Critical Barriers to Implementation of Reverse Logistics in the Manufacturing Industry: A Case Study of a Developing Country

Muhammad Waqas,Yuming Zhu,Muhammad Nadeem,Naveed Ahmad,Qian-Li Dong

doi:10.3390/su10114202

Abstract

Globalization policies are encouraging manufacturing companies to produce environment-friendly products that offer a sustainable competitive advantage. Currently, product recovery and zero-waste supply chains have caught the attention of manufacturers and professionals. Reverse logistics (RL) is considered as the most significant part of supply chain management in developed countries; unfortunately, its implementation in developing countries is in the initial stages due to certain barriers. This study aims to identify and verify the barriers to implementation of reverse logistics using a two-stage methodology: the Delphi Method and Structural Equation Modeling. A comprehensive literature review was considered to identify a primary set of barriers. Using the Delphi Method, a team of experts screened out barriers after performing three iterations. A survey-based questionnaire was then sent out to supply chain and logistics employees in the manufacturing industry and relevant government authorities. Five hundred and forty-seven useful responses were analyzed in the Statistical Package for the Social Science (SPSS) & AMOS 21 softwares using Structural Equation Modeling to verify barriers, and ranked according to their severity. The most critical barriers with respect to each category are: high cost of reverse logistics adoption (finance and economics), lack of skilled professionals (knowledge and experience), lack of government supportive policies (law and regulation), poor organizational culture (management), lack of human resources (infrastructure and technology), lack of environmental law awareness (environment), lack of community pressure (market) and company policies (reverse logistics in policy). Overall, the top five barriers found in this study include lack of initial capital, lack of skilled professional in RL, companies’ policies against RL, lack of new technologies and information systems, and lack of community pressure. Knowledge about barriers to reverse logistics allows manufacturing companies to prepare a priority list of actions for better implementation of the reverse logistics system.

Highlights

With the rapid increase in population across the globe and booming technology development, the production and consumption of products that have short lifecycles have increased
The findings of Exploratory Factor Analysis (EFA) show that the eigenvalues of all eight factors are greater than 1, following the criteria recommended by Kaiser [134], with 73.64% total variance
Societal pressure, scarcity of resources, competitive situations, and customer awareness has helped increase the significance of reverse logistics worldwide

Summary

Introduction

With the rapid increase in population across the globe and booming technology development, the production and consumption of products that have short lifecycles have increased. It has become necessary for companies to incorporate strategies that efficiently and effectively deal with sustainability issues in their supply chain management (SCM) activities [2]. Globalization policies have encouraged manufacturing companies to produce environmentally-friendly products by adopting reengineering and innovative technology. A company’s reaction toward the adoption of new technology is becoming its main driver. Product recovery and zero waste supply chains have caught the attention of manufacturers, professionals, and researchers over the last two decades [3,4,5,6,7,8]

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Conclusion