An examination of the impact of outsourcing on operational efficiency and effectiveness at a fast-moving consumer goods company

Abstract

The study investigated the impact of outsourcing on operational efficiency and effectiveness at Pioneer Foods, determining the effect of outsourcing on enhancing the outcome of operations. The objectives involved analysing the drivers of outsourcing, understanding the challenges involved, and ascertaining the effect of outsourcing on operational efficiency and effectiveness. The literature review covered fundamental concepts such as resource-based view theories and transaction cost economics, which illustrated that outsourcing has indeed allowed organisations to focus their attention on competencies by gaining greater flexibility while driving down costs. Such a theoretical framework forms the basis of how outsourcing contributes to an operational advantage within highly competitive markets. The research design was quantitative in nature, and the respondents were surveyed through a structured questionnaire. The target population was 30, and a representative sample was obtained by using probability sampling with a sample size of 28. The findings show how outsourcing provided positive effects in matters of operational efficiency and effectiveness. In essence, businesses are better placed in leveraging their resources in specific strategic manners. However, other less-than-ideal factors were a loss of control concerning the outsourcing functions and over-reliance on suppliers. Ultimately, outsourcing can create huge value for FMCG firms in operational results. The study provides actionable insights for Pioneer Foods and other similar companies on how strategic outsourcing of non-core activities will make a company more competitive and productive. These insights are useful for industry stakeholders who are interested in optimising operational performance through better outsourcing decisions. Findings indicate outsourcing enhances operational efficiency but poses risks like loss of control. It is recommended that firms develop robust outsourcing strategies. Future research should explore outsourcing’s long-term impact on competitive advantage in the FMCG sector.