Every organization with reverse logistics, returns, collections, and recovery must be very efficient. However, not many supply chains have reverse logistics due to third-party partnerships and other internal factors. The lack of efficient reverse logistics can hurt the return policy, drag collections, and frustrate the recovery. A seamless reverse logistics is especially important for recyclable goods and disposal. Besides, the back supply when customers return goods relies on efficient reverse logistics. The lack of smooth reverse logistics could have serious environmental effects, mostly for disposable goods. According to Govindan & Bouzon (2018), reverse logistics must comply with environmental sustainability. Over time, government and state regulators are enacting stiffer environmental compliance laws. The stricter laws demand organizations to increase their conservation consciousness and replicate the same to their customers. For instance, retail stores often require customers to return polythene packaging after purchasing the products.
Reverse logistics is an essential yet challenging element of the supply chain. The proposed research will analyze the common reverse logistic challenges in the modern supply chain industry. Givindan & Bouzon (2018) posit that 21st-century environmental demands have shaped the logistics industry. However, reverse logistics is largely run by business sustainability like any other industry. According to Richnak and Gubova (2021), business sustainability is critical in reverse logistics planning. Even though businesses must comply with strict environmental laws on return, collections, and recovery, they still have to make profits. The supply chain industry comprises business entities that have to make profits to be sustainable. Existing research on reverse logistics does not address the fundamentality of returns, collections, and recovery. Much of the literature and research on reverse logistics is customer-centered. Over the last five years, there has been growing concern about environmentally friendly reverse logistics. The proposed study hypothesizes that organizations can have sustainable reverse logistics and business viable supply chains. The current study also fails to sufficiently address the global menace of returns and collections of electric waste.
Closed-Loop Supply Chain and Reverse logistics are considered environmentally sustainable business practices. Kazemi et al. (2018) observed the supply chain practices to potentially green up the normal supply. The research by Kazemi et al. is widely acclaimed of the environmental efforts by logistical companies in past and present literature. However, the study did not address the gap in business sustainability. Many studies are done before 2017 have not addressed business sustainability in reverse logistics. Present studies have not critically examined the environmental sustainability of reverse logistics in developing countries. Waqas et al. (2018) found that reverse logistics do not highly regard environmental conservation in Pakistan. The supply chain industry is highly motivated by business sustainability and profit-making. Whereas no specific study links the supply chain and developing country economies, present studies infer that companies focus on profit-making. There is, therefore, insufficient interest in return, collection, and recovery.
Electrical waste management is thought to operate a successful return, collection, and recovery supply chain. Doan et al. (2019) observed that electronic waste has increased due to massive upgrades on electronic devices. Therefore, electronic companies have adopted 6R ways of the disposal: redesign, remanufacture, reuse, recycle, reduce and recover (Doan et al., 2019). Doan et al. (2019) studies four main factors affecting reverse logistics in electronic waste management: issues affecting implementation; the performance assessment and decision making of reverse logistics; predicting number of goods that could be returned and the network design of the reverse logistics department. The study fails to highlight the challenges facing electronic waste management in developing countries and address them. In Italy, Isernia et al. (2019) observed that the implementation of Waste Electrical and Electronic Equipment (WEEE) reverse logistics did not effectively achieve the European targets from electrical waste management in some provinces. However, in other provinces, successful collection and sensitization of citizens on the importance of the collection of outdated products led to the successful implementation of the WEEE regulations (Isernia et al., 2019). The main challenge was mostly due to ineffective management practices in the reverse logistics department (Isernia et al., 2019). However, the study fails to highlight how reverse logistics offers environmental and business sustainability for Italy.
The above literature indicates that companies are aware of the regulations requiring reverse logistics departments to handle returns, collections, and recovery of defective or disposed products. However, various challenges affect the effective implementation of reverse logistics practices by organizations.
Poor management skills affect the reverse logistics process. The study by Isernia et al. (2019) indicates that one of the reverse logistics challenges in Italy was poor management practices. The management team was ineffective because it did not invest in collection infrastructure, which affected the collection of disposed of products (Isernia et al., 2019). Doan et al. (2019) also observed that collection points are essential in the reverse supply chain process since they help collect and sort out the products. Therefore, if the management makes poor decisions on where the collections should be located, accessibility can become an issue that prohibits the effectiveness of the entire process (Doan et al., 2019). Additionally, it would be important for the management team to develop a method of handling returned goods from the customers. A feedback technique that allows the management team to analyze the number of returned goods, reasons why consumers returned goods, and how to communicate these defects with the manufacturing unit would help reduce the rate of goods being returned to the business, which would maintain the business sales at the targeted level(Doan et al., 2019). A poorly selected reverse supply chain management team inhibits effective reverse logistics, leading to losses for the businesses, making it unsustainable.
Lack of public awareness also serves as a hindrance to an effective reverse logistics system. Doan et al. (2019) observed that electronic waste contained precious material and could be recycled, reused, and remanufactured, but it also contained hazardous elements that affect the environment. Therefore, it is important for companies manufacturing electronics to develop a proper collection and disposal system. Reverse logistics would immensely save costs for the electronics manufacturing companies since they would recycle, redesign and remanufacture some of the components in the collected products reducing the cost of their raw materials. Furthermore, in areas where collection infrastructure was in place, and the citizens were not aware of these collection areas, they did not care to dispose of the products correctly (Isernia et al., 2019). The findings in Italy indicate that whenever management fails to invest in the infrastructure needed for reverse logistics practices, it poses a problem to the entire process. Furthermore, the companies must raise awareness levels amongst their consumers to help the process by returning or disposing of goods through the appropriate channels. Reverse logistics rely on collection and recycling activities that aid in ensuring business sustainability (Doan et al., 2019). If the general public does not know that the company has specific collection places for the disposed of goods to be delivered, they will certainly not dispose of them appropriately. Additionally, if consumers are not aware of the environmental effects poor disposal of certain products would cause, then they continually litter these products anywhere.
Reverse supply chain practices are essential for a business’s successful return, collection, and recovery chain. Furthermore, efficient reverse supply practices could contribute to business and environmental sustainability. There have been numerous addressing the environmental benefits of reverse logistics but none address the gap on business sustainability. Businesses are sustained by profits and are motivated to engage in practices that help maximize profits and reduce costs. Looking at reverse logistics from a business sustainability standpoint may work well towards encouraging businesses to engage in reverse logistics. However, reverse logistics continues to be a challenge for most businesses since reverse supply practices are not economically sustainable. This study reviewed the literature on common reverse logistics challenges that affect business sustainability.
The findings indicate that poor management skills could collapse a reverse logistics system by managers making poor decisions about allocating financial resources and location of collection areas disposal of products. Electrical waste management involves the recycling, reusing, remanufacturing, and redesigning of disposed or returned products, which saves the company the cost of raw materials. Poor management skills could lead to an ineffective reverse logistics department that would ultimately incur losses for the business. Therefore, it is crucial to have a management team with the appropriate skill set for reverse logistics to be sustainable for a business.
Another common challenge facing reverse supply chain practices is the lack of public awareness. When the public is unaware that there are specific collection units for disposal of certain products and the environmental harm caused by poor disposal of certain products, especially electronic devices, they continue to dispose of them carelessly. Therefore, companies need to continually inform the public about the available collection areas and the harm that poor disposal of certain products causes to the environment. This way, the business can have a reverse logistics company that is operational, and that can help them reduce manufacturing costs.
Future research recommendation
This study focuses on reverse logistics, mainly for electronic waste management. Researchers could conduct more research in other industries such as the automotive industry, pharmaceuticals, luxury goods, and reusable packaging. A broader look in these industries would provide a more comprehensive report for the reverse logistics department.
This study highlights only two areas that a company could work on to economically sustainable reverse logistics department. More research could find out more ways in which companies can make their reverse supply chain departments more business sustainable.
Doan, L. T. T., Amer, Y., Lee, S. H., Phuc, P. N. K., & Dat, L. Q. (2019). E-waste reverse supply chain: A review and future perspectives. Applied Sciences, 9(23), 5195.
Isernia, R., Passaro, R., Quinto, I., & Thomas, A. (2019). The reverse supply chain of the e-waste management processes in a circular economy framework: Evidence from Italy. Sustainability, 11(8), 2430.