Reverse logistics in Czech companies: increasing interest in performance measurement

Abstract

PurposeThe purpose of this paper is to explore whether Czech companies believe that value is being generated by reverse logistics (RL), and whether (and how) they track its costs and benefits. The quality of performance measurement of RL was related to three corporate attributes. The findings were then compared to the results of an older study to describe developments over the past five years, and to evaluate the changes during this time period.Design/methodology/approachThis exploratory research is based on data from 102 Czech companies collected in 2009. The basic statistical tests were applied in the analysis. A part of the paper takes the form of longitudinal research.FindingsOne third of Czech companies surveyed reported that RL had a positive influence on their profits. A positive relationship between the profitability of RL activities and a company's strategic focus on RL was also identified. The level of interest by companies in performance measurement has increased; however, the companies tend to focus on the efficiency of RL while the effectiveness is neglected.Research limitations/implicationsManagers must acknowledge the issue of proper measurement of RL performance, and involve RL in the planning process if they want to improve it. They should focus more on effectiveness, not just on efficiency. The analyzed data express the opinions of executive management, and were not accompanied by financial or production data.Originality/valueThe survey first maps the status of RL performance measurement in the Czech Republic. It finds a relationship between profitability of RL and corporate planning, and it points out that companies focus mainly on RL efficiency, and fail to consider effectiveness in their performance measurement.