Abstract
The objective of this research was to show the relationship between reverse logistics and sustainability by analyzing the following case studies. These cases are analyzed to understand the relationship between reverse logistics and sustainability. The study analyzed two cases of reverse logistics in the European Union and China as a base for a better understanding of the relationship between reverse logistics and sustainable development. This study found that reverse logistics and supply chain management can help firms improve their competitiveness, leading to sustainable development. It can be accomplished by establishing a quality control system and certifications that give companies clear guidelines on meeting efficiency requirements. For instance, the future of automobiles lies at the intersection of advanced electronic technologies, materials, and designs. These three elements are necessary for successful automotive applications in the future automobile design and manufacturing industry. The study concluded that reverse logistics and sustainability increase productivity and enhance safety, emphasizing high levels of customer service.
Keywords: Reverse Logistics, Sustainability, Supply Chain Management, Corporate Productivity.
Introduction
Reverse logistics is managing and coordinating activities related to the reuse, refurbishing, recycling, and proper disposal of products returned from customers after purchase to extend the product life cycle, reduce waste and avoid disposal costs. Furthermore, reverse Logistics refers to the re-packaging process of products and services from primary production (manufacturer) to final delivery (consumer). The re-packaging process sometimes involves multiple steps such as distribution, repackaging, transportation, re-engineering for the manufacture, or another handling. On the other hand, sustainability is an ongoing course of action and interaction with the environment to benefit future generations. In context, sustainability refers to the ability or capacity to maintain or restore its physical, social, economic, and technological integrity healthily. The research question is: how can reverse logistics and supply chain management ensure sustainability? The central purpose of this study is to determine the relationship between reverse logistics and the concept of sustainable development. More precisely, the study aims to show how reverse logistics can be used for sustainable development and assess if it contributes equally towards achieving operational, technological, and environmental goals of sustainable development.
Reverse logistics has been widely used in several industries and has been shown to offer a significant opportunity for companies in many industries to improve their competitiveness and sustainability. For instance, reverse Logistics is quite different from regular logistics operations. Its main focus is on retrieving products from customers instead of delivering them, as in the case of regular logistics operations. It is because reverse logistics encompasses a series of terms that seem to be contradictory and have negative connotations, such as “recovery” and “take back” (Ciliberto et al., 2021). However, it has been widely acknowledged that reverse logistics, when executed in conjunction with supply chain management, can lead to optimal business performance in companies. Sustainable development is achieved by establishing a quality control system and certifications that give companies clear guidelines on meeting efficiency requirements (Ciliberto et al., 2021). Hence, reverse logistics and sustainability increase productivity and enhance safety with an emphasis on maintaining high levels of customer service.
The Relationship between Reverse Logistics and Sustainability
Sustainable development can be achieved by enhancing the efficiency of the supply chain from raw materials to a final product. According to Kazemi, Modak, and Govindan (2019), keeping ecology and the environment in mind and providing a high-quality product to customers is one way of ensuring sustainability. It is because of this that sustainability and reverse logistics are interdependent. Reverse logistics and sustainability can increase productivity while enhancing efficiency, giving organizations more opportunities to provide customers with quality services. The relationship between reverse logistics and sustainability is also beneficial since it helps companies improve their competitiveness which will, in turn, lead to sustainability. Therefore, a sustainable environment is achieved by reversing the materials to their original state and reusing them to produce a high-quality product. Therefore, a sustainable environment is achieved by reversing the materials to their original state and reusing them to produce a high-quality product.
Meeting market demands by establishing effective supply chain management controls and maintaining high levels of customer service for customers can also help a company improve its competitiveness. Providing sustainable goods that are more environmentally friendly to customers also helps improve a company’s competitiveness, leading to sustainability (Kazemi, Modak & Govindan, 2019). For example, in China, sales of electric cars increased considerably between 2009 and 2016. This sales increase has led to a better environment since the cars do not use gasoline or diesel oil. In this case, the sales of electric cars have helped create sustainable market demand, leading to the business’s sustainability. Thus, through reverse logic, companies can take note of and improve their competitiveness by addressing these sustainability issues.
In addition, reverse logistics and sustainability increase productivity and enhance safety with an emphasis on maintaining high levels of customer service. Reverse logistics programs coupled with motivated and professional employees can help companies improve their profitability (Schumacher & Agbemabiese, 2021). It can be accomplished by establishing a quality control system and certifications that give companies clear guidelines on meeting efficiency requirements (Schumacher & Agbemabiese, 2021). For instance, the Environmental Protection Agency (EPA) has established some basic operational requirements for proper waste management in the US. It includes electronic waste, also called e-waste. Many challenges face traditional manufacturers that wish to achieve sustainability. Sustainable manufacturing requires holistic systems. It should integrate sustainability into manufacturing processes; inventory management processes; supply chain management processes, and service processes (Schumacher & Agbemabiese, 2021). Therefore, companies can improve productivity and the environment by implementing these safety measures and certifications.
In addition, e-waste is used to scrap electronic products, including computers and TVs. Currently, most e-waste ends up in landfills or incinerators in developing countries. Improper disposal of hazardous chemicals from used electronics releases toxic substances into the air and water, causing air and water pollution and endangering lives. Schumacher and Agbemabiese (2021) argued that different EU governments should encourage the recycling of used electronic products by creating a system that will help businesses to recycle safely, efficiently, and with little cost. Thus, through reverse logic and sustainability, the companies can meet the consumer’s demand for environmentally friendly products and improve the safety of their environment.
Another relationship is that reverse logistics can significantly benefit companies due to cost savings. It can be achieved by reducing packaging waste; that is, products are not disposed of as waste after use, enabling sustainable development (Hult, Frayer& Closs, 2014). The more a company reduces the waste it creates, the less it needs to spend on disposal. It is one aspect of sustainability development by making an effort to reduce product waste that is beneficial for both companies and the environment. For instance, all electronic devices contain materials that can be recovered, refurbished, and reused as raw materials. According to Hult, Frayer, and Closs (2014), microelectronics recyclers can play a part in the recovery of metals such as gold, copper, and platinum and reuse such elements as gold as well as other precious metals. Therefore, firms can stay relevant in the technology industry through reverse logic and sustainability.
Reverse logistics involves an effective business model enabling the reuse and recycling of materials from used products. A company must have an effective reverse logistics plan to compete effectively with other firms. Firms need to look at the impact of reverse logistics on sustainability development by reducing waste, which will lead to a win-win situation for both parties (Hult, Frayer& Closs, 2014). Companies must put forward energy and water-efficient plans to reduce waste. For instance, reverse logistics is developing a system known as “cradle-to-cradle”, which produces zero waste from raw materials to distribution centers. It will lead to improved environmental standards and low demand for raw materials, which will, in turn, improve sustainability since fewer resources are needed for manufacturing new products. Thus, reverse logistics and sustainability significantly benefit companies and the environment.
Another relationship is that reverse logistics enhances the organization’s productivity and efficiency levels, enabling sustainability development. Firms can improve their productivity and efficiency by recovering their product for reuse or recycling without affecting their core business operations or committing large sums of money (Magrini et al., 2021). With an increase in the re-usability of products, companies will be able to improve their productivity, leading to sustainable development. An example of a case study is the early Volkswagen experience in China. The VW experience in China was that the company’s efforts to reverse its European model of automobile manufacturing in China failed because it was not sustainable. Magrini et al. (2021)also showed that companies could integrate sustainability into their supply chains by applying effective reverse logistics. Thus, reverse logistics does not require large capital expenditure or a fundamental production process change.
It can be done by dealing with the products that have no practical use in product life cycles by turning them into resources for other products through recycling or re-manufacturing. To deal with this, companies must take a proactive approach to understand how they could manage their waste and develop their supply chain efficiently based on that information (Magrini et al., 2021). Reverse Logistics is an important concept in sustainable development, given that it implies that the end of consumption should be made from the beginning. Thus, sustainable development depends on the vitality of complex and holistic systems composed of various factors such as economics, corporate social responsibility, environment conservation, and law, among others.
Firms should reverse their supply chain management to integrate sustainability with their product design processes. It can be accomplished by establishing a quality control system and certifications that give customers clear guidelines on how suppliers should meet their requirements, especially safety requirements. It is because reverse logistics and supply chain management are directly related to the firm’s competitiveness, growth, and sustainability (Garzón-Agudelo, Palacios-Alvarado & Medina-Delgado, 2021). Hence, there are physical conditions that a company should meet to implement reverse logic.
In addition to the point above, to successfully implement reverse logistics, a company should adhere to the requirements of ISO 14001 and ISO 9001. For this reason, reverse logistics should be integrated into the supply chain management to enable a company to attain sustainability (Garzón-Agudelo, Palacios-Alvarado, and Medina-Delgado, 2021). For example, China’s supply chain management system can be extended to include reverse logistics to achieve sustainability. Environmental issues have increased to such an extent that the government has realized that reverse logistics and supply chain management directly correlate with environmental sustainability. As a result, to reduce its carbon footprint and improve the quality of its natural resources, China’s government has set a goal to become carbon neutral by 2050 (Garzón-Agudelo, Palacios-Alvarado & Medina-Delgado, 2021). A quality control and certifications system is imperative to effectively implement “reverse logistics” in China’s supply chain management system. Therefore, reverse logistics coupled with supply chain management can help firms improve their relationship with the environment.
To implement reverse logic, companies should understand the overview of supply chain management. Rubio and Jiménez-Parra (2014) asserted that supply chain management effectively reduces the overall carbon footprints and creates sustainable development. Reverse logistics and sustainable development are interrelated and play a vital role in maintaining a competitive market. For instance, supply chain management is an effective and efficient way to maintain the economy. The main objective of supply chain management is to optimize end-to-end value by reducing costs, achieving maximum efficiencies, and improving customer service (Rubio & Jiménez-Parra, 2014). Reverse logistics coupled with supply chain management are highly correlated to sustainability because it is a prerequisite for sustainable development; without these two, companies cannot cut down their carbon footprint. Therefore, the relationship between reverse logistics and sustainability is that they both improve business operations while creating a more sustainable world.
Reverse logistics can be used as a tool that facilitates a shift in focus from environmental issues like air pollution and greenhouse gases to matters related to the competitiveness of companies (Rubio & Jiménez-Parra, 2014). As the major reaction of reverse logistics, the focus of sustainability must be shifted from environmental issues like pollution to matters related to the competitiveness of companies. Companies should identify the areas of their businesses where they can contribute to sustainability and implement the right strategies. Therefore, in order to achieve sustainable development, a supply chain management system is essential.
Challenges to be Considered Before Implementing Reverse Logic
In addition, several challenges should be considered before implementing reverse logic to enable sustainability. Rubio and Jiménez-Parra (2014) listed that the challenges, such as reverse logistics, are not about closing the loops and building recycling businesses. Rather, it is about increasing the competitiveness of businesses by reducing costs and improving customer service. Another challenge is that reverse logistics does not always contribute to sustainability. Through reverse logistics, firms can ensure that raw materials from all over can be recycled and not disposed of. For example, in the US, the transportation sector is a big consumer of energy and an even bigger source of greenhouse gas emissions. The reverse logistics system in the US can help create jobs, reduce fuel consumption and bring down shipping costs. In addition, reverse logistics will help the environment since fewer resources are needed to manufacture new products. Therefore, through supply chain management, companies can stand on the cusp of a new era in which reverse logistics is central to sustainability.
There is a need for industry-wide regulations on reverse logistics in order for it to affect sustainability. It is because the industry is fragmented, and there are no uniform regulations (Dev, Shankar & Qaiser, 2020). Therefore it takes work to retain on a global scale. Standards have been established, but they are not binding. According to Dev, Shankar, and Qaiser (2020), these standards include extended producer responsibility, which applies to all product producers. Another standard is extended life cycle management which applies to the whole product life cycle and not just the end-of-life period. Lastly, extended supply chain management recycles multiple products or materials containing components that are easily separated or recycled.
Through these standards, the reverse logic will enable sustainability in supply chain management when companies focus on sustainable manufacturing and waste management. It enables companies to search for better environmental conditions, lessen the use of non-renewable resources and improve human welfare. Recycling, reusing materials and reducing waste impact the environment. There is a need for these standards to apply to all companies and not only large firms (Dev, Shankar & Qaiser, 2020). It would enable the supply chains of smaller companies to be more sustainable as there would be higher price incentives for them to follow these guidelines and therefore increase their sustainability. There is also a need for a global standard on reverse logistics that applies across all countries because each country has its laws (Dev, Shankar & Qaiser, 2020). Therefore, implementing reverse logistics by companies will help suppliers and customers understand how this affects them, thus leading toward sustainability.
Conclusion
In conclusion, in the European Union, reverse logistics has already been implemented significantly; it is considered one of the most important trends in the last decade. This legislation aimed at simplifying legislation related to product liability and extending this liability when goods are damaged while they are in transit and stored in fulfillment centres. In China, reverse logistics has only recently been implemented; it is still in its early stages due to its extensive reformations. Nevertheless, this concept will continue to be one of the major trends in the next decade. The relationship between reverse logistics and sustainability includes establishing a quality control and certifications system and increasing product availability for local consumption for a greater market share. Another relationship is supply chain management systems that have efficiency at their core, collaboration with suppliers or customers, and increasing manufacturing competitiveness in export. Some challenges should be considered before a company implements reverse logic to enable sustainability. They include a lack of qualified labor to perform quality control and certifications and lack of product liability laws, and high expenses to place the product in processing and storage facilities. These challenges will continue to persist until a well-established system is implemented. Thus, these challenges will prevail until the government establishes regulations that are easier for companies to follow and are more cost-effective.
References
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