Revenue in reverse? An examination of reverse supply chain enabled revenue streams

Exploring an adaptability approach: how creative return processors impact firm performance

Purpose

The authors explore complex adaptive systems (CAS) theory as an updated theoretical perspective for managing product returns that better matches the chaotic nature of recent consumer behaviors. CAS theory highlights the importance of agents who create and self-organize to help systems adapt in unpredictable environments.

Design/methodology/approach

This research utilizes data collected from return managers in an online survey and applies regression analyses to estimate the influence of the focal variables.

Findings

Empirical evidence of the firm flexibility–firm adaptability link is established, and return processor creativity positively relates to this link. The firm flexibility–firm adaptability link fully mediates the relationship between return processor creativity and returns management performance and partially mediates the relationship between return processor creativity and relationship quality. Nonmediated effects were observed for turnover and revenue size.

Practical implications

Managers of returns who embrace an adaptability approach become facilitators of returns by supporting processor creativity. Enhancing the autonomy of processors in their day-to-day work increases the knowledge-creation capabilities of the firm, which helps the firm move forward and adapt in an uncertain environment.

Originality/value

This research presents empirical evidence of the underlying mechanisms of CAS theory in the product returns context by studying processor agents and argues that CAS theory better fits the current dynamics of the product returns environment. Further, this paper extends work by Espinosa et al. (2019) and Nilsson (2019) by studying how a specific human characteristic – creativity – impacts product returns management.

How the reverse supply chain impacts the firm’s financial performance

Purpose

Although manufacturers have traditionally viewed reverse supply chain (RSC) activities as a costly nuisance, more recent research has found that the RSC can contribute to the firm’s financial performance. The purpose of this paper is to identify how the RSC can contribute to the firm’s financial performance and examine the exogenous contingency factors decisive for the contribution’s size. Because the exogenous factors are outside the control of the firm’s operations and supply chain management, the factors influence the RSC’s financial contribution irrespective of managerial policies and design decisions.

Design/methodology/approach

The paper applies a systematic literature review using the sequence of planning the review, searching and screening literature, extracting information from the selected literature, and synthesizing and analyzing findings. In total, 112 papers were included.

Findings

The study has identified 15 distinct opportunities for RSC-contribution to the firm’s financial performance. The study has identified 56 contingency factors. These are related to market segmentation, customer behavior, product design, and the firm’s distributor network. The study includes an interrelationship network between factors and the RSC’s contribution.

Practical implications

For managers, the paper shows how the RSC can increase the firm’s financial performance and which contingency factors determine whether operating a RSC will be financially viable if implemented.

Originality/value

While extant literature includes several reviews about RSC-related managerial policies and design decisions, this paper contains the very first collection of RSC-contribution opportunities available to manufacturers as well as the first review of exogenous contingency factors.

Combining or separating forward and reverse logistics

Purpose

While forward logistics handles and manages the flow of goods downstream in the supply chain from suppliers to customers, reverse logistics (RL) manages the flow of returned goods upstream. A firm can combine RL with forward logistics, keep the flows separated, or choose a position between the two extremes. The purpose of this paper is to identify the contextual factors that determine the most advantageous position, which the paper refers to as the most advantageous degree of combination.

Design/methodology/approach

The paper first develops a scale ranging from 0 percent combination to 100 percent combination (i.e. full separation). Second, using the contingency theory the paper identifies the contextual factors described in RL-literature that determine the most advantageous degree of combination. The set of factors is subsequently tested using a case study, which applies a triangulation approach that combines a qualitative and a quantitative method.

Findings

The results show six distinct contextual factors that determine the most advantageous degree of combination. Examples of factors are technical product complexity, product portfolio variation, and the loss of product value over time.

Practical implications

For practitioners the scale of possible positions and set of contextual factors constitute a decision-making framework. Using the framework practitioners can determine the most advantageous position of the scale for their firm.

Originality/value

Much RL-research addresses intra-RL issues while the relationship between forward and RL is under-researched. This paper contributes to RL theory by identifying the contextual factors that determine the most advantageous relationship between forward and RL, and proposes a novel decision-making framework for practitioners.