Outsourcing Logistics Functions and Cost Efficiency Among Manufacturing Firms in Kaduna State, North West Nigeria

This study examines the relationship between outsourcing logistics functions and cost efficiency among manufacturing firms in Kaduna State, North West Nigeria. Logistics outsourcing, whereby firms transfer transportation, warehousing, and distribution functions to specialist third-party providers, has been advocated in supply chain literature as a route to reduced overhead, improved service levels, and greater operational focus on core competencies. Kaduna State, home to a significant number of manufacturing firms in food processing, textiles, and chemicals, provides a relevant context for examining how outsourcing decisions affect cost outcomes. Using a descriptive survey design, structured questionnaires were administered to 88 operations and finance managers in 20 manufacturing firms across the Kaduna Industrial Estate and Kakuri Industrial Layout. The study assesses the nature and scope of logistics functions outsourced, the criteria used in selecting logistics service providers, and the cost efficiency outcomes attributed to outsourcing arrangements. Cost efficiency is measured through logistics cost as a percentage of revenue, transportation cost per unit dispatched, and warehousing cost per pallet position. Regression analysis is used for hypothesis testing. Findings draw on recent transaction cost economics and outsourcing literature applicable to Nigerian manufacturing contexts. Results are expected to reveal a statistically significant positive relationship between logistics outsourcing scope and cost efficiency. Recommendations are addressed to manufacturing firm executives and logistics service providers on building productive, long-term outsourcing partnerships. Keywords: logistics outsourcing, cost efficiency, manufacturing, Kaduna State, third-party logistics.