Outsourcing is a growing aspect of supply chain management and is receiving a lot of attention from manufacturing companies globally. This is because there is stiff competition and the need to satisfy customers demand variability, reduced lead-time and improve market share. This study establishes the extent manufacturing companies outsource services and the impact on customer satisfaction. The research was carried out within manufacturing companies in south western Nigeria. The population of the study consists of top management staff, this includes logistics, procurement and marketing managers. The sample of this study consisted 10 Manufacturing companies from the list of fifty (50) quoted companies on the Nigerian Stock Exchange modified by Manufacturing Association of Nigeria in 2005. The data collected was analyzed using regression analysis. The analysis indicates that manufacturing companies outsource Transportation and Distribution to a very large extent. Procurement, Warehousing, inventory control are also outsourced. The analysis also reveals that outsourcing has a significant effect to customer satisfaction. Overall, outsourcing seems not only to show positive benefits for cost reduction but also in service performance, thus, the study suggests that by outsourcing logistics activities companies can better service performance to their customers.
Keywords: Customer Satisfaction, Logistic Service, Outsourcing
