Commercially Viable Reverse Logistics in Pakistan: Extending the Supply Chain for a Sustainable Competitiveness

Author(s)

Noman Ahmed , Kashif Sarwar – ,

Download Full PDF Pages: 54-65 | Views: 372 | Downloads: 107 | DOI: 10.5281/zenodo.3455966

Volume 3 - April 2014 (04)

Abstract

In today’s competitive business environment, companies with stronger Supply Chain are likely to cover the farthest of miles. In conventional business practices focusing only on financial bottom line, companies focus on their forward logistics. In recent times, mindsets have been changed owing to the underlying benefits of reverse logistics and its impact on company’s sustainable business. This study is an attempt to gain an insight into the transition process from conventional non-sustainable business practices toward more responsible practices. Reverse Logistics has gained more importance in recent times as it is known to reduce operational cost by reusing products or services. Also by implementing efficient reverse logistics strategies companies can gain more trust of their customers which result in more business with both social and economical benefits. However, this study suggests that the companies in Pakistan have been treating Reverse Logistics as cost center only and see it as part of conventional accounting, in contrast with modern approach of sustainable accounting. The study also suggests that the lack of commitment toward sustainable business practices is attributable to lack of awareness and benefits realization on part of the top management in a given company. The study has chosen three companies from three different industrial sectors namely Pharmaceutical Automobile and the Newspaper industry. Within each industry, three levels of participants were picked to represent Manufacturer, Distributors and Retailers. For each level three respondents were picked for interviews. The study intended to undertake an exploratory approach; therefore, direct interviews (structured) were conducted. Some of the variables playing part in dynamics of Reverse Logistics in Pakistan include Company’s competitive strategy, impact on profitability and possibility of reuse. .The study has also been viewed from viewpoint of Michael Porter’s Value Chain analysis. It is essential for all organizations to think in terms of extended organizations – and extended value chains. The study also tenders an explanation as to why and how managing the returned/reversed products bears competitive advantage for the participating companies, what are the types of returned products, what happened to the return products, who manages the returned product and what are the product recovery options. Return of the products strategy is unwilling for all three major industries Newspaper, Pharmaceutical and Automobile. It is found that the return of the products affects the customer retention, competition and penetration in general, whereas, in Auto industry clean channel is also resulted by dealing with return of the products. Life cycle of a typical product varies from industry to industry, however Life of the products is directly concerned with the rate of the Return of the products, lesser is the product life, the rate of return will be higher and bigger the product life lower the rate of the return. Profit factor also varies as newspaper and pharmaceutical industries have no major impact on their profit while automobile industry has 50 percent impact on their profit. We have also identified that there is no return policies in Newspaper industry for recycling purpose. However pharmaceutical industry focuses on awareness of reverse logistics. Auto Industry is focused only on profitable ventures in the area of reverse logistics, without any heed to the other two bottom lines i.e. Social and Environmental. Primarily, the objective is to minimize the return. 

Keywords

Reverse Logistics, Triple Bottom Line, Operational Tradeoffs, Corporate Social Responsibility, Environmental Impact & Compliance, Ethics, Product Lifecycle, Product Disposal & End of Life, 

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