Evaluating reverse logistics programs: a suggested process formalization

Abstract

PurposeSuppliers, manufacturers, wholesalers, and retailers alike are still considering reverse logistics (RL) to be the “necessary evil” in their day‐to‐day operations rather than an opportunity for future performance. At the same time, a well‐structured RL program can create a substantial value‐added and positively affect the bottom‐line. Based on in‐depth investigation of best‐in‐class RL programs implemented in practice, the purpose of this paper is to offer a grounded flow charting approach for assessing the state of program development and, potentially, identifying areas for improvement across different companies in various industries.Design/methodology/approachThe current study utilizes rich qualitative research methodology based on the combination between a thorough review of existing literature and multiple field studies. The findings from existing research, semi‐structured interviews and observation at companies’ sites, and RL‐related documentation at those companies, provide the backbone for the development of the assessment tool.FindingsAlthough substantial variations exist in the way companies are setting up their RL programs, some common processes prevail. Formalizing these processes and related activities becomes the differentiating factor in RL program development and implementation. In addition, providing structure to the RL effort helps companies to strategically control the related value‐added.Originality/valueThe paper introduces process formalization as a necessary condition for the development and implementation of RL programs. The grounded flow charting approach, based on a qualitative inquiry in real business situations, aims to bridge the gap between theoretical developments and practical guidance for best‐in‐class RL operations.