Reverse logistics and the strategic, effective and cost saving capabilities it has for the companies based on its antecedents is the topic of this research. This topic is chosen because of its high relevance for the growing retail industry as it provides a better and enhanced opportunity to build up stronger customer relations whilst cut costs. Though, implementing reverse logistics can be highly costly for those companies or retail organizations that do not have the capabilities required to effectively employ it. Reverse logistics is the process whereby the goods are moved back from their final destination towards the manufacturing concern for the purpose of value capturing or disposal of the product in proper form. The activities of remanufacture and refurbishment can also be acclaimed as part of the reverse logistics. Reverse logistics supersedes the mere reuse of containers or recycling of products. Also the activities of processing the returned products which are faulty and unusable, doing seasonal inventory, restocking, and salvaging, recalling, and processing inventory in excess also come under reverse logistics. Â Reverse logistics offer such capabilities that allow companies to enjoy immense cost savings. But to avail the benefits, it is essential to first get a thorough understanding as to what reverse logistics is, what its capabilities are and how can they provide cost savings. This is the purpose of the research and considering the high implications it presents to retail organizations and the companies alike, it has been chosen as the research topic. Retail organizations with lack of resources and capabilities to install and employ reverse logistics strategies, though can improve their customer relationships and attract and retain a large customer base, but can also provide huge costly investments which supersede the benefits that reverse logistics has to offer. Reverse logistics with its strategic advantages is becoming increasingly essential for supply chain management.
To justify the choice of the research topic, the following SWOT analysis presents a valid and vivid justification.
Strengths
- Reverse logistics is a highly researched topic as having gained recognition from various scholars and researchers in terms of effective strategically aligned advantages and benefits to offer to organizations and the growing retail industry and its effectiveness in building customer relationships all around the world.
- Previous researches have provided a solid background to further study and research on and discover new relationships and effective implementations of the concept
- Reverse logistics has the ability to produce a positive influence on the customer relationship management of a company thus, being a highly attractive topic to research on which presents highly relevant and valid solutions and insights to companies and especially retail organizations.
- Reverse logistics is now common and highly popular in major retail stores, both online and offline, supported with relevant researches in the subject area which provides a clear direction in this regard,
Weaknesses
Reverse logistics though is an area of vital importance in many organizations but its major role is in retail organizations. Not companies providing products and services have the opportunity to benefit from the emerging concept of reverse logistics, such as the service.
Opportunities
- It is a very broad subject area which presents various opportunities and various directions to go after for research, such as reverse logistics in the paper industry or in super markets.
- Though many researchers and practitioners in the area of reverse logistics have given this subject area ample importance and significance but a gap still exists to explore the key product flow in the supply chain management.
- Considering the fact that the reverse logistics process begins with the retailers who add in their capabilities to make the entire products returns process more effective, this research is focused on those reverse logistics capabilities that are added by the retailers when they return the products back to the company. These profound capabilities include the accuracy and the availability of relevant information to be used, the process and timeliness of the information regarding reverse logistics. Thus, one comes to know that the domain of reverse logistics is rather large and presents various aspects to study and present solutions or insights on that will be highly appreciated.
Threats
- Inaccuracy and unreliability of the results is a threat but much effort is laid out in the research to ensure that reliable results are obtained as the topic of high relevance to the companies.
- As this top is rather highly researched on especially during recent times, there may be possibility that a research on the topic chosen may be on its way, though functioned in a different fashion, as much focus has been on the distinction of this research topic and its execution.
When it comes to marketing and supply research work and academic literature ‘reverse logistics’ has obtained a due importance and significant consideration. This is so because of its ability to produce a positive influence on the customer relationship management of a company (Horvath et al., 2005). Reverse logistics also brings in important implications regarding cost for not only the firm itself but its suppliers as well (Daugherty et al., 2005). Retail organizations with lack of resources and capabilities to install and employ reverse logistics strategies, though can improve their customer relationships and attract and retain a large customer base, but can also provide huge costly investments which supersede the benefits that reverse logistics has to offer. Reverse logistics with its strategic advantages is becoming increasingly essential for supply chain management (Daugherty et al., 2001). Though many researchers and practitioners in the area of reverse logistics have given this subject area ample importance and significance but a gap still exists to explore the key product flow in the supply chain management (Srivastava and Srivastava, 2006). Reverse logistics domain is highly large, and the product returns process is one part of this domain which is highly effective in affecting customers’ buying decision and thus presenting a competitive advantage to the organization or company employing it (Stock et al., 2006). The modern customers are highly price conscious and monetarily concerned and bounded and are keen on avoiding all risk. Viewing this reality having a liberal returns policy such as reverse logistics helps highly in retaining customers. And with increasing online purchases, customers are growing concerns about having to return unfit products in similar fashion as they can do through stores, when needed.
Because of the high rate of customers’ returns of products, the retailers have had to bear extensive costs and have been forced due to financial restrictions to limit or withdraw their returns policies. Harris interactive through a survey research found out that.
This business strategy is now common and highly popular in major retail stores, both online and offline, supported with relevant researches in the subject area which provides a clear direction in this regard. This work has been built on the latest researches that were conducted on reverse logistics in the following domains: managing product returns (Stock et al., 2006); product returns processing (Stock and Mulki, 2009); antecedents and consequences of product returns (Petersen and Kumar, 2009); and developing effective logistics programs (Richey et al., 2005). But unlike these recent researches on reverse logistics, this particular research is hihgl focused on the viewpoint of the retailers who are a big part of the entire reverse logistics procedure and who perform a key role. Considering the fact that the reverse logistics process begins with the retailers who add in their capabilities to make the entire products returns process more effective, this research is focused on those reverse logistics capabilities that are added by the retailers when they return the products back to the company. These profound capabilities include the accuracy and the availability of relevant information to be used, the process and timeliness of the information regarding reverse logistics. Also included in the reverse logistics capabilities are the connectivity of internal and external information and its usefulness. Combined, these capabilities present an entire package of information-related processes which ensure that a company employs a highly effective reverse logistics procedure that would lead to a gradual cost reduction and cost saving.