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UNIVERSITEIT GENT
FACULTEIT ECONOMIE EN BEDRIJFSKUNDE
ACADEMIEJAAR 2008 – 2009
Organizing Closed-Loops for the Retrieval of Waste Products: Reverse Logistics
Masterproef voorgedragen tot het bekomen van de graad van
Master in de Toegepaste Economische Wetenschappen: Handelsingenieur
Gertjan De Boever, Thijs Van de Velde
onder leiding van
Prof. Aimé Heene, Dr. Ir. Jan Lepoutre
UNIVERSITEIT GENT
FACULTEIT ECONOMIE EN BEDRIJFSKUNDE
ACADEMIEJAAR 2008 – 2009
Organizing Closed-Loops for the Retrieval of Waste Products: Reverse Logistics
Masterproef voorgedragen tot het bekomen van de graad van
Master in de Toegepaste Economische Wetenschappen: Handelsingenieur
Gertjan De Boever, Thijs Van de Velde
onder leiding van
Prof. Aimé Heene, Dr. Ir. Jan Lepoutre
I
I. Permission Ondergetekenden verklaren dat de inhoud van deze masterproef mag geraadpleegd en/of
gereproduceerd worden, mits bronvermelding.
Gertjan De Boever Thijs Van de Velde
II
II. Acknowledgements
We would like to thank An Magerman and Gerrit Ouwens for their valued contribution in drawing up the
sample, their precious views and topical knowledge of the business in general, and for introducing us to
other professionals in the reverse logistics business.
Furthermore, we would like to thank Stijn Van de Velde, Mike Van der Weyde and Emmanuel Labrosse
for their critical evaluation of the questionnaire. Their remarks were very helpful in further refining the
questionnaire.
We would also like to thank Horst Boellmann for inviting us to the Remax 2009 convention in
Düsseldorf.
Our thanks also go to professor Heene for approving of this research subject, which has proven to be a
very interesting and instructive topic.
Finally, our endless gratitude goes to dr. Jan Lepoutre, who has supported us all the way, and has never
stopped encouraging us to continue our travel through the world of reverse logistics.
III
III. Table of contents
I. Permission ............................................................................................................................................. I II. Acknowledgements .......................................................................................................................... II III. Table of contents ............................................................................................................................. III IV. List of abbreviations ........................................................................................................................ IV V. List of figures and tables................................................................................................................... V VI. List of tables ..................................................................................................................................... V 1. Introduction .......................................................................................................................................... 1 2. Literature review .................................................................................................................................. 4 2.1. What is Reverse Logistics? ............................................................................................................... 4 2.1.1. What is being returned? ............................................................................................................... 7 2.1.2. Who is involved? .......................................................................................................................... 7 2.1.3. Why do companies engage in reverse logistics? .......................................................................... 8 2.1.4. Reverse, but how? ...................................................................................................................... 12 2.2. Hypothesis development ............................................................................................................... 14 2.2.1. Commitment of resources and reverse logistics performance .................................................. 15 2.2.2. Learning and reverse logistics performance .............................................................................. 15 2.2.3. Strategic importance and reverse logistics performance .......................................................... 16 2.2.4. Capabilities and reverse logistics performance.......................................................................... 17 3. Questionnaire ..................................................................................................................................... 19 3.1. Questionnaire development .......................................................................................................... 19 3.2. Discussion of scale items ................................................................................................................ 21 3.3. Testing validity ................................................................................................................................ 24 4. Methodology ...................................................................................................................................... 25 4.1. Initial research setup ...................................................................................................................... 25 4.1.1. Sampling & data collection ......................................................................................................... 25 4.1.2. Conclusions ................................................................................................................................. 26 4.2. Final research setup ....................................................................................................................... 26 4.2.1. Market overview ........................................................................................................................ 27 4.2.2. Sampling ..................................................................................................................................... 29 4.2.3. Data collection ............................................................................................................................ 30 4.3. Data analysis ................................................................................................................................... 32 4.3.1. T-test .......................................................................................................................................... 32 4.3.2. Correlation analysis .................................................................................................................... 34 4.3.3. Regression analysis ..................................................................................................................... 34 5. Results ................................................................................................................................................ 39 5.1. Reliability analysis .......................................................................................................................... 39 5.2. Discussion of the results ................................................................................................................. 40 6. Conclusion .......................................................................................................................................... 43 6.1. Discussion ....................................................................................................................................... 43 6.2. Limitations ...................................................................................................................................... 45 6.3. Future research .............................................................................................................................. 46 6.4. General conclusion ......................................................................................................................... 47 7. References ........................................................................................................................................... VI 8. Exhibits .................................................................................................................................. Exhibit 1-1 8.1. Exhibit 1 – list of sample population ................................................................................. Exhibit 1-1 8.2. Exhibit 2 – Questionnaire .................................................................................................. Exhibit 2-1
IV
IV. List of abbreviations
B2C – Business to Consumer
CEO – Chief Executive Officer
EPR – Extended Producer Responsibility
ETIRA – European Toner & Inkjet Remanufacturers Association
MTP – Market Transformation Programme
OEM – Original Equipment Manufacturer
SITL – Salon International du Transport et de la Logistique
VIL – Vlaams Instituut voor Logistiek
V
V. List of figures and tables
Figure 1 - Number of articles published (Rubio et al., 2008) ....................................................................... 1 Figure 2 - Conceptual model ...................................................................................................................... 18 Figure 3 - Questionnaire extract (1) ........................................................................................................... 20 Figure 4 - Questionnaire extract (2) ........................................................................................................... 21 Figure 5 - Estimates of destination of printer cartridges at end of life ...................................................... 27 Figure 6 - Sample partitioning .................................................................................................................... 30 Figure 7 - Response spreading ................................................................................................................... 31 Figure 8 - Learning - reverse logistics performance ................................................................................... 36 Figure 9 - Resource commitment - reverse logistics performance ............................................................ 37 Figure 10 - Reverse logistics capabilities - reverse logistics performance ................................................. 37 Figure 11 - Strategic importance - reverse logistics performance ............................................................. 38 Figure 12 - Conceptual model with significances ....................................................................................... 41
VI. List of tables
Table 1 - Reverse logistics capabilities ....................................................................................................... 18 Table 2 - Response bias: p-values ............................................................................................................... 31 Table 3 - Cronbach alfa: internal consistency of the constructs ................................................................ 39 Table 4 - Non-response bias: p-values ....................................................................................................... 40 Table 5 - Results: testing the rephrased hypotheses ................................................................................. 40 Table 6 - Correlation matrix ....................................................................................................................... 42
1
1. Introduction
Reverse logistics is “the process of planning, implementing and controlling backward flows of raw
materials, in process inventory, packaging and finished goods, from a manufacturing, distribution or use
point, to a point of recovery or point of proper disposal” (Rubio, Chamorro, Miranda, 2008).
Reverse logistics is quickly gaining attention. There is a growing interest in reverse logistics, both in
practice (Verstrepen, Cruijssen, de Brito, Dullaert, 2007) as in scientific literature (de Brito, Dekker,
2002; Rubio et al., 2008). Rubio et al. performed a literature research on reverse logistics articles
published between 1995 and 2005. Before 1995, the concept of reverse logistics was not well defined –
the topic still had to be consolidated and few articles were published in this area (Rubio et al., 2008). In
fact, the first known definition of reverse logistics was published by the Council of Logistics
Management in the early nineties (Stock, 1992). As Figure 1 illustrates, since 1995 there has been a
significant increase in the number of articles published on this topic.
Figure 1 - Number of articles published (Rubio et al., 2008)
At the same time however, reverse logistics is underrated, and regarded as a troublesome cost driver,
although it could be a helpful instrument in the strategic positioning of a company (Verstrepen et al.,
2007; Rubio et al., 2008; Guide, Harrison, Van Wassenhove, 2003; Blackburn, Guide, Souza, Van
Wassenhove, 2004). The importance is clear: according to Blumberg, who analyzed the assessment of
current and emerging reverse logistics expenditures, reverse logistics will become a major business
opportunity in the 21st century (Blumberg, 1999). Therefore, organizations such as the VIL (Flemish
2
Institute for Logistics) are working hard to increase knowledge and interest in reverse logistics, by
conducting research and spreading results.
In general, the main focus of research efforts has been the analysis of tactical and operational aspects of
reverse logistics, while strategic implications of reverse logistics have been largely neglected (Rubio et
al., 2008; Prahinski, Kocabasoglu, 2006). This conclusion opens the doors to interesting research
opportunities.
As reverse logistics is still a new topic, it requires companies to build a new set of skills and competences
(Autry, Daugherty, Richey, 2001). While forward logistics aims at forecasting, planning, warehousing and
distribution (Chopra, Meindl, 2007), reverse logistics is focused on strategic costs, strategic quality,
customer service, environmental and political/legal concerns (Dowlatshahi, 2005). Furthermore, a good
integration of the forward supply chain with the reverse chain, even as far as product design is
concerned, may allow for an optimization of profit and costs. Companies may go beyond this
integration, and change their business model (Guide et al., 2003), as the example in the box below
demonstrates.
A prime example of this evolution is Interface, once a carpet seller, now a ‘carpet service’
provider. Interface has closed the loop by installing modular bio-based carpets under lease
contract. As part of their maintenance plan, they replace worn-out carpet tiles and these squares
are reconverted into raw materials. Waste becomes food for the next production cycle.
Quite a difference with the past, when their strategy was that of a conventional carpet seller, and
where there was no mention of a reverse supply chain. By integrating a reverse chain into their
business strategy, effectively redefining their business model, Interface has managed to close the
loop, eliminate waste, and now offers an innovative and future-proof business concept.
URL: <www.interfaceglobal.com> (18/05/2008)
In order to build up this new set of skills and competences, an organization should stimulate
organizational learning, and commit the necessary resources to develop reverse logistics capabilities.
Obviously, this implies that strategic decisions have to be made, and reverse logistics should be adopted
in the strategic positioning. However, whether this has an impact, how and to what extent, remains to
be researched.
This thesis focuses on five constructs: organizational learning, positioning reverse logistics within
strategy, reverse logistics capabilities, resource commitment and reverse logistics performance.
3
This thesis consists of five main parts:
The first part of this thesis is the literature review on reverse logistics. In this review, reverse logistics is
first defined according to Stock (1998) and Rubio et al. (2008). Next a brief overview is given of the
several articles published on the topic of reverse logistics. We continue by exploring reverse logistics
based on the characteristics that are the building blocks of de Brito and Dekker’s framework for reverse
logistics (2003). The four characteristics of that framework (what, who, why and how) will each
demonstrate the importance of the above mentioned constructs. The last section of the literature
review focuses on hypothesis development. In this section, multiple assumptions are made, based on
previous research and common sense, in order to answer the general research questions. From these
assumptions the hypotheses are derived, that are tested in the third part.
The second part discusses the development of the questionnaire, used to survey the sample population.
Furthermore, an explanation is given regarding the decisions concerning the questionnaire as well a
brief discussion regarding the used scale items.
The third part of the thesis contains the methodology, including the demarcation of the test population,
the data sampling and data analysis.
The fourth part of the thesis concerns the reliability analysis, the results and interpretation of the
results. Also a few conclusions are made.
The fifth part is fully dedicated to the general conclusions of the current research. Recommendations
are made, based on the findings of the previous chapter. We then take a critical view on the limitations
of the research. The thesis ends with a proposal for future research paths.
4
2. Literature review
In this chapter, an overview is given of the literature on reverse logistics. First, we look at what articles
have been published, and how these articles deal with the subject. Next, the term reverse logistics is
defined, in order to make the subject more comprehensible. An excellent way of mapping a company’s
reverse logistics is offered by the framework that is discussed in the following sub-chapter. To put
reverse logistics into its economic perspective and to give the reader an indication of its importance,
some figures on the size and economic importance are presented in the next part. We continue by
reflecting on the strategic importance of reverse logistics. The reverse logistics design is discussed next,
giving a more practical view on the topic. To conclude, we touch upon the challenges that may hinder
the execution of a sound reverse logistics plan. In the end, the reader should be able to understand and
appreciate the broader setting of the current research.
2.1. What is Reverse Logistics?
In the short span that Reverse Logistics has become consolidated as a scientific area, many definitions
have been proposed. According to S. Rubio et al., the European Working Group on reverse logistics,
REVLOG, offers the most complete definition for reverse logistics (Rubio et al., 2008):
Reverse Logistics is the process of planning, implementing and controlling backward flows of raw
materials, in process inventory, packaging and finished goods, from a manufacturing, distribution or
use point, to a point of recovery or point of proper disposal.’
Stock (1998, p. 20-21) offers a more elaborate definition:
From a business logistics perspective, the term reverse logistics refers to the role of logistics in
product returns, source reduction, recycling, reuse of materials, waste disposal, and refurbishing,
repair, and remanufacturing… and is a systematic business model that applies best logistics
engineering and management methodologies across the enterprise in order to profitably close the
loop on the supply chain.’
Reverse logistics is important, as the figures show. In the USA, the costs attributed to reverse logistics
are about $35 billion per year, or 4% of total logistics costs, according to an estimation by Stock (Stock,
2001). Stock further noted that retailers who adopt reverse logistics programs can reduce returns
‘
‘
5
management as well as transportation costs, use less human capital, are able to capture important data
related to their products and processes, and manage to simplify chargebacks reconciliation1. Indeed, a
lot of value can be found in product returns. The value of products returned in the USA exceeds $100
billion each year, which is more than the gross domestic product of two thirds of the world’s countries
(Stock, Speh, Shear, 2002). Langnau noted that analysts predict that over the next few years, the
average cost per return would be $30-$35 (Langnau, 2001). The remanufacturing industry in the USA is a
$53 billion industry, which is comparable to the steel industry, and the 73 000 remanufacturing firms in
the USA alone, offered employment to some 480 000 people – as much as the consumer durable goods
industry. According to Blumberg, who performed an empirical analysis of the assessment of current and
emerging expenditures for reverse logistics, reverse logistics will become a major business opportunity
in the 21st century (Blumberg, 1999).
Reverse logistics is a relatively young research field (Rogers, Tibben-Lembke, 1998). Rubio et al. analyzed
the characteristics of articles on reverse logistics, published between 1995 and 2005 (Rubio et al., 2008).
The authors selected a group of journals of “renowned prestige among the international academic
community, completing the selection with other publications that are highly regarded in the area of
production and operations management”. In this selection of articles, only four articles date back to
1995. Using the topic based classification proposed by Dekker et al. (Dekker, Fleischmann, Inderfurth,
Van Wassenhove, 2004), the articles were divided into following categories:
1. Management of the recovery and distribution of end-of-life products.
2. Production planning and inventory management.
3. Supply chain management issues in reverse logistics.
Furthermore, they classified the articles by methodology, be that case study, literature review,
mathematical model or wholly theoretical. Some interesting conclusions were drawn. Over half of the
articles handled production planning and inventory management. One third discussed supply chain
management issues in reverse logistics, although interest in this particular topic has been increasing in
recent years, and only a good 12 percent of the articles handled management of the recovery and
distribution of end-of-life products. Our own research is a survey that can be situated in the third
category, supply chain management issues in reverse logistics. In that particular group, only eight
important surveys were conducted from 1995 until 2005.
1 Chargebacks (often referred to as “expense-offsets”) are financial penalties for non-compliance with your
customer's requirements. The financial handling should match physical handling of the returned products. This is referred to as chargeback reconciliation. URL: <http://ediacademy.com/reducing_chargebacks.html> (15/03/2009)
6
What is especially interesting to note, is the number of articles aimed at constructing mathematical
models. A clear indication that interest in reverse logistics was historically aimed at bringing practical
solutions, rather than changing the strategic thinking of the company. Lately, this focus has been shifting
towards strategic thinking, with more articles published on issues regarding closed-loop supply chain
management. However, “the research in coordination in closed-loop supply chains and reverse logistics
decisions is still in its infancy stage” (Debo, Savaskan and Van Wassenhove, 2002). Rubio et al. (2008)
conclude that more research on strategic factors such as marketing, competition and technology is
needed. Indeed, few articles can be found that focus specifically on the constructs we discuss in
correlation with reverse logistics.
Carter and Ellram reviewed literature on reverse logistics (Carter, Ellram, 1998) and found that most
research before that date lacked theoretical grounds or a holistic view. Research had been exploratory
in nature and consisted mostly of anecdotal evidence. Furthermore, a great deal of articles would take a
relatively narrow focus on a single reverse logistics aspect. But little empirical work had focused on
reverse processes such as recalls, rejects, refusals, returns, reworks, and returnable shipping pallets and
containers (Marien, 1998). Although few articles in the reverse logistics literature focus on strategy and
strategic implications, strategy is very important. To demonstrate this, we will discuss different
characteristics that define reverse logistics (Thierry, Salomon, Van Nunen, Van Wassenhove, 1995;
Fleischmann, Bloemhof-Ruwaard, Dekker, Van Der Laan, Van Nunen, Van Wassenhove, 1997; Zhiquiang,
2003).
What products are being returned? Who is involved in the process? Why exactly are products returned,
what has driven companies and institutions to become active in reverse logistics? Why do customers
return their products? And how does reverse logistics work in practice, what processes and activities are
involved? These four characteristics are the building blocks of R. Dekker and M. P. de Brito’s Framework
for Reverse Logistics (de Brito, Dekker, 2003), which we will apply to structure the literature study.
7
2.1.1. What is being returned?
What is being returned will depend on the product characteristics. A first relevant characteristic is the
composition of the product. How many components the product consists of, the number and
heterogeneity of materials used and even the size of the product is of importance. But there are other
important aspects as well: the specific way components and materials are combined, and the presence
of hazardous materials will have a great impact on the re-processing activities. A second important
characteristic is the age specific deterioration. Whether all parts of a product will age equally or
unequally (homogenous or heterogeneous deterioration), and whether the economic value of the
product will decline rapidly or not, will determine the recovery option. The use pattern of a product is
the last product characteristic that defines what is being returned. This consists of the location, intensity
and duration of use.
With the help of these characteristics, products can be divided into seven different categories:
consumer goods (e.g. apparel and furniture), industrial goods (e.g. military and professional equipment),
spare-parts, packaging and distribution items, civil objects (e.g. bridges, buildings, roads, etc.), oils, ores
and chemicals, and other materials (e.g. glass, pulp).
2.1.2. Who is involved?
Who is involved in the process, and what are the responsibilities? Fuller and Allen suggest three
categories (Fuller, Allen, 1995). Suppliers, manufacturers, wholesalers and retailers all are forward
supply chain actors. These actors will organize reverse logistics for different reasons; some or all the
why-drivers may be in effect (supra). They will see economic benefits, or legislation will oblige them to
take action. These drivers will furthermore create opportunities for specialized reverse chain players,
such as jobbers2, recycling specialists and reverse logistics service providers, to create value. Ever since
Adam Smith’s Wealth of Nations, specialization is an economic paradigm that helps to increase returns.
And specialization allows these market players to offer an interesting alternative to setting up their own
reverse chain. A last group consists of opportunistic players, for they can find residual value in product
returns. Although this may sound pejorative, these opportunistic players in fact include charity
organizations and non-profit organizations. Youth movements, for instance, may collect old furniture for
reuse, or may even be sponsored by local organizations for a one-time waste collection initiative.
2 Manufacturer, tradesman, or wholesaler who deals in small lots of goods or ‘jobs’, or acts as an agent, middle-
man (intermediary), or a sub-contractor, and usually does not deal directly with the principal customer. URL: <http://www.businessdictionary.com>. (06/03/2009)
8
As multiple parties are involved in reverse logistics, conflicts may arise. There often is a retailer –
manufacturer conflict (Rogers Tibben-Lembke, 1998), what could be seen as a form of the principal-
agent problem. In that case, retailers and manufacturers disagree on the condition of the returned item,
its value or the timeliness of response. Retailers will state that the product was sent back in excellent
condition, and damage must have occurred during production or transportation. The manufacturer on
the other hand, may search for different reasons: poor planning or damaging by the retailer. When the
retailer and the manufacturer finally agree upon the condition of the item, the question remains how
the value should be divided. Both parties will claim as much value as possible, and when an agreement
is made, the retailer will always feel that refund comes late. However difficult the retailer-supplier
relationship may be, it is a necessary relationship. Both parties need each other, and if they want to
derive mutual benefit, they have to develop a working strategic partnership. Only then can they avoid
inefficiencies and max out the mutual benefits. It is clear that strategic decisions (such as decisions
regarding partnerships) are important to reverse logistics activities.
2.1.3. Why do companies engage in reverse logistics?
There are many reasons – further called ‘why-drivers’ – why companies start reverse activities, or why
customers return products. For businesses, direct (cost reduction, value added recovery and input
material) and indirect gains (anticipating impending legislation, market protection, green image,
improved customer/supplier relations) are economic drivers. A second type of drivers is legislation
related, as there is an increase in environmentally related legislation. Original supply chain players are
more often held responsible for the collection and recovery of their end-of-life products. This end of life
take-back responsibility is referred to as Extended Producer Responsibility or EPR (Lifset, Lombardi,
1997). Corporate citizenship3 is a last why-driver for the receiver.
Customers have their own reasons for sending products back to the manufacturer. Usually, the products
do not function properly or have become superfluous. Different types of product returns are
distinguishable. Manufacturing returns cover those cases where product components have to be
recovered during the production phase. Raw material surplus, quality control returns and production
leftovers or by-products are typical manufacturing returns.
3 A firm's sense of responsibility towards the community and environment (both ecological and social) in which it
operates, and draws resources and sustenance from. Firms express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources. URL: <http://www.businessdictionary.com>. (14/04/2009)
9
A second type of returns are distribution returns. This refers to product recalls, commercial returns (e.g.
wrong or damaged deliveries, unsold products), stock adjustments and functional returns (e.g.
packaging, distribution items and carriers such as pallets, crates or containers). In short, returns that
have been initiated in the distribution phase. This last group of returns has been growing. According to
Krikke et al. (Krikke, le Blanc, van de Velde, 2003) 70% of the consumer goods that have been returned
to the shop are non-defective, but are returned for other reasons such as a lower price elsewhere,
overadvertising, or because customers do not know how to use the product,...
If returns have been initiated after the product has reached the final customer, it is catalogued as a
customer return. Customer returns envelope returns in different stadia of a product’s life cycle.
A B2C commercial return occurs when a customer benefits from a money-back-guarantee or an
equivalent when returning a product shortly after receiving or acquiring it. If products do not meet the
required quality standards, they can be returned under warranty (warranty returns). Even if products do
meet the promised quality standards, they still might need to be sent back for repairs after the warranty
period has expired. If the repairs are made at the customer’s site, these service returns often occur in
the form of spare-parts. A fourth type of customer returns is end-of-use returns. This refers to
returnable containers (e.g. empty bottles) and leasing cases as well as second-hand products such as
used books. Finally, products at the end of their physical or economic life, are returned to the original
equipment manufacturer (OEM) in order to comply with product-take-back obligations, or enter the
value-added recovery process of companies such as brokers. These returns are called end-of-life returns.
In view of our topic, taking a closer look at some business why-drivers is of interest. Without a doubt,
handling of reverse logistics challenges is a very important strategic capability in all industry sectors. In
extreme cases, a well established reverse logistics channel can be a lifesaver. In the eighties, an
employee of the McNeil Laboratories division of Johnson & Johnson, poisoned bottles of Tylenol with
cyanide, leading to several deaths and considerable damage suits against McNeil and its corporate
parent. Johnson & Johnson was charged for not screening employees for psychological disturbances,
and improper supervision of the use of cyanide in its facilities. A few years later, a new case of cyanide
poisoning struck McNeil, but this time Johnson & Johnson was prepared. Through their fine-tuned
reverse logistics channels, they were able to immediately dispose of the possibly tainted product, and
they even attained record sales only days after (Rogers, Tibben-Lembke, 1998).
A more recent case happened in Belgium, where the Dutch electronics firm Philips had to call back
millions of Senseo coffee makers after a fault was discovered (De Tijd, 2009). A safety vault designed to
depressurize the machine, would fail to do so, potentially leading to an explosion. Not exactly your
10
regular coffee kick, and an estimated €30 million cost for Philips. Reverse logistics should allow a
company to “clean out the channel” quickly an thoroughly.
But there are less extreme reasons as well. As briefly discussed above, good corporate citizenship is an
important why-driver. Charitable activities increase the value of a brand and may induce people to
purchase that brand rather than another. For example, Nike encourages its customers to return their
used shoes to the store. These shoes are shredded and used in making running tracks and basketball
courts. Tyre manufacturers such as Dunlop and Goodyear recycle their tyres for use in playground
flooring.
Another good example is the Green Line program initiated by Colruyt, a major Belgian retailer. Apart
from informing customers on environmental issues, Colruyt tries to limit its environmental footprint, by
limiting energy consumption, using environmentally friendly packaging, purifying gas emissions,... A part
of this program includes the fermentation of all organic waste (such as unsold fruits and vegetables,
with or without packaging). These residuals are collected by a central warehouse, from which they are
transported to specialized firms responsible for the fermentation activity. The resulting product is used
as fertilizer in horticulture. This program not only greens Colruyt’s image, but also cuts costs as less time
is lost sorting the products in the shops. At the same time, the fermentation process generates enough
electricity to fulfil the energy needs of 750 households. Retailers such as Colruyt also need well
organized reverse logistics to keep their product offer fresh and up-to-date. As retail space is their most
important asset, they need to use that selling space to its fullest potential. And grocery stores’ margins
are very low – a well known consequence of price competition. Only those products that sell well, will
end up on the shelf. High inventory turnover rates are a prime requisite to survive in this very
competitive market. In this situation, reverse logistics are strategically used to allow retailers and
wholesalers, and by extent all forward supply chain actors, to reduce the risk of getting stuck with
products that don’t sell as well as expected. This not only benefits the retailers and wholesalers, but also
the customers, as the product selection will be broader, and renewed more often. Renewing the
product offer may furthermore allow retailers to demand better prices – customers prefer to buy fresh
vegetables, even at a higher price – which helps them protect their margins.
A similar form of “cleaning out the channel” happens at auto companies. Those companies usually have
a large reverse logistics network, through which components are shipped back from dealers. As most
dealers do not have sufficient capital to invest in inventories, auto companies can make sure dealers’
inventories are renewed in time, by giving them generous return allowances. In turn, the dealers will be
able to better service the customer.
11
Reverse logistics can also increase the switching costs of changing suppliers. Locking in customers,
making sure they don’t move to another supplier, is making sure that business is assured for the future.
Among the many ways companies try to create a strong bond with their customers, offering the ability
to take back unsold or defective merchandise quickly, while handling the financial side in a timely
manner, is an important service. And of course, in the end, companies want to satisfy customers. That
means taking back products that no longer meet their needs.
Closing the loop can also be a competitive necessity. A company may lose market share to a specialized
reverse player, when that reverse player builds up competence in the company’s field, allowing it to
provide a product offer at a better price. In the printer cartridge aftermarket, for example, a lot of
attention goes to reverse logistics. Improved product design, with a focus on remanufacturing, has
stirred up the market, with new entrants specializing in remanufacturing the toner cartridges. And while
new toner cartridges are priced at approximately $100, these remanufactured cartridges are sold for
easily 25 percent less. This has obviously lead to price competition and although original equipment
manufacturers focus on quality whereas remanufacturers focus on price, original equipment
manufacturers have been forced to start their own reverse logistics programs. They have to close the
loop, to maintain their share of this very profitable market, for if they do not offer take back schemes,
remanufacturers will find plenty of input resources needed to produce the competing remanufactured
cartridges. With the returned cartridges, some OEMs such as Océ and Xerox have started hybrid
manufacturing4, a practice now typically applied in the copier industry (Krikke, Van Harten, Schuur,
1999). And with great effect: in 1999, thanks to the reuse and remanufacturing of parts and equipment,
as well as the diversion of over 50 000 tons of material from the waste stream, Xerox reported annual
savings of several hundred million dollars (Jayaraman, Luo, 2007).
With a process this simple, virtually anyone can start remanufacturing cartridges using only little
equipment. Kits to perform the necessary actions are even available on the internet. As a result, the
number of remanufacturers has boomed to nearly 12000 remanufacturers in the late nineties. In
reaction to these remanufacturers taking a large bite out of the market, the original equipment
manufacturers are working on ways to protect their market. As drs. Edwin G. A. Mélotte, CEO of
Frequent Filler explained, one way to do this, is by adding a special chip to the cartridges, that is
necessary for the cartridge to work. When the cartridge is empty, the chip will disable itself (even in a
4 The key for these OEMs “is dual sourcing, which allows OEMs to manufacture identical machines both brand new
and partly from secondary components, depending on availability of returns. Remanufactured products are sold as new. Yield of returns and quality (perception) of remanufactured products make testing and recovery the critical processes.” (Krikke et al., 2003, p. 11)
12
physical way, by burning part of its circuits), making it impossible to reuse this cartridge. But as OEMs
develop ways to block the remanufacturers, they respond by searching workarounds.
While there are many reasons for engaging in reverse logistics activities, many companies are still
hesitant to do so. The main reason is the relative unimportance of reverse logistics issues to managers.
When a company’s reverse logistics are not a priority, it is a difficult area to manage properly. In the
past, a lot of people used to view reverse logistics as “junk”, and were hesitant to invest in it – and
investments were difficult to justify. Recently, however, the attitude towards reverse logistics changed.
For some companies a necessity: publishers have had to deal with so many returns, that good reverse
logistics management was a conditio sine qua non for survival in the long run. Nowadays, the publishing
industry is on the forefront of reverse logistics (Rogers, Tibben-Lembke, 1998).
2.1.4. Reverse, but how?
Most reverse supply chains are designed along five key activities (Blackburn et al., 2004). Used products
first have to be obtained from the user through product acquisition. The acquired products are
transported through the reverse logistics channel to a facility where the next processes take place.
Inspection, sorting and disposition activities allow for assessing the returned products’ condition and
value recovery options. Products then may be restored to their original specifications by means of
remanufacturing activities. Finally, secondary markets are to be created for the recovered products, in
order to recover their residual value. However, the longer these activities take, the more value is lost
along the chain. Supply chain design has to take this into account, as economics are an important driver
for reverse logistics.
As stated above (supra, p.7), age deterioration has an important impact on the choice of recovery
methods. In fact, research has indicated that the decrease in residual value a product holds during the
“reverse lifecycle”, or more precise, the “marginal value of time”5, is the most influential product
characteristic for supply chain design in reverse logistics (Blackburn et al., 2004). Therefore, one would
expect differences in the reverse supply chain design of both slow and fast clockspeed industries6. But
what difference exactly?
In forward supply chains, a trade-off must be made between responsiveness and efficiency (Fisher,
1997). Responsive supply chains are able to respond to wide ranges of quantities demanded, can meet
5 The loss in value per unit of time spent awaiting completion of the recovery process.
6 Fast clockspeed industries: industries with a short natural lifecycle of products, where new products are
introduced at a fast and furious pace, and companies must constantly innovate to survive (Fine, 1998).
13
short lead times, can handle a large variety of products, allow to meet a high service level and can
handle supply uncertainty (Chopra, Meindl, 2007). Hence, responsive supply chains are flexible.
However, this flexibility comes at a cost. For example, to achieve this flexibility, an increase in capacity is
needed, which in turn increases costs and decreases efficiency. Therefore, the opposite of the
responsive supply chain is the efficient supply chain, where supply chain managers try to be as cost-
efficient as possible. In this forward supply chain model, Fisher (1997) also distinguishes functional and
innovative products. Functional products have a long life cycle with predictable demand, whereas
innovative products only have a short life cycle with variable demand. His model can be applied to
reverse logistics, by observing that functional products and innovative products correspond respectively
to products with low and high marginal values of time. Computers for example, quickly lose value in
their short life cycle. As responsive supply chains sacrifice cost efficiencies for speed, and vice versa,
reverse supply chain design is a trade-off between cost efficiency and speed.
Again, as age deterioration is so important, one would expect an obvious difference in the choice of
reverse supply chain structure, whether efficient or responsive. In practice, however, these differences
turn out to be minimal, as managers tend to focus on efficiency rather than speed, regardless the fact
that much of the residual value of the returned products erodes away in time (Blackburn et al., 2004).
To cope with this rapid erosion of value, Blackburn, Guide, Souza and Van Wassenhove propose a
concept similar to Lee and Tang’s product postponement in forward supply chains (Lee, Tang, 1997).
They argue that managers should avoid processing returns that hold no recoverable value by making a
disposition as early as possible – a concept they call “preponement”. Positioning the evaluation activity
early in the reverse chain is in fact decentralization, and decentralization may seem to increase costs.
But as unnecessary processing expenses are avoided, firms can reap greater benefits while they can
focus on the recovery of products that still hold value. This will also increase the speed of the recovery
process, allowing firms to maximize the recoverable value. Indeed, time delays are reduced in two ways.
First, time delays for disposition of new products and scrap products are reduced, and as new and
unused products have the highest marginal value of time, it is important that these products are
returned as soon as possible. Second, the remaining products will be processed faster, as there are
fewer products left, which means less queuing time and less chance for congestion.
However, this decentralization is only feasible if the condition of products can be determined in the field
quickly and inexpensively. Technological means, such as electronic sensors, can make preponement
economically attractive, even regardless the marginal costs of time. Klausner et al. (Klausner, Grimm,
Hendrickson, Horvath, 1998) discuss the use of an Electronic Data Log, integrated in a product, to store
information on the degradation of the components during the product’s lifetime. An example of this
14
technique can be found in Germany, where Bosch, a manufacturer of power tools, has built a “data
logger” into their products (Klausner, Grimm, Horvath, 1999). This inexpensive chip records the usage
duration and the speed of operation of the product during its entire lifecycle. These two parameters will
determine whether a product is fit for remanufacturing or recycling. This is an inexpensive form of
preponement. In the printer aftermarket, a similar approach can be found. Some printers are equipped
with technology that measures the number of pages that have been printed. Based on this information,
printer recovery can be performed more effectively, by determining whether a printer has not been
used at all, lightly used or heavily used. The appropriate channels can then be addressed to recover the
respective printers.
2.2. Hypothesis development
As our literature review indicates, there are three main strategic issues within reverse logistics. Are we
going to set up reverse activities, and why? Who is going to be involved? Are we going solo, or are we
going to outsource part of the activities? And how are we going to organize our reverse chains – which
capabilities are needed to deploy our strategy? Reverse logistics apparently deserves strategic attention.
Another remark based on the literature study is that reverse logistics processes are not part of the core
processes of companies that are still starting up a reverse chain, and therefore the necessary capabilities
are yet to be acquired and developed. In order to develop these capabilities, one must first know which
capabilities are of importance to the reverse activities. Furthermore, companies that want to gather
these specific reverse logistics capabilities, need to invest resources. Investment in learning is important
as well. Commitment to learning will foster a learning orientation within the company (Norman, 1985).
When there is an atmosphere of knowledge building and sharing, the company will more easily build
capabilities. As a result, learning will have an impact on the company’s ability to acquire and develop
capabilities, and will have an effect on the reverse logistics activities.
The question that remains is: to what extent do these aspects influence reverse logistics? To assess the
impact of an aspect on the reverse logistics activities, we will research the impact of that aspect on the
economic performance of the reverse logistics activities.
15
2.2.1. Commitment of resources and reverse logistics performance
Past research, conducted by Daugherty et al. (Daugherty, Autry, Ellinger, 2001), has already examined
the relation between resource commitment and reverse logistics performance. The results of this
research showed a significant association between commitment of management resources and the
achievement of reverse logistics program goals. The relation between commitment of financial
resources and the performance of a reverse logistics program was found to be insignificant, and as such,
Daugherty et al. stated that further research was needed to better understand the relationship between
commitment of resources and the performance of reverse logistics. The current research can provide
better insight into these matters by investigating the relationship between commitment of resources
and the reverse logistics capabilities and how this relationship influences the performance of a reverse
logistics program. Previous research found that the assignment of more financial, human and physical
resources to a program or process may result in a superior performance of the program or process
(Sweeney, Szwejczewski, 1996). Translating these findings to a reverse logistics setting, the first
hypothesis can be formulated as follows:
Hypothesis 1a: The commitment of resources to a reverse logistics program will have a direct positive
impact on the performance of the reverse logistics program.
2.2.2. Learning and reverse logistics performance
The degree to which an organization values and promotes learning is its commitment to learning
(Sinkula, Baker, 1997). This commitment to learning will nourish a learning climate that will stimulate
employees to build and share knowledge (Normann, 1985). As a result, it is more likely that these
companies will enjoy generative learning7 which is mainly concerned with building new competences
(Pemberton, Stonehouse, 2000).
Competence building processes enable firms to create several strategic options in the present, which
makes it possible to take competence leveraging actions in the future. The presence of several strategic
options, gives firms the opportunity not to commit to one course of action, but to be strategically
flexible (Sanchez, Heene 2004). The strategic flexibility of a company is determined by the set of specific
7 “Generative learning… occurs when the organization is willing to question long-held assumptions about its
mission, customers, capabilities, or strategy. It requires the development of a new way of looking at the world based on an understanding of the systems and relationships that link key issues and events” (Slater, Narver, 1995, pg. 2).
16
strategic options the firm obtains (Sanchez, 1997). As the literature suggests that choosing for strategic
flexibility may lead to superior long term performance (Jacobson, 1992), one could imagine that
maintaining a high level of organizational learning could also enhance the performance of the company
by stimulating the competence building processes. Various scholars have found that maintaining a high
level of organizational learning results in a higher performance enjoyed by the firm (Slater, Narver,
1994).
As reverse logistics requires new competences, and organizational learning stimulates competence
building, organizational learning will facilitate the creation and further development of reverse logistics
activities, and will enhance the economic performance of those activities. Therefore, we state that
learning will have a positive effect on the reverse logistics performance:
Hypothesis 2a: The commitment to learning of the company has a direct positive impact on the
performance of the reverse logistics program.
Reverse logistics requires specific capabilities. A practical link between organizational learning and
reverse logistics capabilities can be reasoned with logical arguments. When a company has a strong
commitment to learning, more effort will be put into training and education. Part of this effort will be
directed specifically at the reverse logistics capabilities. This effort will translate into increased
effectiveness of these capabilities, which may increase the performance of the reverse logistics activity
(infra, p.17).
Hypothesis 2b: The commitment to learning of the company has a direct positive impact on the reverse
logistics capabilities.
2.2.3. Strategic importance and reverse logistics performance
The strategy of a company defines the business in which a company will compete, which resources are
needed and how resources need to be allocated and focussed to convert distinctive competences into
distinctive competitive advantages. A growing importance of reverse logistics to the strategy of a firm
could lead to a better detection of opportunities and threats, more creation of value and therefore
improving performance of the reverse logistics programs (Andrews, David, 1971). These assumptions
lead to the following hypothesis.
17
Hypothesis 3a: The importance of reverse logistics within the strategy of the company will have a direct
positive impact on the performance of the reverse logistics program.
In order to create value, the strategy needs to define how the company will be composed, structured
and coordinated in pursuing its goals of value creation and distribution. In order to do so, managers are
responsible for designing their company to be an effective goal-seeking open system. The core of this
system is called the strategic logic, which is defined as “an organization’s operative rationale for
achieving its goals through coordinated deployment of resources.” (Sanchez, Heene, 2004). The strategic
logic determines which resources are needed, how many resources are needed and how these
resources will be coordinated in achieving the postulated goals. Yet again, a growing importance of
reverse logistics within the strategy of the company could lead to fundamental changes within the
strategic logic itself, resulting in a higher commitment of resources to the reverse logistics program and
a higher capability of the company in key reverse logistics activities. This assumption leads to the
following hypotheses.
Hypothesis 3b: The importance of reverse logistics within the strategy of the company will have a direct
positive impact on the commitment of resources to the reverse logistics program.
Hypothesis 3c: The importance of reverse logistics within the strategy of the company will have a direct
positive impact on being capable in key reverse logistics activities.
If these last hypotheses are proven to be correct, the importance of reverse logistics within the strategy
of the company will not only have a direct impact on the reverse logistics performance but also an
indirect impact, through resource commitment and the capability in key reverse logistics activities.
2.2.4. Capabilities and reverse logistics performance
Autry et al. have proposed a set of reverse logistics capabilities (Table 1), and confirmed these
capabilities to be of importance in the catalog retailing industry (Autry et al., 2001). Autry further
applied that same set of capabilities to the automotive aftermarket (Autry, 2005).
18
Reverse logistics capabilities
Ease of obtaining return authorization
Handling reconciliation of chargebacks
Length of time for credit processing
Quality of repair/rework
Timeliness of repair/rework
Table 1 - Reverse logistics capabilities
(Source: Autry et al., 2001)
While it is logic that reverse logistics capabilities will improve the reverse logistics performance, we will
now formulate the hypothesis that these capabilities will improve the economic performance of the
reverse logistics activities, regardless the specific market. This statement is based on the assumed
generic nature of the listed capabilities, an assumption that was proven correct in the pre-test of the
questionnaire (infra, p.24).
Hypothesis 4a: The specific reverse logistics capabilities will have a direct positive impact on the
performance of the reverse logistics program.
A conceptual model of the hypothesized relationships is presented in Figure 2. This model clearly shows
how the different constructs are interrelated, and distinguishes the direct and indirect effects of the
independent variables on the reverse logistics performance.
3a
3b
3c
1a
4a
2a 2b
Strategic
importance of
reverse logistics
Commitment to
learning
Reverse Logistics
capabilities
Resource
Commitment
Reverse logistics
performance
Figure 2 - Conceptual model
19
3. Questionnaire
In this chapter, an overview on the development of the questionnaire is presented, and the potential
risks are evaluated. We then take a closer look at the items of the several constructs. Those items are
retrieved from previous research, or developed from the scientific literature. Finally, the questionnaire
is tested for face validity by a panel of professionals. The finalized questionnaire can be found in
Exhibit 2.
3.1. Questionnaire development
An itemized scale is constructed for each different construct. The scales used are of the seven-point-
Lickert type, which range from 1 to 7. This gives the opportunity to express the attitude of the
respondents in a single figure by using a standard procedure. Seven-points scales are chosen, because
they give a good balance between the time spent filling in the survey (reducing the Halo-effect8) and
accuracy in measuring the attitude of the respondents. Using these Lickert-type scales also implies the
assumption of equal appearing intervals, meaning that the distances between the seven points are
perceived to be equal by the respondents. This will later on facilitate the statistical processing of the
obtained data. Using scales with less than seven points could endanger the previous assumption, as the
risk that the respondent will not perceive the intervals as equal, will become larger. Furthermore,
Lickert-type scales require the items measuring the constructs to have the same positive or negative
orientation. The central tendency effect9 is of little risk to our research, because of the professional
characteristics of the respondents and the use of the seven-point scale to reduce the time spent on
filling in the questionnaire.
Some general questions are formulated to retrieve information such as the company’s turn-over, the
number of employees and how the questioned company profiles itself; as a forward supply chain actor
or a specialized reverse chain player. Based on this information, the spreading of the population can be
defined, and compared with the industry partitioning to assess the external validity of this research.
8 The tendency of the respondent to answer in the same side of the continuum (De Pelsmacker, Van Kenhove, 2006). 9 The tendency of the respondent towards the middle answer in the survey, because of a lack of interest or
concentration, or because the respondent perceives the middle answer as the “normal” one. (De Pelsmacker, Van Kenhove)
20
Furthermore some questions regarding the company and their familiarity with reverse logistics were
developed. The questioned companies were asked to fill in questions such as to what extent their
company had to deal with reverse flows and activities, and what were the main reasons why products
are returned. The purpose of both questions was to stimulate the respondent to think about reverse
logistics in his/her company and enabling the respondents to fill in further questions at ease. Both
questions were developed in the form of a matrix. The rows of the first matrix (Figure 3) contained
several products that can be returned (de Brito and Dekker, 2003) determining the possible reverse
flows a company could deal with. The columns of the matrix contained to what extent the company
could deal with these reverse flows ranging from rare or never, to often and on a regular basis and a
core activity.
Please indicate how often reverse flows are dealt with, and whether they are considered to be a core activity.
To what extent does your company deal with reverse flows and reverse activities?
Rare o
r neve
r
to sm
all e
xtent,
on
irregu
lar bas
is
Often an
d on a
regu
lar
basis,
not a
core
act
ivity
Often and o
n a re
gular
basis, a
nd a co
re a
ctivi
ty
consumer goods (apparel, furniture, and a
vast variety of goods)
packaging and distribution items
spare-parts
civil objects (waste from buildings, dikes,
bridges, roads, etc.)
ores, oils and chemicals
other materials (like pulp, glass and scraps)
consumer goods (apparel, furniture, and a
vast variety of goods)
industrial goods (e.g. military and
professional equipment)
Figure 3 - Questionnaire extract (1)
The second matrix (Figure 4) differs from the first matrix in its columns. The columns contain the
reasons why the several products were returned, as defined by De Brito and Dekker (2003).
21
Please indicate the main reasons why following products are returned:
(multiple answers are possible)
Econom
ics -
finan
cial r
easons
Legis
latio
n
Corpora
te ci
tizensh
ip
Manufa
cturin
g retu
rns
Distrib
ution re
turn
s
Custom
er ret
urns
consumer goods (apparel, furniture, and a
vast variety of goods)
consumer goods (apparel, furniture, and a
vast variety of goods)
industrial goods (e.g. military and
professional equipment)
spare-parts
packaging and distribution items
civil objects (waste from buildings, dikes,
bridges, roads, etc.)
ores, oils and chemicals
other materials (like pulp, glass and scraps)
Figure 4 - Questionnaire extract (2)
3.2. Discussion of scale items
For each construct there are several questions (attributes/items). These attributes define the attitude
towards the measured construct. For the constructs learning orientation, resource commitment, reverse
logistics capabilities and reverse logistics performance, the research uses existing attributes from
previous research conducted in this field. For strategic importance, however, no scales were found in
the literature, so a new scale had to be constructed, using the scientific literature.
Commitment to learning: Learning orientation, firm innovation capability, and firm performance
(Calantone, Cavusgil, Zhao, 2002). In this article, a measurement scale was designed to measure a
company’s degree of commitment to learning. Four items were used to measure this construct. The
Lickert type scale ranges from 1 (strongly disagree) to 7 (strongly agree).
Resource commitment: Reverse logistics: superior performance through focused resource commitments
to information technology (Daugerthy et al., 2005). This article defines three sorts of resources that
firms commit to their reverse logistics activities: “Technological resources are those specific forms of
technology used in or adapted to the management of the reverse flow of product. These could include
information technology (e.g. software) or physical technology (e.g. scanning equipment). The managerial
resources item measures the level of managerial commitment to the effective management of reverse
22
logistics. Finally, the financial resources item relates to the dollars that are allocated to the management
of a firm’s reverse logistics program.” (Daugerthy et al., 2005, p.83).
The Lickert type scale used to measure the construct ranges from 1 (little) to 7 (substantial). Meaning
that the respondents need to indicate the level of commitment for each of the three types of resource.
Reverse logistics performance: Reverse logistics: superior performance through focused resource
commitments to information technology (Daugerthy et al., 2005). This article stresses the fact that
Logistics/Supply Chain Managers attempt to create a strategic fit between the level of service and the
cost realizing this level, while maximizing the economic performance of the supply chain. According to
this general observation, Daugerthy et al. derive specific items for the scale. The items address both cost
control and performance outcomes, as well as how effective the respondents have been in realizing
certain reverse logistics objectives related to economic performance. The respondent have to indicate
on a seven-point scale how effective their firm is in achieving certain objectives (1: not at all effective
and 7: extremely effective). In addition to the above mentioned question, a second question measures
how important each reverse logistics performance metric is to the respondent. The scale items range
from 1 (not at all important) to 7 (extremely important).
Reverse logistics capabilities: Formalization of reverse logistics programs: A strategy for managing
liberalized returns (Autry, 2005). According to this article: “Scales for reverse logistics capabilities and
reverse logistics programs effectiveness were adopted from previous research (Autry et al., 2001). [...]
Exploratory factor analysis yielded two conceptually and empirically distinct capability constructs. These
constructs were termed returns handling capabilities, which were measured using three items reflecting
return authorization, reconciliation, and processing, and repair/rework capabilities, which consisted of
two items reflecting quality and timeliness of repair/rework.” (Autry, 2005, pg.753). The scale ranges
from 1 (not at all capable) to 7 (extremely capable). This means that the respondent needs to assess
whether his organization is capable in handling the returns and in executing the necessary rework.
Strategic importance of reverse logistics: A new measure scale was needed for this construct, as no
research was found, providing the necessary constructs regarding the strategic importance of reverse
logistics. After exploratory research in other scientific fields (e.g. project management), a number of
articles, related to the topic ‘strategic importance’, were listed that contained possible guiding principles
to create this new scale. After proper reading, two articles were selected as the most useful and
applicable.
- Reverse logistics, stakeholders' influence, organizational slack, and managers' posture (Álvarez-
Gil, Berrone, Husillos, Lado, 2007)
23
- Strategic importance: Project selection criteria by strategic orientation (Jiang, Klein, 1999)
Based on these articles, a set of attributes/items were selected:
- Contribution to organizational goals/objectives
This item measures whether the respondent can observe a well defined relation between the
organizational goals and the reverse logistics goals, as this relation could point out the strategic
relevance of the reverse logistics within the organization. If no relation can be observed by the
respondent, this could indicate that within this organization reverse logistics has a low strategic
importance.
- Importance to the organization for the future success
An organization that believes that reverse logistics becomes more important for the future
success, will give this topic more attention, leading to a growing strategic relevance/importance
of reverse logistics.
- Importance to the functioning of the organization
This item can be perceived as being more general. If the respondent perceives reverse logistics
to be important for the organization to function, one can state that reverse logistics is of
strategic importance.
- Importance to the organizational strategy
While the three previous items measure the construct strategic importance of reverse logistics
on a rather indirect way, this item will explicitly (directly) measure the importance of reverse
logistics in the organizational strategy.
24
3.3. Testing validity
To examine the face validity of the questionnaire, a first draft was tested using a select test panel of 5
persons. An Magerman (ClozDloop), Gerrit Ouwens (Ouwens Holding), Mike Van der Weyde (Recyca),
Stijn Van de Velde (Picanol), Emmanuel Labrosse (Conibi). Few problems arose.
• Respondents found it difficult to define key words like learning commitment, reverse logistics,
manufacturing returns, customer returns and distribution returns.
• Not all respondents perceived the attributes measuring the construct economic performance as
equally important.
In response to the first problem, a short description was added to the questionnaire, to explain the few
words that the respondents found difficult to understand. These explanations were kept to the point for
two main reasons:
1. They could stimulate the Central Tendency effect and the Halo effect;
2. The longer it takes to fill in the questionnaire the less interesting one is to even fill in the
questionnaire.
To address the second problem, a new question was developed to measure the importance of the
several attributes measuring the construct economic importance. The respondents were asked to
indicate how important the several reverse logistics objectives were within their company ranging from
1: not at all important to 7: extremely important.
What is interesting to note, is that no issues came up related to the capabilities construct. The
assumption that the capabilities mentioned in the hypothesis development were of generic nature, is
further strengthened.
25
4. Methodology
This chapter is divided into three parts. The first part handles the initial research setup, which
unfortunately failed as there were too few respondents. Nevertheless, interesting conclusions could be
drawn. The second section shows how we drastically changed the research setup, to target the printer
cartridge aftermarket specifically. It starts with a brief market overview, and continues with sampling
and data collection. The final part is the data analysis. A T-test is used, and complemented with a
correlation analysis. Furthermore, the path is examined whether a linear regression analysis is viable.
4.1. Initial research setup
4.1.1. Sampling & data collection
As the examples throughout the literature review point out, reverse logistics is ubiquitous. Almost all
industries are confronted with this new major trend within Supply Chain Management. From collecting
and recycling packaging materials to collecting and repairing or recycling of end-of-live products. Given
the fact that reverse logistics has been booming in the recent years (Rubio et al., 2008), it is very difficult
to map all companies that are involved in reverse logistics activities. That makes it very hard to create a
well defined population that includes all the companies involved in reverse logistics. In order to acquire
a representative selection, a survey was conducted on SITL Europe (“Salon International du Transport et
de la Logistique”), one of the largest international logistics fairs, with 497 exhibitors in different logistics
skill centres and over 24500 professionals from over 55 countries visiting the fair. These numbers are an
indication for the importance of this fair in the logistics profession. As reverse logistics is an important
part of logistics in general, and based on the good reputation of SITL, this was deemed a promising
research ground.
A sample of one hundred companies was randomly picked out of the extensive list of exhibitors, in order
to prevent selection errors. These companies were kindly asked by mail to fill in the questionnaire.
Afterwards, non-responding companies were mailed twice in an attempt to increase the response rate.
Furthermore, we visited the companies at SITL, in order to improve the response as well as to have a
personal conversation with professionals, to gain a more in depth understanding of what reverse
logistics means to those companies.
26
4.1.2. Conclusions
In spite of the effort, the response stopped at a mere 6% (6 filled in questionnaires). Nevertheless, a few
conclusions could be drawn from the discussions with professionals and exhibitors.
- While literature suggests that reverse logistics is a hot topic (Verstrepen et al., 2007), the
concept “reverse logistics” is not well known by logistic service providers
- Logistic service providers are often not familiar with the reverse logistics needs of their clients
Further discussion with professionals at SITL showed another gap between theory and practice. The
large amount of articles concerning quantitative modelling within reverse logistics (Rubio et al., 2008)
assumes that new models regarding inventory management and reverse distribution are needed to
execute reverse logistics activities efficiently. According to Fleischmann et al. (1997), new frameworks
for inventory management and distribution are to be developed, as the reverse activities do not simply
fit within the forward supply chain. What this comes down to, is that managers should set up a separate
reverse chain keeping the forward channels in mind, searching for synergies and integration
possibilities. In practice however, logistic service providers are often not familiar with these theories.
The few companies that set up reverse logistics activities, do so without thinking of the forward chain,
which often leads to inefficiencies and results in higher costs. Some of these inefficiencies are: not using
the full capacity of the trucks, ineffective distribution networks, etc. A well known yet often occurring
example is the arrival of a new truck to pick up returned goods, minutes after an empty truck leaves the
firm after delivering goods on that very same spot.
To be able to continue the current research, a drastic decision concerning the population was to be
made. In the literature review, it became clear that the printer supplies aftermarket was one of the
larger markets with great interest in reverse logistics. Furthermore, knowing a few important
professionals from the printer cartridge aftermarket could give the research a boost. Therefore, the
research will now target this aftermarket specifically.
4.2. Final research setup
The advantage of focussing on one market specifically, is that it allows researchers to gain a more in-
depth understanding of reverse logistics within that industry. Of course, the downside of this approach
is that the results found in this research will only apply within the printer aftermarket. Generalization
towards the total reverse logistics population can only be assumed, and will be further discussed in the
27
conclusions of this thesis (infra, p.45). In order to specify a population and to guarantee the external
validity of the sample that will be created, a market overview was made, based on an article by the
Market Transformation Progamme10 (MTP), a freely available market overview with apparent authority
(it is supported by the UK government).
4.2.1. Market overview
The printer aftermarket is characterized by two types of key players resp. the OEMs (Original Equipment
Manufacturers, like Hewlett Packard, Lexmark, Canon,...) and the remanufacturers11. Both market
players initiate different printer cartridge waste routes. The figure below gives a brief overview of the
several existing waste routes in the printer cartridge aftermarket.
Figure 5 - Estimates of destination of printer cartridges at end of life
(Source: MTP - BNICT23: Waste considerations relating to printer cartridges)
One can assume that the printer market still has a lot of potential, as the larger part of the used printer
cartridges are still thrown away by the customer and end up at the landfill (50%). Out of all the
cartridges that are returned to an OEM, remanufacturer or retail shop/kit, 10% are returned to the
OEMs, 80% are collected by the remanufacturers and another 10% are refilled at refill shops or at home
by individuals, using refill kits. As it is very difficult to keep track of the number of refill shops, let alone
10
Market Transformation Programme, 2008, BNICT23: Waste considerations relating to printer cartridges, URL: <http://www.mtprog.com/spm/download/document/id/676>. (02/04/2009) 11
Remanufacturers rebuild, repair, and restore an equipment or instrument to meet or exceed Original Equipment Manufacturers’ (OEM) performance specifications. URL: <http://www.businessdictionary.com>. (10/05/2009)
28
the number of people that refill their own cartridges, the focus was put on the main industrial players of
the aftermarket: the OEMs and the remanufacturers. These large actors have different activities and a
different philosophy.
The OEMs initiate two reverse flows: returning to the OEM for recycling and returning to the OEM for
incineration. OEMs prefer recycling cartridges rather than remanufacturing them. Recycling printer
cartridges can be defined as stripping the cartridges of metal and plastic components, after the cartridge
is stripped of toner. Sometimes, some of the individual components are re-used. Due to poor return
rates of printer cartridges to OEMs these recycling rates remain low to this day. Recycling is often
outsourced to specialized recyclers. Few OEMs, Epson being one of them, have chosen to incinerate
their returned cartridges (Diamond, Morgenstern, 2007). By using state-of-the-art incinerators OEMs are
able to retrieve the energy from the burning process, allowing them to dispose their end-of life printer
cartridges and generate alternative energy. This waste-to-energy conversion solution is a viable solution
but rather rare in the printer cartridge aftermarket.
Most remanufacturers offer take-back schemes, often joined with a financial incentive. Others purchase
their used cartridges through professional brokers. These brokers have set up a network of companies
that have committed to return their empty cartridges to one specific broker. In return these companies
are financially compensated. Many remanufacturers and brokers work together with charitable
institutions such as Guide dogs for the Blind and Save the children to operate printer cartridge collection
schemes, for each returned cartridge the charitable institutions receive a donation. The returned
cartridges need to be controlled, a selection is made and the remanufacturable cartridges are separated
from the non-remanufacturables. After the selection process, two reverse flows can be distinguished,
return to remanufacturer for reuse and return to remanufacturer for landfill.
- The remanufacturable cartridges are stripped of toner, refilled and repacked. These recycled
cartridges are then sold on the printer cartridge market to compete with the more expensive
original variant.
- Non-remanufacturable cartridges are first decomposed to separate the reusable parts. A small
amount of the non-reusable parts are recycled for their metal or aluminium content. The larger
part is sent to landfills.
29
4.2.2. Sampling
A few persons familiar with the business, resp. Gerrit Ouwens (CEO Ouwens Holding, more than 15
years experience in the printer cartridges aftermarket) and An Magerman (CEO ClozDloop, more than 13
years experience in the printer cartridges aftermarket), were contacted. With their kind advice, and in
accordance to the partitioning of returned cartridges from the market, a list of 193 important players
within this industry was drawn up (Exhibit 1-1). This list contains 4 types of aftermarket players.
- OEMs: There are about 28 OEMs active on the aftermarket, twenty of them were included in the
list.
- Remanufacturers: The remanufacturing market is highly fragmented (DiCarlo, 2003). Therefore,
in consultation with Gerrit Ouwens and An Magerman, the option was chosen to contact the
exhibitors of the Remax trade fair, the “no. 1 industry event” according to the European Toner &
Inkjet Remanufacturers Association12. 153 Remanufacturers were included in the list.
- Professional brokers: The professional brokers are important as they supply a lot of
remanufacturers with empty cartridges. Intensive competition in the brokers market resulted in
an considerable consolidation in the recent years (Lyra, 2005). Hence only a few large (10)
professional brokers were included in the list.
- Recyclers: Recyclers were included in the list as they are most of the time responsible for the
recycling programs initiated by both OEMs and remanufacturers. 10 recyclers were included in
the list.
This results in a sample, very much in correspondence with the market partitioning presented in the
market overview (supra, p.27), as shown in Figure 6.
12
“ETIRA is short for European Toner & Inkjet Remanufacturers Association. ETIRA represents the interests of the inkjet and toner cartridge remanufacturers and related service providers, compatibles manufacturers, etc. in the EU. Created in 2003, it is the recognized industry body for all topics affecting this industry.” URL: <http://www.etira.org/w/about-etira/13>. (10/05/2009)
30
Figure 6 - Sample partitioning
4.2.3. Data collection
Mails including the questionnaire were sent to the 193 companies. 24 companies responded to this
initial mailing (4 OEMs, 5 recyclers, 3 collectors and 12 remanufacturers). In the second round, a
reminder mailing was sent to the non-responding companies, and the remanufacturing companies were
personally encouraged to fill in the questionnaire at the Remax event in Düsseldorf. This resulted in an
additional 22 responses (3 OEMs, 2 recyclers, 4 collectors and 13 remanufacturers), as well as a couple
of interesting discussions at the convention. However, this may also have lead to a biased sample, as
only the remanufacturers were personally encouraged during the second mailing round, while the
recyclers, OEMs and professional brokers were contacted exclusively by mail and by phone.
Nevertheless, looking at the response rates both in the first and in the second mailing, remanufacturers
were the largest group of respondents, regardless the personal intervention at the Remax fair in
Düsseldorf. Hence the effect of the sample bias on the validity of the research is probably insignificant.
This is confirmed by an independent T-test, comparing the means of relevant variables for both groups.
As no significant differences were found (p-values > 0,05), the sample bias should not endanger the
validity of the research (Table 2).
31
Construct p-value
Learning
Resource commitment
Economic performance
Reverse logistics capabilities
Strategic importance
0,325
0,637
0,667
0,092
0,820
Table 2 - Response bias: p-values
Out of the sample, a total of 7 OEMs, 25 remanufacturers, 7 professional brokers and 7 recyclers
responded. The overall response rate was 24% (46 usable responses). The spreading of responses
regarding the activity of the company is shown below.
Figure 7 - Response spreading
32
4.3. Data analysis
4.3.1. T-test
The hypotheses were tested using a T-test. This test is used to compare the results (means, variance,...)
of two independent groups. Concerning this research, the earlier hypotheses needed to be rephrased,
without changing the content, in order to make the use of this test possible. The new hypotheses are:
• H1a: Organizations that commit a more than average amount of resources to reverse logistics
programs, will enjoy a higher reverse logistics performance compared to companies that
commit a less than average amount of resources.
Dependent variable: Economic performance
Grouping variable: Resource commitment
Cut point: the average of the self-assessed resource commitment scores for all respondents
• H2a: Companies with more than average commitment to learning will enjoy a higher reverse
logistics performance than companies with a less than average commitment to learning.
Dependent variable: Economic performance
Grouping variable: Commitment to learning
Cut point: the average of the self-assessed commitment to learning scores of all respondents.
• H2b: Companies with more than average commitment to learning will be more capable in
executing key reverse logistics activities than companies with a less than average commitment
to learning.
Dependent variable: Reverse logistics capabilities
Grouping variable: Commitment to learning
Cut point: the average of the self-assessed commitment to learning scores of all respondents.
• H3a: Companies that attribute a more than average strategic importance to reverse logistics will
enjoy a higher reverse logistics performance than companies that attribute a less than average
strategic importance to reverse logistics.
Dependent variable: Economic performance
Grouping variable: Strategic importance
Cut point: the average of the self-assessed scores for strategic importance of reverse logistics
for all respondents.
33
• H3b: Companies that attribute a more than average strategic importance to reverse logistics will
be more capable in executing key reverse logistics activities than companies that attribute a less
than average strategic importance to reverse logistics.
Dependent variable: Reverse logistics capabilities
Grouping variable: Strategic importance
Cut point: the average of the self-assessed scores for strategic importance of reverse logistics
for all respondents.
• H3c: Companies that attribute a more than average strategic importance to reverse logistics will
commit more resources to the reverse logistics program than companies that attribute a less
than average strategic importance to reverse logistics.
Dependent variable: Resource commitment
Grouping variable: Strategic importance
Cut point: the average of the self-assessed scores for strategic importance of reverse logistics
for all respondents.
• H4a: Companies that are more capable in executing key reverse logistics activities than the
average company will enjoy a higher reverse logistics performance than companies that are less
capable in executing key reverse logistics activities.
Dependent variable: Economic performance
Grouping variable: Reverse logistics capabilities
Cut points: the average of the self-assessed reverse logistics capabilities scores for all
respondents
Rephrasing the hypotheses allows the research to determine for each hypothesis an independent group
variable and a dependent variable. Furthermore, a cut point is chosen within the group variable values,
dividing the respondents into two independent groups, one of which holds the companies that score
lower than the cut point, the other containing companies that score higher – for each construct. For the
cut point, the logical choice was made to use the overall mean of the grouping variable. The reason for
this choice is a possibly occurring response bias13 and halo effect (supra, p.19) and as a result, the
responding figures tend to be at the higher end of the scale, basically distorting the result. As a
13
Response bias is a type of cognitive bias which can affect the results of a statistical survey if respondents answer questions in the way they think the questioner wants them to answer rather than according to their true beliefs. This may occur if the questioner is obviously angling for a particular answer (as in push polling) or if the respondent wishes to please the questioner by answering what appears to be the "morally right" answer. URL: <http://en.wikipedia.org/wiki/Response_bias> (08/05/2009).
34
countermeasure, taking the overall mean of the answers will evidently result in two comparably sized
groups, with better-than-average and worse-than-average performers.
For each rephrased hypothesis, a zero-hypothesis is developed. This hypothesis states the opposite of
the hypothesis that needs to be researched. The t-value calculated by the T-test needs to be compared
with a critical value for 5% significance level and (n-1) degrees of freedom. If the value of t is larger than
the critical value, one can conclude that the zero-hypothesis is rejected on a 5% significance level. In
other words, the means for the dependent construct for both groups are significantly different.
However, before executing the T-test, the condition that the observations originate from populations
with equal variances, needs to be tested with a Levine test. If the result of the Levine test determines
that the variances of the two independent groups are not equal, the T-test is to be performed with a
corrected t-value. When the variances are equal, the original t-value can be used (De Pelsmaecker, Van
Kenhove, 2006).
4.3.2. Correlation analysis
Furthermore a correlation-analysis was done to research the interaction between the several
constructs, and to confirm the T-test results. In a correlation analysis the strength of the link between
the two variables will be measured. The strength of this linear association can be measured with a
correlation coefficient. The most common is the Pearson-correlation coefficient (De Pelsmacker, Van
Kenhove, 2006). The value of this correlation coefficient will vary between -1 and +1. The value -1
indicates a perfect negative relation between both variables, while a +1 indicates a perfect positive
relation between both the variables. The value zero means that there absolutely no linkage between the
variables.
4.3.3. Regression analysis
Finally, we examine whether it’s possible to develop a linear model using the 5 main constructs of this
research. With reverse logistics performance as the dependent construct Y and the other constructs as
independent/explanatory constructs or predictors, the equation becomes:
Y = A + aX1 + bX2 + cX3 + dX4 + η
• A = parameter that expresses how high the reverse logistics performance would be if all
constructs would be zero.
35
• a = parameter (coefficient) that expresses the effect of a change in resource commitment on the
reverse logistics performance of a company
• X1 = resource commitment
• b = parameter (coefficient) that expresses the effect of a change in commitment to learning on
the reverse logistics performance of a company
• X2 = commitment to learning
• c = parameter (coefficient) that expresses the effect of a change in reverse logistics capabilities
on the reverse logistics performance of a company
• X3 = reverse logistics capabilities
• d = parameter (coefficient) that expresses the effect of a change in strategic importance on the
reverse logistics performance of a company
• X4 = strategic importance
• η = error term, is treated as a random variable
Such a linear model could allow this research to further examine the impact of the constructs resource
commitment, commitment to learning, reverse logistics capabilities and the strategic importance on the
reverse logistics performance of the firm. To develop such a model, a linear regression analysis needs to
be done. This technique is developed to derive a linear model out of a cloud of data. A straight line is
calculated, which is the best possible linear representation of the link between the dependent variable
and the independent variables. But before executing this linear regression, a few conditions need to be
fulfilled. These conditions are (De Pelsmacker, Van Kenhove, 2006):
1. Causality: there needs to be an assumption of causality between the dependent variable and the
independent variables, this is satisfied by our hypotheses.
2. Linearity: the link between the independent variables and the dependent variable needs to be
linear. One can examine this condition by studying the scatter plots.
3. Take all relevant variables in consideration.
4. Multicollinearity: the presence of a high correlation between some of the explanatory variables
can lead to less reliable estimation of the coefficients of the predictors. This may be a risk in the
current research, because of the interrelationships between the constructs, as assumed in the
hypotheses.
5. Homoscedasticity: this is an important assumption for the validity of the regression model. It
means that for each value of the independent variables the error terms needs to have the same
variance.
6. Autocorrelation: this phenomenon does not need further explanation as it only occurs when the
regression analysis is based on time series.
36
7. Sufficient observations: the rule of thumb is that as many observations are needed as five times
the number of constructs.
8. No outliers: these are extreme observations, the estimated regression model will be drawn to
these extreme observations and will not be valid.
9. At least interval scaled variables: the scale used needs to have equal appearing intervals.
10. Logical interpretation: the result of the regression needs to be logically interpretable. For
example if the result of the regression would be that marketing has a negative effect on sales,
the result would not be considered valid as multiple studies have already confirmed the
opposite.
The current research does not comply with all of these conditions, and a brief examination of the scatter
plots (see figures 8 – 11) shows that there is almost no linear association between the independent
variables and the dependent variable. This is confirmed by the corrected R² of the regression model, a
figure that tells how well the regression line approximates the real data points. The corrected R² of this
model is only 46%, less than the minimal required 50%14.
Figure 8 - Learning - reverse logistics performance
14
This is a rule of thumb, according to De Pelsmacker and Van Kenhove (2006)
37
Figure 9 - Resource commitment - reverse logistics performance
Figure 10 - Reverse logistics capabilities - reverse logistics performance
38
Figure 11 - Strategic importance - reverse logistics performance
Furthermore a calculation of the correlations between the several independent variables shows that
there is a significant correlation between reverse logistics capabilities and the strategic importance
(0,563), and between resource commitment and strategic importance (0,461), as assumed in the
hypothesis development. Because of these correlations, several coefficients will reflect the effect of one
construct on another construct with which the former highly correlates. Hence, the estimation of the
coefficients will be less reliable. This means that this research does not fulfil the multicollinearity
condition. As the current research does not comply with the condition of multicollinearity and the
explanatory power of the model is minimal, further investigation in the existence of a linear model
seems pointless.
39
5. Results
A reliability analysis of the research first validates the study. This is done by testing the internal
consistency of the constructs and assessing a possible non-response bias. Next, the results of the T-test
and correlation analysis are discussed. The similarities between the different market players are briefly
depicted.
5.1. Reliability analysis
The constructs used in the current research are tested during the analysis phase of the research, by
using the Cronbach’s alfa analysis. This test/analysis gives a value (between 0 and 1) for the internal
consistency of the attributes of a construct. A value higher than 0,70 implies that the attributes are
internally consistent. If the value is lower than 0,70, the item/attribute with the highest value for ‘alpha
if item is deleted’ will be deleted. The value of Cronbach alfa may not exceed 0,95, because then the
items are measuring the same aspect of a construct. All the major constructs used in the research show
a Cronbach alfa that exceeds the value 0,70, as is shown in Table 3. Hence these constructs can be
considered reliable.
Construct Cronbach alfa
Resource commitment
Commitment to learning
Reverse logistics capabilities
Strategic importance
Reverse logistics performance
0,907
0,928
0,839
0,938
0,830
Table 3 - Cronbach alfa: internal consistency of the constructs
Previous research (Daugherty et al., 2005) has shown that in order to examine a possible non-response
bias, the respondent companies can be divided into groups equivalent to the several mailings, and
tested for group differences. In the current research, the respondent companies are divided into two
groups. The first group contains the respondents to the first mailing, while the second group contains
non-respondents from the first mailing, who responded to the second mailing. Both groups are tested
on differences for all relevant variables, and if both groups return the same results, a non-response bias
can be excluded. An independent T-test is used to compare the means of both groups for each relevant
variable of the current research, and no significant differences (p-values > 0,05) between the two groups
are found (Table 4).
40
Construct p-value
Learning
Resource commitment
Economic performance
Reverse logistics capabilities
Strategic importance
0,325
0,637
0,667
0,092
0,820
Table 4 - Non-response bias: p-values
5.2. Discussion of the results
The hypotheses are tested with an independent T-test (supra, p.32). The results are shown in Table 5.
Hypothesis Dependent variable Grouping variable Cut point p Confirmed by
corr. analysis
1a Reverse logistics
performance
Resource commitment 5,05 0,016 Yes
2a Reverse logistics
performance
Commitment to learning 5,74 0,031 No
2b Reverse logistics
capabilities
Commitment to learning 5,74 0,003 Yes
3a Reverse logistics
performance
Strategic importance 5,71 0,001 Yes
3b Resource commitment Strategic importance 5,71 0,017 Yes
3c Reverse logistics
capabilities
Strategic importance 5,71 0,008 Yes
4a Reverse logistics
performance
Rev. logistics capabilities 5,28 0,005 Yes
Table 5 - Results: testing the rephrased hypotheses
The results show that all hypotheses were found to be significant (p-values < 0,05). Hence one can state
that within the printer aftermarket, companies that do one or more of the following:
41
- allocate more than average amounts of resources to reverse logistics programs,
- have more than average commitment to learning,
- achieve more than average proficiency in reverse logistics capabilities
- attribute more than average strategic importance to reverse logistics,
will enjoy a higher reverse logistics performance than other companies, albeit to varying degrees. This
means that resource commitment, commitment to learning, strategic importance, and specific reverse
logistics capabilities have a direct positive impact on the economic performance of the reverse logistics
activities. Furthermore, companies that attribute a more than average strategic importance to reverse
logistics, will commit more resources to reverse logistics activities, and will be more effective in
executing specific reverse logistics activities than other companies. Hence, the strategic importance of
reverse logistics will have a direct positive impact on the commitment of resources and on being capable
in the specific reverse logistics activities. Therefore, the indirect effect of strategic importance on the
reverse logistics performance is demonstrated. Companies that have a more than average commitment
to learning, will be more capable in executing reverse logistics activities than other companies.
Therefore, commitment to learning has a positive effect on being capable in reverse logistics activities.
Thus the indirect effect of learning on reverse logistics performance is demonstrated. Figure 12 shows
the conceptual model with the appropriate significances.
It is interesting to note that there is no significant difference between OEMs and remanufacturers
regarding the construct strategic importance (p-value: 0,827 > 0,05). Both market players perceive
3a
3b
3c
1a
4a
2a 2b
Strategic
importance of
reverse logistics
Commitment to
learning
Reverse Logistics
capabilities
Resource
Commitment
Reverse logistics
performance
Figure 12 - Conceptual model with significances
0,001
0,016 0,017
0,008
0,005
0,003
0,031
42
reverse logistics as of equal strategic importance, despite the fact that OEMs consider reverse logistics
not to be their core business whereas remanufacturers do. A possible explanation is the fact that OEMs
apply reverse logistics mainly to restrict remanufacturers from acquiring the input resources (used
cartridges) needed to remanufacture. This enables OEMs to keep competing with the remanufacturers
on the printer cartridge aftermarket (supra, p.8). In fact, no significant differences are found in the
results of OEMs, remanufacturers, professional brokers and recyclers, for all relevant variables.
The results from the correlation analysis (see Table 6) confirm all the results found with the T-test,
except for the construct learning which shows no significant correlation with the reverse logistics
performance. This outcome is in contradiction with the earlier findings for hypothesis 2a and endangers
the validity of this result. Brief examination of the scatter plot of commitment to learning on reverse
logistics performance show that the observations contain a few extreme points. Because of the rather
small amount of observations these extremes could influence the results concerning the effect of
commitment to learning on reverse logistics performance.
Correlations
Resources-
commitment
Learning Economic
Performance
RevLog-
Abilities
Strategic
Importance
Resources
commitment
Pearson Correlation
Sig. (2-tailed)
N
1
46
,346*
,019
46
,501**
,000
46
,349*
,018
46
,461**
,001
46
Learning Pearson Correlation
Sig. (2-tailed)
N
,346*
,019
46
1
46
,179
,233
46
,309*
,037
46
,198
,187
46
Economic
Performance
Pearson Correlation
Sig. (2-tailed)
N
,501**
,000
46
,179
,233
46
1
46
,595**
,000
46
,611**
,000
46
RevLog
Abilities
Pearson Correlation
Sig. (2-tailed)
N
,349*
,018
46
,309*
,037
46
,595**
,000
46
1
46
,563**
,000
46
Strategic
Importance
Pearson Correlation
Sig. (2-tailed)
N
,461**
,001
46
,198
,187
46
,611**
,000
46
,563**
,000
46
1
46
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
Table 6 - Correlation matrix
43
6. Conclusion
6.1. Discussion
Rubio et al. define reverse logistics as “the process of planning, implementing and controlling backward
flows of raw materials, in process inventory, packaging and finished goods, from a manufacturing,
distribution or use point, to a point of recovery or point of proper disposal” (Rubio, Chamorro,
Miranda, 2008).
Reverse logistics is both a young business and a young research field, with most publications dating back
roughly only from 1995, when reverse logistics was consolidated as a scientific area. Within these
publications, the largest part discusses mathematical models (Rubio et al., 2008), as until recently,
reverse logistics has been approached pragmatically, with a focus on problem solving (Prahinski,
Kocabasoglu, 2006).
However, we found that a large gap exists between theory and practice. While a lot has been written,
few logistics service providers are aware of the concept reverse logistics, let alone the reverse logistics
needs of their clients. Furthermore, regardless the amount of available theories and models, theory
rarely reaches managers struggling to manage their reverse flows (Krumwiede, Sheu, 2002).
Within literature, as there has been such an emphasis on mathematical models and practical
approaches, the strategic aspect has always been of secondary importance (Prahinski, Kocabasoglu,
2006). As some authors note, more research into the strategic implications of reverse logistics decisions
is needed.
Developing reverse logistics activities in a company requires certain new capabilities (Autry, Daugherty,
Richey, 2001), as well as sufficient amounts of financial, managerial and technological resources. In
order to be effective, a stimulating learning environment would seem necessary and reverse logistics
should be adopted in the strategic positioning of the company. The aim of this research was to validate
these statements, in order to provide ground to companies, to engage in the different organizational
aspects that sustain the reverse logistics performance in a direct or indirect way.
This was done by developing and testing seven hypotheses, all stating an impact of one of the constructs
mentioned above, on another construct or directly on reverse logistics performance. Strategic
importance turns out to have a definite positive direct impact on the reverse logistics performance and
44
on the construct reverse logistics capabilities, and a positive (although slightly smaller) impact on
resource commitment. Both resource commitment and reverse logistics capabilities have a positive
impact on the reverse logistics performance, leading to a clear positive indirect effect of strategic
importance on reverse logistics performance through resource commitment and reverse logistics
capabilities. The last construct of the research is learning. Here, a clear answer is more difficult as the
results contradict. Hence, no clear conclusion can be drawn.
With regards to the results of the research, a few recommendations can be made for companies that
want to improve the economic performance of their reverse logistics activities. Good performance re-
quires reverse logistics to be part of the strategic thinking within the company. Managers throughout
the company should be aware of the impact of the reverse activities on their firm, for many different
reasons. Not only will reverse logistics positively impact the image towards customers, it also makes the
company more flexible in acquiring resources. Input material can be retrieved from what would
otherwise be land filled, allowing companies to cut costs. Reverse logistics also support customer service
activities. When products are dead on arrival, the products are to be retrieved and replaced in the
shortest possible time. Another important reason is that managers, aware of the reverse logistics issues
within their company, will have a keener eye for opportunities and threats to the reverse activities. They
will see possibilities to integrate the reverse chain with the forward chain, further cutting costs and
streamlining the processes. This will lead to better performance, and in the end, more value creation.
More strategic attention to reverse logistics will also have a positive effect on the development of the
necessary capabilities as well as on the resource commitment, as the reasons for investing resources in
the reverse activities will now have become obvious.
More resources are to be committed to the reverse logistics activity in the company to further improve
the economic performance. The number of people assigned to the reverse activities, as well as the
financial and technological commitment, should be on par with the magnitude of these activities. In
order to achieve superior performance in reverse logistics, specific capabilities are to be developed and
improved. The ease with which a firm can obtain a return authorization, the smoothness with which the
reconciliation of chargebacks are handled, the duration of credit processing, the quality and the
timeliness of the repair of rework are important factors that determine the capability of the company in
the reverse activities.
Although no statistically based conclusion can be drawn from the research figures, the fact that almost
all the respondents estimate learning as very important to their company, leads us to believe that
learning is not to be underrated. Reverse logistics is still a very young dimension within supply chain
management, leaving a lot of opportunities to improve and learn. And as the saying goes, “to stand still
45
is to fall behind”, so companies need to continually adapt and improve in order to compete in a
dynamic environment.
6.2. Limitations
A limitation of this research is the sample size. Although the percentage of respondents was rather high,
in absolute figures the number of respondents was not very large. In part this is a logic consequence of
the fact that the part of the printer cartridge aftermarket that can be easily mapped, is small in itself,
with for example less than thirty original equipment manufacturers. However, apart from the construct
learning, the results from the different tests were not contradictory, which suggests that they
are relevant.
Another drawback is the nature of the construct relations measurement. Relations between constructs
were measured using self-assessment by the respondents, a common approach within survey research.
As the scale items were taken from sound past research or constructed from careful literature review,
we believe that any potential bias was avoided as good as possible. Nevertheless, self-report choice
situations may always lead to a certain social desirability response bias15, as stated by Arnold and
Feldman (Arnold, Feldman, 1981). As the research is aimed at rather general constructs, this should not
endanger the results.
Important to note is that this research has focused exclusively on the printer aftermarket, making it
difficult to generalize the results to other industries. Differences may occur as within the printer
aftermarket, the interest in reverse logistics may be greater than in many other industries, due to –
among others – the competitive aspect. Original equipment manufacturers are pressed to set up reverse
logistics activities, in order to prevent remanufacturers – who are specialized reverse players – from
acquiring input resources allowing them to capture a market share with far cheaper alternative
cartridges. If OEMs do not comply with the changing market environment, they risk going out of
business.
15
the disparity between information that a survey respondent provides and data analysis, for example, a person claiming to watch little television but giving answers showing 30 hours' weekly viewing (BNET Business Dictionary – <http://dictionay.bnet.com>)
46
6.3. Future research
In order to validate the research results, a study could be set up to measure the constructs proposed in
this thesis, in a deeper and more objective manner. As self-assessment is prone to response bias, case
studies would be an excellent way to deepen the constructs, and achieve more concrete business
recommendations. Objective sources such as year reports could be used to assess resource commitment
and economic performance of the reverse logistics activities, in close cooperation with the person
responsible for the reverse chain. A company’s learning orientation could be measured by the number
of training sessions, both internally and externally, as well as the presence of knowledge sharing
procedures. Strategic importance and capabilities can be assessed by discussing respectively the
company’s mission statement and procedures with managers.
As discussed above, this thesis only focuses on one specific industry. As Daugherty et al. (2005)
researched the effect of resource commitment on performance in the automobile aftermarket, and
found a different result (“no direct, significant relationship was found between resource commitment to
reverse logistics programs and economic or service quality-related performance.”), we believe that
more differences could exist between different industries. Hence, it would be interesting to repeat the
current research in other industries, and to compare the respective results. A useful tool to map the
industries is the reverse logistics framework by de Brito and Dekker (2003), which could help explain
these differences. In fact, a set of characteristics could be listed that define the companies’ behavior
concerning the mentioned constructs within each industry, which could lead to an extended framework
with prescriptive qualities. A new company starting in the apparel industry, for example, could then
know on beforehand what the most important constructs are in that particular industry, and focus on
those constructs that will boost the company’s performance.
What is the impact of the financial crisis and the economic recession on reverse logistics? This is an
interesting and topical research question. In fact, there are two sides to the reverse logistics coin. On
the one hand, recession leads to declining raw material prices. As a result, there is a decrease in value of
goods returned, and the cost-benefit analysis of the reverse activities may be a lot different. Is it then
more valuable to collect and repair products, or is there more value to be found in simply replacing
defective products with new ones, if raw materials are so cheaply available? In that case, might one go
as far as to state that reverse logistics is rather a symptom of economic welfare?
On the other hand, Horst Boellmann, founder and chairman of Per-fil Industries, a well respected
business man who has been in the printer cartridge aftermarket since its infancy stage, claims that the
47
demand for remanufactured products will still increase, as price will remain the dominant characteristic
in times of recession.
6.4. General conclusion
Reverse logistics is a young area in business and scientific interest. A lot of strategic aspects such as
resource commitment, commitment to learning, the presence of specific reverse logistics capabilities
and strategic attention for reverse logistics have an impact on the performance of reverse
logistics activities.
We have researched the impact of these four different aspects on the economic performance of reverse
logistics activities. With the exception of commitment to learning, each of these aspects are important,
and should be developed in order to improve the reverse logistics performance.
VI
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VII
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VIII
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IX
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Exhibit 1-1
8. Exhibits
8.1. Exhibit 1 – list of sample population
Company name Type of business
3-Ink Technology Limited Remanufacturers 3T Supplies AG Remanufacturers Afex International (HK) Ltd Remanufacturers Aicon Image Co, Ltd Remanufacturers Aksel Dis Ticaret AS Remanufacturers All-Fill International Ltd Remanufacturers AlphaChem Europe GmbH Remanufacturers Anycolor Computer Consumables Co, Ltd Remanufacturers Apex Microelectronics Co, Ltd Remanufacturers Apple OEM Artech GmbH Remanufacturers Ascend Office Accessories Ltd Remanufacturers Baltea Toner Srl Remanufacturers Biuromax Sp Z o o Remanufacturers Bright Image Remanufacturers Brother OEM Canon OEM Cartridge Web Remanufacturers cartridgepower Professional Broker Cartridge-Space Remanufacturers Cartridgeworld Remanufacturers CBC (Deutschland) GmbH Remanufacturers CBR Engineering AG Remanufacturers CEMS Co., Ltd Remanufacturers CF Technologies NV Remanufacturers China Eternal Copiers Technology Co, Ltd Remanufacturers Chip Solution (Hitech) Company Remanufacturers ClozDloop Recyclers Collect GmbH Professional Broker Color Imaging, Inc Remanufacturers Combase Inc Remanufacturers Compatech GmbH Remanufacturers Compedo Vertriebs-GmbH Remanufacturers CONIBI Professional Broker Coolrec France Recyclers Core Servicios informaticos Professional Broker Creative Imaging Technologies BV Remanufacturers
Exhibit 1-2
Creative Imaging Technology Co, Ltd Remanufacturers Cross Imaging Supplies GmbH Remanufacturers CS Computer Supplies GmbH Remanufacturers Data Serv GmbH Recyclers DCI/Jet Tec GmbH Remanufacturers Delacamp Aktiengesellschaft Remanufacturers Dell OEM Dematec Remanufacturers DPI Solutions, Inc Remanufacturers Eco Service S.P. z.o.o. Remanufacturers Ecolider SL Remanufacturers Eco-Recuperi SRL Professional Broker Elfotec Technology Ltd Remanufacturers Embatex AG Remanufacturers Enviroprise Recyclers Epson OEM Equiprint Remanufacturers Ever Peak International Ltd Remanufacturers Everbright Rubber Mfg Ltd Remanufacturers Excelsis Enterprises Ltd Remanufacturers First Ink Manufacturing Ltd Remanufacturers FM Supplies Tonerpak Remanufacturers Foshan Hyson Office Equipment Co, Ltd Remanufacturers Frequent Filler Remanufacturers FuchsPack Remanufacturers Fuji Electric Device Technology Europe GmbH Remanufacturers Grey Systems GmbH Remanufacturers Guangzhou Comet Chemical Co, Ltd Remanufacturers Hangzhou Huifeng Technology Co, Ltd Remanufacturers Hotsun Imaging Products Co, Ltd Remanufacturers Iberlaser Lda Remanufacturers IBM OEM IMEX EU Trading SRL Remanufacturers Indian Toners and Developers Ltd Remanufacturers Infotec OEM Ink Lab (HK) Company Limited Remanufacturers Inkstar Office Appliance Factory of Tianjin Remanufacturers InkTec GmbH Remanufacturers Innotec SAS Remanufacturers Integral International GmbH Remanufacturers International Technology Products (UK) Ltd Remanufacturers Invegon Equip AB Remanufacturers IPM Remanufacturers Jack & Rich Technology Ltd Remanufacturers Jadi Imaging Technologies Sdn Bhd Remanufacturers Jahwa Electronics Co, Ltd Remanufacturers
Exhibit 1-3
JeRo - Productions Primabat® GmbH Remanufacturers Jet Rise Technology Limited Remanufacturers JetTrueMedia Digital Image Material Co, Ltd Remanufacturers Jiashan Xianfeng Office Equipment Co, Ltd Remanufacturers Jiaxing Tianma Printer Consumables Co, Ltd Remanufacturers Jiaxing Yazhong Ribbon Co, Ltd Remanufacturers Katun Corporation Remanufacturers KMP PrintTechnik AG Remanufacturers Kolion Technology Co, Ltd, Zhuhai Remanufacturers Krystal Inkz Remanufacturers Kyocera OEM Lexmark OEM Lobozar Technik Remanufacturers LVL Professional Broker Master Ink Co., Ltd Remanufacturers Maxtec China Limited Remanufacturers Mba Polymer Inc Recyclers Medifill Remanufacturers Menston Limited Remanufacturers Microjet Technology Co, Ltd Remanufacturers MIPO Technology Limited Remanufacturers MMC Remanufacturers MSE Micro Solutions Enterprises (Europe) Remanufacturers Multi Union Trading Company Limited Remanufacturers Nashuatec OEM NDC Ltd Remanufacturers NEW-TEKK Supplies GmbH Remanufacturers Ninestar Image International Ltd Remanufacturers Ningbo Hentek Image Co, Ltd Remanufacturers Nitto Techno Co, Ltd Remanufacturers NS Technology (HK) Ltd Remanufacturers Nuolite Technology Co, Ltd Remanufacturers NuPro Remanufacturers Océ OEM OCP GmbH Remanufacturers Oki OEM Orink Infotech International Co, Ltd Remanufacturers OvimoPlastics Recyclers Panasonic OEM Panford Enterprises Ltd Remanufacturers Partsmart Europe GmbH Remanufacturers PBT International Ltd Remanufacturers Pelikan Hardcopy Production AG Remanufacturers Planet Green Remanufacturers PowerVip Senhill, SL Remanufacturers Prinko Image Co, Ltd Remanufacturers
Exhibit 1-4
Printchip International Ltd Remanufacturers Printec Europe GmbH Remanufacturers Printer Italia s.r.l Remanufacturers PrinterMayin Remanufacturers Printpro Technology Co, Ltd Remanufacturers Prism Technology Co., Ltd Remanufacturers Pro Color Technology Ltd Remanufacturers Product Line Services Remanufacturers Producton Srl Remanufacturers Promax Imaging Ltd Remanufacturers PS-Printservice GmbH Remanufacturers PTC Holdings Limited Remanufacturers QMS OEM Reclaim IT Remanufacturers Recyca Bvba Professional Broker Redeem Recyclers Retech Technology International Limited Remanufacturers Richeng Technology Remanufacturers Ricoh OEM Rima Recycling Recyclers Rincato Professional Broker Sagem OEM Samsung OEM SEA Srl Remanufacturers Sensient Colors UK Ltd Remanufacturers Shanghai Anerya Environmental Technology Co, Ltd
Remanufacturers
Shanghai Anpoll Computer Technology Co, Ltd Remanufacturers Shanghai Xinzhan Rubber Co, Ltd Remanufacturers Sharp OEM SIIX Europe GmbH Remanufacturers Skywell Digital Technology Inc Remanufacturers Speed Infotech Holdings Ltd Remanufacturers Spring Global Mail Professional Broker Static Control Components (Europe) Ltd Remanufacturers STS Refill Europe Remanufacturers Tenka Group - Tenka Nylon Fabric for Printer Ribbon
Remanufacturers
Tesen Printout Device Co, Ltd Remanufacturers Thans Plastics Recyclers The AQC Group Ltd Remanufacturers Tianxiang Modern Office Appliance Co, Ltd Remanufacturers Tihan Industry Limited Remanufacturers Toei Technology Corporation (TTC) Remanufacturers Tomson Bvba Professional Broker Toner Services Remanufacturers
Exhibit 1-5
Toshiba OEM Triton Precision Engineering Company Ltd Remanufacturers Turbon Remanufacturers Uni-1 Technology Limited Remanufacturers Uninet Imaging Europe S.L Remanufacturers Union Technology International (MCO) Co, Ltd Remanufacturers UniPlus Technology Corp Remanufacturers UR Inkjet Deutschland GmbH Remanufacturers Urban Element Design Solutions Remanufacturers Van Gansewinkel Recyclers WeCare4 Remanufacturers Xerox OEM Xiamen O-Atronic Computer Material Co, Ltd Remanufacturers XPS Remanufacturers Zapravka Ltd Remanufacturers Zhejiang Sunrising Office Consumable Material Co, Ltd
Remanufacturers
Zhuhai Benma Printmax Imagine Co, Ltd Remanufacturers Zhuhai De Jian Co, Ltd Remanufacturers Zhuhai Mingjia Electronics Co, Ltd Remanufacturers Zhuhai O&Q Printer Accessories-Making Co, Ltd Remanufacturers
Exhibit 2-1
8.2. Exhibit 2 – Questionnaire
1 Respondent information (All information will be treated strictly confidential)
2 General information
Transport and distribution
Automotive
Chemical and Petrochemical
Textile and clothing
Construction materials
Telecommunications and ICT
Fast moving consumer goods
Agriculture and food
Pharmaceutical
Retail
Packaging
Public services
Consumer electronics
Printer cartridge aftermarket
Other:
Reverse logistics stands for all operations related to the reuse of products and materials. It is "the process of planning,
implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and
related information from the point of consumption to the point of origin for the purpose of recapturing value or proper
disposal." (More: http://en.wikipedia.org/wiki/Reverse_logistics)
REVERSE LOGISTICS QUESTIONNAIRE
Reverse logistics is quickly gaining attention, as the return flow of 'waste' (in fact all products that are to follow the
opposite supply chain direction) offers opportunities for cost-cutting or profit-making. Nevertheless, little is known
about the strategic aspect of reverse logistics within the organization.
This questionnaire is developed to assess the impact of organizational learning, resource commitment and strategic
orientation on the performance of the reverse logistics activity.
We would be grateful if you would be so kind as to take 15 minutes to fill in this short questionnaire.
Gertjan De Boever and Thijs Van de Velde,
Students Master in Commercial Engineer, Ghent University, Belgium.
In what industry is your company active?
Respondent function:
Company name:
Core activity:
Respondent name:
E-mail:
Country:
Exhibit 2-2
< 1 mio
1-10 mio
11-25 mio
26-50 mio
51-100 mio
101-250 mio
251-500 mio
> 500 mio
Please indicate the number of employees in your company:
< 10
11-50
51-100
101-500
501-1000
1001-5000
> 5000
Forward supply chain actor (such as supplier, manufacturer, wholesaler and retailer)
Specialized reverse chain player (such as jobbers, recycling specialist, etc.)
3 Your company and reverse logistics
Please indicate how often reverse flows are dealt with, and whether they are considered to be a core activity.
How does your company profile itself?
Please indicate your company's turnover of last year in EUR:
To what extent does your company deal with reverse flows and reverse activities?
Rare o
r neve
r
to sm
all ext
ent, on
irregu
lar b
asis
Often an
d on a
regu
lar
basis,
not a
core
act
ivity
Often an
d on a
regu
lar
basis,
and a
core
activ
ity
consumer goods (apparel, furniture, and a
vast variety of goods)
packaging and distribution items
spare-parts
civil objects (waste from buildings, dikes,
bridges, roads, etc.)
ores, oils and chemicals
other materials (like pulp, glass and scraps)
consumer goods (apparel, furniture, and a
vast variety of goods)
industrial goods (e.g. military and
professional equipment)
Exhibit 2-3
Why-drivers: reasons for reverse activities.
Please indicate the main reasons why following products are returned:
(multiple answers are possible)
Econom
ics -
finan
cial r
easons
Legisl
ation
Corpora
te ci
tizensh
ip
Man
ufact
uring r
eturn
s
Distrib
ution re
turn
s
Custom
er retu
rns
consumer goods (apparel, furniture, and a
vast variety of goods)
There are many reasons why products are returned. Companies engage in reverse logistics because they can
profit ( economics ) from direct gains (input materials, cost reduction, value added recovery) or indirect gains
(market protection, green image, improved customer/supplies relations), because they have to ( legislation
and/or because they feel socially motivated to do so ( corporate citizenship ). Other products are returned
because they do not function properly or because their function is no longer needed.
These returns include:
- Manufacturing returns: raw material surplus, quality control returns, production leftovers, by-products
- Distribution returns: product recalls, commercial returns, stock adjustments, packaging and distribution items
- Customer returns: B2C commercial returns, warranty returns, service returns, end-of-use returns, end-of-life returns
consumer goods (apparel, furniture, and a
vast variety of goods)
industrial goods (e.g. military and
professional equipment)
spare-parts
packaging and distribution items
civil objects (waste from buildings, dikes,
bridges, roads, etc.)
ores, oils and chemicals
other materials (like pulp, glass and scraps)
Exhibit 2-4
4 Commitment to learning
Strongly Strongly
disagree agree
5 Resource commitment
Little Substantial
Learning is more than training and education, it is part of a company's culture. It's investing in improvement,
rethinking the firm and the ability to continually adapt to a changing environment. Flexibility, willingness to
change and an open mind are essential.
(1: strongly disagree; 7: strongly agree)
1 2
1
7
4 5 6 7
Please indicate your level of accordance with the following statements related to your company:
learning as key to improvement
The basic values of our organization include2 3
6
3 4 5 6Managers in our organization basically agree that
learning is the key to our competitive advantage
7learning is an investment, not an expense
1 2 3 4 5 6
The sense within our company is that employee1 2 3 4 5
7necessary to guarantee organizational success
6 7
Please indicate the levels of commitment of following resources to reverse logistics within your
company: (1: little; 7: substantial)
Technological resources (technological support for
reverse logistics, e.g. specific software; hardware)1 2 3 4 5
(assignment of personnel to reverse logistics)
6 7
Managerial resources1 2 3 4 5 6 7
Learning in our organization is seen as a key
Financial resources (capital) 1 2 3 4 5
Exhibit 2-5
6 Economic performance
Not at all Extremely
important important
Not at all Extremely
effective effective
Reducing inventory investment
1 2 3 5
Cost containment
Improving profitability
Improving labour productivity
Reducing inventory investment
2 3 4 5
Improving labour productivity
1 2 3 4 5
6 7
1 2 3 4 5 6 7
4
6 7
1 2 3 4 5 6 7
1
4 5 6 7
1 2 3 4 5 7
Improving profitability 1 2 3
1
Please indicate how important following reverse logistics objectives are within your company:
(1: not at all important; 7: extremely important)
4 5
Recovery of assets
reverse logistics and handling of returned merchandise: (1: not at all effective; 7: extremely effective)
Please indicate how effective your company has been in achieving the following objectives related to
6 7
765432
Cost containment 1 2 3 4
Recovery of assets
1 2 3
5 6 7
6 7
6
Exhibit 2-6
7 Reverse logistics abilities
Not at all Extremely
capable capable
8
Strongly Strongly
disagree agree
Reverse logistics is important for the functioning
Reverse logistics plays an important role in the
Please indicate how capable your company is in each of the following reverse logistics abilities:
(1: not at all capable; 7: extremely capable)
Ease of obtaining return authorization 1 2 3 4 5 6 7
Handling reconciliation of chargebacks 1 2 3 4 5 6 7
6 7
Quality of repair/rework 1 2 3 4 5 6 7
Length of time for credit processing 1 2 3 4 5
6 7
Strategic importance of reverse logistics
Please indicate your level of accordance with the following statements related to your company:
(1: strongly disagree; 7: strongly agree)
Achieving objectives within reverse logistics1 2 3 4
Timeliness of repair/rework 1 2 3 4 5
5 6 7contributes to achieving the organizational goals
strategy of your company
of your company
1 2 3 4 5
1 2 3 4 5 6 7
future success
6 7
Reverse logistics is important for your company's1 2 3 4 5 6 7
