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Executive Summary of Reverse Logistics in Supply Chain Management

The report aims to evaluate the role of reverse logistics in the supply chain network. It has been identified from the overall report that the reverse logistics help to improve the supply chain management in the most effective manner. However, the evidence also specified that effective planning, investment, and continuous evaluation is required to implement reverse logistics. The analysis also specified that managers must understand the ecological benefits of reverse logistics. Furthermore, the evidence revealed that reverse logistics is highly useful in providing a competitive advantage to the organization.

Contents

Introduction.

Literature review..

Reverse logistics.

Importance of reverse logistics in supply chain management

Impact of reverse logistics.

Implementation of Reverse logistics in supply chain.

Reference.

Introduction to Reverse Logistics in Supply Chain Management

Reverse logistics is defined as the procedure of moving merchandise beyond their distinctive ultimate destination for things like reuse, detain value, and appropriate disposal. In the supply chain network, resources flow from dealer to clients. Reverse logistics practices differ based on trade and channel place. Businesses, where incomes are a better piece of operational price, tend to have enhanced reverse logistics systems and procedures in place. In the current scenario, some challenges also impact the concept of reverse logistics. The challenge for seller and dealer is to practice returns at a proficiency stage that permits rapid, competent, and cost-effective goods compilation and return. Customer necessities facilitate order for an elevated standard of service that comprises correctness and properness. Reverse logistics also have an ecological advantage for business, which would get tax recognition and constructive community consideration for doing their part to make sure unnecessary goods do not end up in the landfill. Also, the most important reason for reverse logistics is the revenue boost companies can see by lessening objects costs. Reverse logistics has to turn out to be even more significant with the advent of the e-commerce age. 

Literature Review of Reverse Logistics in Supply Chain Management

Reverse Logistics

Vlachos (2016), stated that Firms must increase reverse logistics potential to decrease expenses and maximize their worth offer. Reverse logistics potential symbolizes the internal capacity and procedure that a firm organizes to efficiently execute its reverse logistics actions. There are two sorts of reverse logistics competence including information supervision potential and goods or services capacity. Also, numerous factors delay transferability from onward to reverse logistics ability like lack of transportation, deprived incorporation capability, and nonexistence of reverse logistics in the tactical program. The evidence specified that the potential to distinguish and respond to communal drivers towards environmental sustainability needs efficient reverse logistics. In addition, the traditionalism ability permits company to widen efficient dealer relationships by compliant to general principles and business customs.

Peer and business agreements permit businesses to fulfill the need of buyers, consumers, management, manufacturer, and dealer regarding subjects such as superiority, security, cost, performance, and sustainability. The findings suggested that upstream dealer raw resources imperfection or mistake in design, creation, and assemble may straight make huge pressure on the reverse logistics of the downstream project or even the complete supply procession. Companies that do not outsource should deliberately spend in reverse logistics roles like shipping, dispensation, stock, and delivery. While incompetent reverse logistics may have an enormous ecological force, firms must be practical with reverse logistics.

According to Dixit & Badgaiyan (2016), effectual execution of reverse logistics is predictable to convene the required lawful obligation of revival and appropriate removal of electronic waste thus helping in sustainable administration of electronic waste as envision under extensive manufacturer accountability. The findings revealed that an effectual execution of the reverse supply chain not only permits the manufacturer to fulfill the necessary lawful necessities but will also be satisfied with tangible monetary and intangible goodwill gain. The researchers also recognized client insight toward reverse logistics as a significant barricade in acceptance of reverse logistics by electronics producers. The findings also stated that business take initiative for building return intention and after that ease the procedure of returning.

Importance of Reverse Logistics in Supply Chain Management

Mangla, Govindan & Luthra (2016), stated that reverse logistics is notable as a vital approach to lesser the waste production and to stop contamination by administrating the natural trouble of goods after their end-of-life. The researcher revealed that stress from stakeholders and the principles and attitude authorized by the executive ecological receptiveness leads more rapidly to the execution of eco-friendly practices in logistics. The findings also show the reality that the business with environmentally conscious executives tends not to pursue an immediate approach; as an alternative, they are more practical to environmental necessities. In addition, the flourishing execution of Reverse logistics leads to creativeness in the business performance, monetary situation, and competitive edge. The primary obligation of all is the incorporation of each task for an even flow of objects in both tracks. However, there are numerous external and internal factors leading to the effectual and competent completion of reverse logistics practice in the supply chain. Some of the external and internal factors recommended by researchers are administration policy, client order, support of top administration, stakeholder promise, motivation structure, the excellence of input, and vertical amalgamation. The findings highlighted that human resource and finance play a noteworthy role in executing reverse logistics most effectively. The study was limited to the implementation of reverse logistics in developing countries.

According to Sathish & Jayaprakash (2017), Supply chain preparation of end-of-life (EOL) products in reverse logistics has diverse behavior of environmentally conscious manufacturing that comprise reprocess, remanufacturing, disassembly, and recycling. Reverse logistics procedure is increased with the assistance of SCP, due to the online marketplace accessibility that supports the system of environmentally aware product dealers, distributors, producers, and patrons. The study is highly useful in highlighting the issues that may affect reverse logistics. The findings revealed that operational issues, ecological issues, and financial issues affect the effectiveness of the supply chain. The findings highlighted that the optimization procedure can be used to solve the troubles in reverse logistics. The researchers suggested that the organizations must make a strong procedure and infrastructure to set a strong base.

Impact of Reverse Logistics

Another research work by Najafizadeh & Kazemi (2019) has highlighted the impact of reverse logistics capabilities. The researchers revealed that Reverse logistic supervision is a little but significant fraction of the current supply chain. The evidence revealed that competent management of logistic activities not only acts as a noteworthy basis to produce competitive advantages but also led to customer pleasure and meet their particular requirements. Consequently, reverse logistics focused on actions connected to consume products plays an important role to reduce expenses. Also, Reverse logistic potential advance reverse logistic performance, therefore, these potentials will progress the financial performance of reverse logistic action beyond the product exceptional market. The researchers also believe that rising implication of reverse logistics in firm policy is helpful to recognize opportunity and threats and make more values, therefore, finally, progress reverses logistic plan performance. The overall research indicated that reverse logistics had a major influence on organizational performance. The major limitation of the research work is that it mainly focuses on the impact of reverse logistics on organization performance. Furthermore, a supply chain network was not taken into consideration by the researchers.

Implementation of Reverse Logistics in Supply Chain

Another supporting research work by Morgan et al (2016), shed light on the growing role of reverse logistics in the supply chain. The research specified that a well-made reverse logistics plan can turn into a firm capability. The findings also revealed that companies like Estée Lauder and famous heavy apparatus producer Caterpillar have prioritized the enlargement of a reverse logistics capability due to the prospective for monetary benefits. Estée Lauder has spent in the expertise to construct a “proprietary reverse logistics system” that would permit it to productively evoke worth from machinery of return goods. Likewise, Caterpillar has designed a remanufacturing place that let it to rebuild or renovate diesel engines that are used or broken. The researchers also suggested that the growth of reverse logistics capability need the mastery of numerous significant and exclusive procedure that ease the use of firm-specific possessions in managing returns. The research also highlighted an optimistic influence of partnership on logistics service performance. Some evidence also revealed affirmative relations among the growth of reverse logistics competencies and operational charge investments. Also, big data and information technology can be used to increase the efficiency of reverse logistics in the supply chain. The research work is highly helpful but it has some limitations because it did not examine the cross-practical role of reverse logistics in the firms.

The research work by Sangwan (2017), highlighted the role and implication of reverse logistics in business. The research revealed that the significance of reverse logistics can be evaluated from the information that the standard reverses logistics expenses are 9.5% of whole logistics expenses. In addition, businesses have understood that reverse logistics practice can be united with source drop procedures to achieve competitive benefits and at a similar time can accomplish sustainable growth. The findings stated that Reverse logistics is mostly authoritarian driven in Europe where the legislative system is the convincing industry to tackle revival and clearance of end-of-life goods; revenue driven in the USA where the price is improved where ever probable; and in developing phase in developing nation of the earth including India. The researchers specified that resource revival is not reasonably feasible for the business. In such cases, governments can way out to an extensive variety of policy tools to facilitate the attainment of their targets. The evidence specified seven recovery alternatives such as reprocess, renovate, restore, remanufacturing, repossession, recycle, and clearance. In addition, the researchers believed that Remanufacturing is an environmentally and inexpensively sound technique to achieve a lot of the objective of sustainable expansion.

Another research work by Saad (2017), revealed how the sustainable supply chain plan might pressure reverse logistics outcomes. The findings have significant inference for executives in promising markets looking to start economically friendly trade practices. The authors present strong proof of the profit attain from reverse logistics in a sustainable supply chain proposal. Policy creator and firm’s effort to foster a sustainable supply chain idea must not ignore the imperative role of Eco-reputation and Eco-innovation tactical orientations, which the outcomes recognize as imperative enablers. The researchers also present confirmation of the serious role of Eco-reputation and Eco-innovation planned orientations in organizing sustainable supply chain ideas, as well as of their joint effects. The findings highlighted that a well-managed RL system cannot only offer significant cost savings in procurement, revival, dumping, stock holding, and haulage but also assist in client retention. The overall research work is highly useful for executives as it provides the ways to implement reverse logistics in the organizations most effectively.

The research work by Yu & Solvang (2016), preparation and administration a reverse logistics system need inclusive methodologies for decision-making at planned, strategic, and operational stage. The evidence stated that the Economic presentation of a reverse logistics system is the principal distress of model with the reflection of either maximizes general earnings or lessening expenses. The paper also argues that reprocess and inappropriately reprocessing of used creation may lead to secondary contamination, so the ecological thought of a reverse logistics structure is of huge significance. The researcher also more revealed that more savings is concerned and more superior processing expertise is executed in order to reduce the carbon release of a reverse logistics scheme. In addition, the design of a reverse logistics network with the contemplation of the uniqueness of numerous types of used products is recommended by researchers. The author also argues that the organization must focus on minimization of overall reverse logistics expenses, and minimization of carbon release of the shipping and dispensation of used goods.

Conclusion on Reverse Logistics in Supply Chain Management

It has been concluded from the above report that reverse logistics is an imperative element in supply chain management. The analysis shows that the effective implementation of reverse logistics helps to provide a competitive advantage in the most effectual manner. In addition, it provides several environmental benefits to the company. With the help of reverse logistics, organizations can become more sustainable and responsible for the environment. The evidence specified that the Reverse logistics offer a method to pull out the highest value from goods at the end of their life series. Furthermore, the implementation of an approach to reverse logistics will radically advance the process of trade. It will recover each pace of the supply chain which will have a ripple consequence on the rest of the production. The analysis highlighted that the main reason for implementing reverse logistics in supply chain management is that it helps in increasing profitability and decreasing revenues.

References for Reverse Logistics in Supply Chain Management

Dixit, S., & Badgaiyan, A. J. (2016). Towards improved understanding of reverse logistics–Examining mediating role of return intention. Resources, Conservation and Recycling, 107, 115-128.

Mangla, S. K., Govindan, K., & Luthra, S. (2016). Critical success factors for reverse logistics in Indian industries: a structural model. Journal of cleaner production, 129, 608-621.

Morgan, T. R., Richey Jr, R. G., & Autry, C. W. (2016). Developing a reverse logistics competency. International Journal of Physical Distribution & Logistics Management.

Najafizadeh, A., & Kazemi, F. (2019). The Impact of Reverse Logistics Capabilities on Firm Performance with Mediating Role of Business Strategy. Journal of System Management, 5(2), 225-240.

Saad, M. (2017). Determining of Sustainable Supply Chain Initiative and Reverse Logistics. Available at SSRN 3090119.

Sangwan, K. S. (2017). Key activities, decision variables and performance indicators of reverse logistics. Procedia CIRP, 61(1), 257-262.

Sathish, T., & Jayaprakash, J. (2017). Optimizing supply chain in reverse logistics. International Journal of Mechanical and Production Engineering Research and Development, 7(6), 551-560.

Vlachos, I. P. (2016). Reverse logistics capabilities and firm performance: the mediating role of business strategy. International Journal of Logistics Research and Applications, 19(5), 424-442.

Yu, H., & Solvang, W. D. (2016). A general reverse logistics network design model for product reuse and recycling with environmental considerations. The International Journal of Advanced Manufacturing Technology, 87(9-12), 2693-2711.

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