Performance measurement of reverse logistics enterprise: a comprehensive and integrated approach

Abstract

PurposeReverse logistics (RL) has gained considerable attention in the literature. The first objective of this study is to develop a comprehensive performance measurement (PM) framework and scorecard for RL enterprise. The second objective is to integrate analytical hierarchy process (AHP) approach for RL PM.Design/methodology/approachThe present work presents understanding RL performance and proposes a conceptual comprehensive reverse logistics PM framework and scorecard for managing RL enterprise. The framework developed in the paper is based on an extensive review of literature on RL, PM frameworks such as Balanced Scorecard and performance prism. It is further supported by AHP for calculation of overall comprehensive performance index (OCPI).FindingsThe scorecard consists of six performance perspectives, as well as key performance measures. The relevance of these perspectives, especially from the reverse logistics viewpoint, has been authenticated. With respect to each perspective, measures have been proposed that efficiently and effectively address the vital facets of an enterprise's business excellence. The paper further proposes a method to prioritize the different performance levels using AHP methodology. It also suggests an OCPI of the enterprise reflecting its relative position and benchmark in the industry sector.Practical implicationsThis study provides a comprehensive PM system and scorecard for measuring and managing RL performance. The integrated AHP methodology developed provides useful guidance for practical managers in evaluation and measuring of RL in a complete and holistic way.Originality/valueThis paper proposes a comprehensive PM system and scorecard for RL. While suggesting scorecard, different performance measures have been assigned into six different perspectives. The OCPI has been calculated and prioritized performance measures are determined to focus on for continuous improvement.