Reverse Logistics, Technology, and the Impact It Has on Customer Satisfaction - Paper Example

7 pages
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Boston College
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Literature review
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Currently, the economy is becoming globalized and fast paced as well. Stiff competition in various sectors is also driving organizations and thus there is a need to address the significance and even effect of reverse logistics and technology on the satisfaction of consumers. Reverse logistics in this aspect can be denoted as a factor of operations that can also result in benefits to business units or make them less competitive and viable in the market of operation. The benefits of reverse logistics have become quite evident such that firms have developed their own reverse logistics program in-house Reverse logistics is also being viewed as a fast developing principal driver of competitive advantage and even financial performance among the leading manufacturer. Firms further partake in reverse logistics as a source of profit and due to laws and regulations tied to the environment which they have to observe (Hesselbach, & Herrmann, 2011). Apart from obtaining profits, adhering to the laws and regulations of the environment also ensure that an organization continues operating. It further improves their overall image in the market. The literature review will focus on the element of reverse logistics and technology and its effect on customer satisfaction.

Background of Study

The process of reverse logistics in a company mainly comprises of two elements. These are returning a product and returning packaging to where it came from or was manufactured. It has been pointed out that products are either reverted to the manufacturing or distribution point to deal with the termination of life of the merchandise for activities such as recycling, refurbishment, and disposal. The reverse logistics is nearly always a part of the close-loop system as well. In this category, the packaging or product flows outbound to a client, and the same type of asset also flows in the reverse channel. In most cases, it is in an amended situation or form (Dekker, 2010).

Organizations also have to recognize that the reverse channel is an objective for advancement in effectiveness regarding decline of costs. Companies have begun to concentrate on the element of the reverse channel. As such, they have also started to concentrate on the reverse channel and operating it as a value added midpoint through the utilization of their reverse process as a differentiator (Agrawal, Singh, & Murtaza, 2015). The differentiation gives them an opportunity to either gain a share of the market, add revenue or even reduce the costs of inventory and transportation. The reverse process is undertaken through the constant monitoring and addition of effectiveness of their reverse logistics process (Govindan, Soleimani, & Kannan, 2015). It can further be purported that an increase in the focus on the process of reverse logistics has begun to move firms beyond the customer service with practices such as delivery of a product on time but with the maximum satisfaction of clients being observed. Besides, there is also the movement beyond the preliminary operation to ensuring that all the needs of the consumers have been catered for especially if there is need to return or exchange a product (Herrero, 2010).

The recovery of products can be pointed out as activities that have been strategized for value from a product at the end of its useful life to be reclaimed. Most companies are currently engaging in activities aimed at recovering products due to various aspects. One of these is environmental decline. There are also government regulations that have been enacted to ensure that organizations are undertaking the recovery of products. Besides, economic aspects, social responsibilities and the reduction of resources are other factors that have raised the need for firms to engage in activities entailing recovery of products. Four recovery approaches have been identified which are repair, recycling, reuse and remanufacturing (Hazen et al., 2014). The aspect of remanufacturing can be linked to reverse logistics. Products that undergo remanufacturing have been found to cost less than new ones by up to forty to sixty-five percent. Also, these products have also been approximated to be thirty to forty percent cheaper for consumers to purchase. In the oil industry, they also save up to 16 million barrels annually. It is thus evident that the remanufactured products benefit various sectors in the business world. In the oil industry, the practice saves a substantial amount of energy that may be applied to another area. It also ensures that customers can access cheap products and profits obtained are more than costs.

According to Ye, Zhao, Prahinski & Li (2013), the complexity of the entire remanufacturing process is connected to uncertainty in the quality, quantity and even timing of the returns. With these aspects, the process of the reverse network becomes quite difficult. It is thus necessary for an efficient acquisition and reverse distribution system to be present. In this way, returns will be readily traced, and gathering and transporting them to the remanufacturing plant will be undertaken smoothly as well. From this context, remanufacturing is a term that can be used in place of reverse logistics. The method utilized in forward logistics chain of new products is dissimilar from handling and packaging of returns. This has been attributed to great inconsistency in the physical condition and capacity of returns as well. Furthermore, the product variety is higher in reverse logistics as compared to forward. From this context, it is evident that the development of an efficient reverse logistics systems is a condition for the activity of remanufacturing. It is also one of the motivators for the provision of the economic benefits that are vital to initiate and even withstand a strong customer connection and reliability as well (Agrawal, Singh & Murtaza, 2015).

Reverse logistics has thus been pointed out as all undertakings that are connected with a service or even product after they have been sold. One of the primary goals of the activity is to make the operation of aftermarket more efficient and thus save funds and even resources of the environment. Organizations that partake in reverse logistics usually engage in it as a source of revenue. Besides, they also participate in the activity due to the laws and regulations on the environment that have been set and thus should be complied. Additionally, companies that engage in reverse logistics also have a wide impact on their competitors and other stakeholders as well (Nowak, Toyasaki, Wakolbinger & Ng, 2014). This may be attribute to their focus on improvement of goods and highly valuing their clients as well.

In other contexts, reverse logistics as a part of the supply chain process can be divided into several steps. The first phase entails acquiring the product. Transportation and storage or warehousing them follow after which the goods are inspected. Recovery is the next aspect, and finally, there is distribution and sales. The administration of reverse logistics also entails an element referred to as core acquisition management. It is an activity surrounding the products, which is their quality and quantity (Somuyiwa & Adebayo, 2014). For the entire process of reverse logistics to be efficient, it is also vital for certain aspects to be considered. These are such as selection of a facility design and planning of the production. There are also control and inventory policies which are major elements in this activity (Zanjirani, Rezapour, & Kardar, 2012).

Rogers, Melamed & Lembke (2012) identified the concept of reverse logistics as planning for the movement of goods from one place to another with little interruptions experienced. Logistics thus covers all the aspects of the business which is entirely different from the general knowledge. Its coverage of all the business aspects makes its operations to be more as compared to the movement of goods from different places. The product life cycle has been observed to be quite vital as a source of creating awareness on the changes that may be needed in the market and even logistics over the life of a product.

Reverse logistics has further extended to organizations that specialize in economic return and wastes production. In this case, its principal objective is not only to minimize cost. It is to bring products back and further create some form of value along the chain of supply. As such, reverse logistics has a substantial impact on individual firms that could also be depicted in the daily lives of consumers. In the business of e-retailer, reverse logistics has ensured that companies enjoy the loyalty and commitment of clients as well an improvement of relationship especially when the process is made efficient. Moreover, all these elements will be experienced when acceptable and suitable policies have been fully implemented (Govindan, Soleimani & Kannan, 2015).

According to Golinska (2014), the existence of return policies has further been associated with having the capacity of assisting in increasing the level of services that are provided by an e-retailer hence enabling them to enjoy the loyalty and commitment of clients. In reverse logistics, the volume of goods returned has the propensity of influencing the entire chain of supply which constitutes of various stakeholders. These are retailers, wholesalers, consumers, manufacturer, and suppliers. This is all in consideration of the financial value that the products have in the supply chain. When selecting the goods that have met the criteria for utilization in reverse logistics, it is vital for the e-retailer, in this case, to accept that the products have not lost a significant amount of recoverable value. Once a product has lost significant value, it may lead to an increase in operating cost if it is accepted as part of those for return. Therefore, an e-retailer should design return policies that support products which have recoverable value (Dyckhoff, Lackes & Reese, 2013).

Problem Statement

Most businesses located in various markets have not fully adopted the practice of reverse logistics. It is a relatively new concept that is yet to be fully accepted. On the other hand, the utilization of technology has been an area of interest for quite a long time and has been aimed at improving the level of satisfaction of consumers. The application of technology in reverse logistics is viewed as a fundamental aspect designed to addressing and even ensuring that customer satisfaction has been improved.

Companies should come up with practical ways to adopt the aspect of reverse logistics and application of technology in the production of goods and services before passing them to the consumers. Moreover, they should identify ways that can be used to fully implement the utilization of these aspects thus making their business activities or operations more efficient. It is, however, necessary to note that some firms have not recognized reverse logistics as a practice that results in the satisfaction of clients. This may as a result of little knowledge in the field hence making it difficult to...

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