rule out such things. Whenever, you outsource or not your logistics
activity, it is not relevant that you have zero chance of accident or damage, in
both the cases. In both cases, there are chances of loss of any extent. However,
when a company performs its own logistics activities there is a confidence of
having less chance of accident or loss. Because the people involved in the
operation were the companys employees who were amicably trained. But when
a company outsources the logistics, there exist no such advantage. Accordingly,
when we were outsourcing logistics, we were sustaining much damage losses.
Moreover, there also happened mishandling of equipments. We again, emphasis
the outsourcing of logistics may be counted as a disadvantage. Because the
operation not handled by trained staff of the company itself. The equipment may
not be properly handled by unskilled manpower.
Researcher: Sir, can you explain the selection and evaluation of benchmarks for the
performance of 3PLs contractors?
Respondent-2: See, there are some benchmarks are such that are changing as per your deals, as
per your clients, and as per conditions on your side. Sometimes you have to make
changes in your benchmarks. There cannot be a standard benchmark for every
deployment and for every deal. Now see, one thing is very important that every
customer has its own profile. Some are multi-national companies, e.g, Oil & Gas.
So there is different safety measures and protocols to be maintained. If we divide
it in three categories, like one the A-rated customer, second the B-rated customer
and third the C-rated customer. It means that the company which is related to Oil
& Gas sector, like British Petroleum, PNI, is the A-rated companies. It is given
the top line because their safety standards are very high. So, when we ourselves
undertake their job or outsource the logistics, we have to set benchmark,
accordingly. There should not be chance of error or a minor flaw in maintaining
standard safety. This is called an A-rated customer. The B-rated customer, as I
understand, is the normal multi-national companies, like, Unilever, P&G. Such
companies have the safety standard high or better in comparison to standard or
local companies. In case of these companies while deploying equipment health,
certificate, driving license are checked. Certificate of driver to the effect that
either he is capable to run this equipment or not. Medical fitness certificate of
staff carrying out the job is also checked. All such records are verified and then
they are permitted for the job to undertake. Now we come to the C-rated
customer.

Interview 3:
An interview was conducted with Mr. Rao Zakaullah Khan, Sales & Service Manager of
SMART POWER SYSTEMS (PVT) LTD, Karachi with regard to the Outsourcing Logistic
Activities undertaken by the Enterprise. This interview was a part of the requirement for thesis
on the subject of Outsourcing Logistic Activities. The interview was managed with the help of
Mr. Hammad, Sales Manager of NPS. Accordingly, an appointment was arranged with Mr. Rao
Zakaullah Khan, who very kindly spared his time for this interview.
Respondent-3: You are most welcome, I am glad to see you at our company in pursuit of your
study. I would be glad to answer the queries you need from us pertaining to your
field of study.
Researcher: Thank you sir, may I now know about the factor influence to adopt 3PLs in power
energy sector in Karachi?
Respondent-3: As I can see, the main factor is that outsource is adopted in consideration with the
worth of capacity of the company to the run the power sector. Whether the
company hae the capacity of 100 generators, 300 generators or 500 generators.
At present, we have the capacity of 120 generators. With such capacity, if we
involved in operating our own logistics, it would be rather cost effective. Because
of purchasing cranes, trucks and maintaining it at our own would make the
business operation at a high level. The cost will go high. For this reason we have
to involve 3PLs which provide us the transportation, loading and unloading.
Researcher: Which are operation functions you do outsource?
Respondent-3: Among the business operations in power generation, one is the transportation,
then the crane for loading/unloading which we do have to outsource. For
example, when the company has no transport of its own then the 3PLs is involved.
The other important aspect is that when a new generator comes to us we have to
hire the services of a vendor who perform the job of putting the generator in a
canopy through transport, crane, etc.
Researcher: Have you outsourced the canopy or you manufacture the same?
Respondent-3: No, the canopy is not outsourced item. We manufacture it in our own workshop.
Researcher: What are the benefits and the drawback of logistics outsourcing in the context of
power energy industry?
Respondent-3: J ust look, the big problem in 3PLs is the time factor. When we call them, it takes
time. Their movement is so slow that if we call them at 9:00 AM, the 3Pls people
will at least reach at 12:00 to 1:00 PM. For which we suffer a lot. Sometimes due
to such delays we have to lose the business. This is a big loss to us. However, for
the internal movement from one yard to another yard we dont have such problem
in hiring transportation. It didnt matter if the delay is for an hour or so. But
when the delay occur in transporting the generator to a place of installation by the
vendor, it create problem. As we are operating the business, we ever face such
problems. The 3PLs provider gives various reasons for the delay, like, traffic
jam, tire puncture, this and that, etc. We are trying to overcome this problem.
We think this is our weakness rather the 3PLs. We can contact with two or three
3PLs vendors and call a meeting to discuss the matter of delay on their part by
which the company has to suffer. We can highlight the fact to them that while the
company is paying them for their services, why should company sustain loss due
to the delay in transportation on their side.
Researcher: When you share the business information with a 3PLs, do you think it is safe. Is
it not fearsome for you that your data may reach to your competitors in the
market?
Respondent-3: Let see, the first thing is that we dont work with such trustless vendor. We
emphasis our vendor of the fact that it is a business and whatever link they have
grown with other party they must be loyal to us. If any leakage occurs on their
part of the vendor the first client as ourselves will suffer. As far we are concerned
having a 60 years old business, we have not experienced any information leakage
by our vendor. However, it may happen and we did learn about it. But up till
now, we have not experienced such a thing.
Researcher: Which logistic function do you outsource, like warehouse, transportation and
operation?
Respondent-3: Let see, if we talk about the maintenance of generator. There are 4-5 things
which are outsourced. For example, textile mill owner wishes to grow the cotton
and purchase the field. After growing the cotton, the mill owner further wishes to
have a weaving factory of this own. It is not possible at all. In our factory, the
main item is the machinery. For the generator parts, there is additional vendor.
Moreover, some generator parts need calibration. This calibration of parts is
performed through 3PLs who have the expertise. The third most important thing
is that after manufacturing of a generator, the 3PLs is required to be involved for
checking of nitrogen oxide, sulfur oxide, etc. It also checks the environmental
health factor. While we deal only with the operation of generators.
Researcher: What are the benefits of 3PLs.
Respondent-3: The benefit of 3PLs may be described, as for instance, we perform a job in six
months or in a year, the revenue required for ourselves, team workers, machinery
and staff, it will be cost expensive. Now, if we hire a vendor, on a certain cost, it
will not directly hit our investment. For example, a calibration cost is Rs. 10,000,
if we do it in our workshop. The calibration through vendor may cost Rs. 14,000
to 15,000, because they are running a setup of their own. In my opinion the job
has to be expanded with time. We also need to grow the business. So I think we
should market things available in the market itself. Building own set up with the
help of availing the services of 3 PLs. So your business can perform the
calibration itself and in future, can become an independent entity without
depending or relying on others.
Researcher: What about the selection and evaluation of benchmarks for the performance of
3PLs contractors?
Respondent-3: There are two ways of evaluation. Firstly, how honest is the person himself and
how much interest he has in performing the job besides the technical expertise of
the 3PLs. Secondly, the most important thing is that the tools which are used are
whether calibrated or not. For example, the vendor sets a crane which is stated to
be of a capacity of four tons and it is also mentioned on the crane itself. But it is
not calibrated to that capacity or not. When it was purchased its capacity was of
four tons. But after five years, is the capacity now existed or not. A calibration
test is needed to ensure having the capacity of four tons and should be tested. It
should be tested every six months and certified by a competent workshop. Again
there are vehicles which must have fitness certificate that whether the vehicle has
the carrying capacity of the generators. It is required to be ensured through an
authentic fitness certificate from the govt. We should also check it ourselves
whether the vehicle can safety travel up to Lahore. There are two ways of
checking. Mostly, a fault can ever be occurred. But, but tire, engine, start-up and
the driver is looked after for safe transportation.
Researcher: Is there any benchmark set by your company, which the 3PLs must qualify to
work with otherwise you reject them?
Respondent-3: In such matter our head office is involved. If we see any anomaly, we inform our
head office that there is problem in certain area with the vendor. For example, the
certification has expired. In spite of reminders, the vendor is not renewing the
certification nor getting it checked. It happens due to the cost involvement in
renewing and getting certification on the part of vendor. Next, the jack, etc are
used are not working properly and need calibration. In such case, our head office
will cancel their vender-ship. On the other hand, a warning letter may be issued
to the vendor to rectify the anomalies.
Researcher: What are the factors considered when deciding logistic service provider, like,
service quality, continuous improvement, experience, expertise, etc?
Respondent-3: Let see, to run your business, the transportation is a factor. It is very important
function for vendor to carry the transport in time. Once we also suffered with the
situation. It is that if an item is not delivered in time the client takes a strong
action by cancelling the deal. For example, we informed the client that the
generator will start from Lahore and arrive within 24 to 48 hours to the
destination. But if it crosses the stipulated time period of arrival the business may
be happened to be lost. Even more, we have to sustain loss of returning and
warehousing cost. We have then to wait for a new demand for the generator to
be supplied. Your sales team provides you a business and you have to unload the
order at the destination of the client with time management to gain profit. You
have to fulfill the commitment of timely delivery with your client.

Interview 4:
An interview was conducted with Mr. Salman Ahmed, Manager Sales of R A ENGINEERING
(PVT) LTD, Karachi with regard to the Outsourcing Logistic Activities undertaken by the
Enterprise. This interview was a part of the requirement for thesis on the subject of Outsourcing
Logistic Activities. The interview was managed with the help of Mr. Hammad, Sales Manager
of NPS. Accordingly, an appointment was arranged with Mr. Salmn Ahmed, who very kindly
spared his time for this interview.
Respondent-4: You are most welcome, I am glad to see you at our company in pursuit of your
study. I would be glad to answer the queries you need from us pertaining to your
field of study.
Researcher: Thank you sir, may I know about the factor influence to adopt 3PLs in power
energy sector in Karachi?
Respondent-4: We are outsourcing the logistics because of the situation in our country where
transportation has become hazardous. Basically, we are dealing with generators,
like large industrial generators as well as rental power generators. We have a
fleet of about 150. About 2000 generator sets are transited from one place to
another. These transitions are carried out within and outside the city. That is one
province to another province. These are the factors. For logistics support certain
things are essential, like, transit insurance. We first of all insure the items we are
transporting. Now we come to reason for which we outsource logistics, or the
factor influencing us to adopt 3PLs. We outsource logistics because it is full time
job. While our core dealing with the rental power. Now, if we position the truck
at our yards to meet the 10 to 12 daily transitions. The first factor will be the cost,
secondly, the management and the third which is very important factor is the road
problems. You know, the road problem involves police bribe factor. Sometimes
take the transport taken in police custody. There may also be an accident.
Though the transport business is profitable, at the same time it is a very risky job.
The next factor influence us to 3 PLs is the time saving. We have already hired
four to five transporters. It often happened that if the transport is not available,
we call the nearest one. This is a B2B business. In this way, the transporters has
become like our business partner who is doing all our supply job. They know the
revenue they could earn through such partnership. Through the outsourcing, we
can put all our efforts towards the core business. If we purchase crane of the
capacity of 4 to 5 tons, it will cost very high expanding the capital expenditure.
This will divert us from our own business also. So if we invest the capital in our
business rather in logistics, it will grow the business further.
Researcher: What are the benefits and drawback of 3PLs in the context of power energy
industry?
Respondent-4: When we talk about the benefits, the main thing is responsibility which is not on
our shoulder. It is the responsibility of 3PLs, who has to carry our generators
safely from one place to another. The other important thing is road problem or
issues, which are not ours. The road mafia is the basic problem in Pakistan. Do
you think that running vehicles on road is so easy? No, it is not. We planned it
many times because although it is 100% profitable, but we cannot do this because
of the road issues and mafia problems. When we outsource logistics we are quite
unaware of the problems and hazards which are faced by the transporters on the
road while carrying out generators from one destination to another. It is not our
problem, if the vehicle is stopped for three days or 6 days or even 10 days. When
a loaded truck starts to run on the road it pays extortion money as per ones own
dealing. Now, if we transport the generator ourselves, we will face the police on
the road, they will check everything including road permit, etc. Again there is
problem of hours timing, where all trucks, containers are allowed travelling only
in the night hours and not allowed to run in the day time. We receive demand
from client to provide them in day time rather at night. But the 3PLs people have
their own setting with which they are able to deliver goods in day time though we
have to pay some extra money from our side too. Thus, we can get away from
such issues and focus to our core business. Besides, the risk is also minimized to
only the generator which we already had insured. We get rid of huge loss of truck
in the event of law & order situation.
Researcher: When you work with your logistics partner, dont you fear of the leakage of
information?
Respondent-4: This happens to be an open market of rental power where a customer can
approach to any supplier. Moreover, the logistics partner may not have such
important information. They have only information to the extent of
transportation, viz, when and where to go, how to reach, how to manage raging
and make adjustment, etc. As for the rental power, it has a great demand
throughout Pakistan while the supply is very limited. Thus the demand is greater
than the supply. Such a situation creates an open market competition. The client
approach to other supplier also, like Allied, R A Services, Orient, who want to
fulfill the demand. The client then collects quotations from all such suppliers and
sometimes from the lower suppliers.
Researcher: Which logistics functions do you outsource?
Respondent-4: We outsource only our transportation. Sometimes, in case of shortage, we

outsource of rentals also. At time, we got a deal of seven generators and we have
only five in our stock, then we manage two generators from other sources.
Researcher: What are the selection and evaluation benchmarks for the performance of 3PLs
contractor?
Respondent-4: When you talk about outsourcing, the first thing is the service which is very
important. If we dont focus on service in our dealings, there will be many
problem created. For example, we hand over generator to an unskilled people
who get it slipped from the vehicle and damage the generator worth of 20 million.
Now who will bear the loss? While the truck cost of only 3 million. As such the
service phenomenon is very important. While we choose a contractor, we stress
on their service capability and experience of working in the market, their
expertise in the job. In addition, the timely delivery is also assessed which is an
important factor. When we choose 3PLs, we have 3-4 logistic service provider
each of whom we give 50%, 30% and 20%. As such, now, we dont have to face
such issues. When a demand comes from certain area, we can guess the right
party who can transport the supply amicably. Moreover, we work with PRM,
PPL, National Refinery; they check each and every thing including safety
measures. As soon as our truck enters they check properly without which they
will allow the vehicle to enter. When you have not counted safety measures, then
we will prefer whom who are certified. If any party do not bother for safety
measures then do not pay for it then we go to low price logistics.
Researcher: For how long you are outsourcing logistics?

Respondent-4: Our Company is Ma-sha-Allah over 15 years old and working on generator sets.
We also outsourcing from the very beginning. We outsource in multiple
directions. We outsource operation and manufacturing. We import canopy as
well as manufacture ourselves. When it is needed we outsource human resource
also.

Appendix-B
1
st
Email Response: National Power Services (NPS), Karachi
2
nd
Email Response: Allied Rental Modaraba, Karachi

3
rd
Email Response: Smart Power Systems (Pvt) Ltd, Karachi

4
th
Email Response: R A Engineering (Pvt) Ltd, Karachi

Outsourcing Logistic Activities in Karachi (Pakistan)

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Outsourcing Logistic Activities in Karachi (Pakistan)

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Outsourcing Logistic Activities in Karachi

Outsourcing Logistic Activities in Karachi i

Outsourcing Logistic Activities in Karachi ii

Keywords: Karachi, Outsourcing, Logistics, 3PLs, Rental Power, Transportation, Operation

Bendor-Samuel (1998) proclaims that a constructive supremacy is achieved through outsourcing

1.4 Research Questions

1.5 Scope of Study

1.6 Limitations of study:

2.0 Literature review

2.2 Empirical Studies:

3.6 Sample Size

4.0 Data Analysis

4.1.2 Assets Reduction:

job. By outsourcing logistics, we become mind free that our generator

delivery, and after sale service which we outsource, is very important.

4.2.4 Customer Satisfaction:

expertise. The last reason is heavy investment. The power sectors

relieved of labor problem, because it becomes costly to maintain the

Respondent-3: We outsourced many of our business activities only to reduce assets. If

Respondent-1: Sometimes we received such a demand which we should have to fulfill

5.0 Conclusion & Recommendations

business information is venerable leaks out to other competitors which can be

Respondent-4: We outsource only our transportation. Sometimes, in case of shortage, we

Researcher: For how long you are outsourcing logistics?

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