Closing the Loop : Reverse supply chain management andproduct return processes in electronics retailing

Abstract Problem There is a gap in the knowledge concerning reverse product flows due to a lack of research and empirical data in the field of reverse supply chain management in general. Furthermore, more research is needed to investigate the factors influencing the decision making process regarding the right reverse supply chain recovery option choice for companies in order to close the supply chain loop. Processing product returns has become a critical activity for organisations as the volume of goods flowing back through the supply chain rapidly increases, and the electronics retail industry is not an exception and it could even be considered as the starting point of the reverse supply chain which eventually through recovery options closes the loop for the industry. Purpose The purpose of this thesis is to investigate how product returns are handled in electronics retailing in Sweden, what role retailers of electronics play in closing the loop, and which product recovery options are used. This thesis is developed in order to gain more empirical data about how returned products can be managed in the reverse supply chain. Furthermore, returned product recovery options and factors influencing their choice will be examined as well. Methodology To achieve the purpose of this thesis the qualitative research approach has been chosen and the multiple-case study research strategy applied to collect data through in-depth semi-structured interviews with some of the electronics retailers operating in Sweden. For further in-depth information regarding the recovery options and processes, interviews with recycling centre and workshop have been also conducted. Conclusions The five reverse supply chain processes are applied in practice in the researched electronics retailing in Sweden. From the retailers’ perspective, the main factors influencing the handling of the returned product flows are legislation and corporate citizenship. The retailers have a limited role and significance in the decision-making processes in the reverse supply chain and ultimately in efficiently closing the loop and recovering as much value as possible from the returned products. The retailers outsource their recovery activities and the main criteria for selecting the appropriate recovery option is price. Discussion and future research Managerial implications - The other reverse supply chain managers working in other industries with time-sensitive products could implement the utilisation of the decentralised reverse supply chain design, outsourcing of transportation and recovery activities, and the use of information technology. Research evaluation - The authors encountered the limitations that there is little or no research done in the reverse supply chain from the retailers’ perspective but mainly from the OEMs’. Another limitation of this research could be the limited number of investigated electronics retailers (participants). Furthermore, the research lacks measurements as in this thesis the qualitative data has been used for undertaking the empirical study. Future research – The development of a measurement system for returned product value, the involvement of other members of the reverse supply chain in order to get a full picture of how to close the loop, and the development of a standardised criteria to determine the best recovery option, would be interesting research areas