Drivers and barriers of reverse logistics practices : a study of large grocery retailers in South Africa

Abstract

BACKGROUND : Reverse logistics (RL) practices have previously been viewed as a cost drain, but have received greater attention from practitioners because of increasing competition and dwindling margins. PURPOSE : The purpose of this generic qualitative study was to uncover the main internal and external drivers and barriers of RL within major South African grocery retailers. METHOD : Eleven face-to-face, semi-structured interviews and one telephonic interview were conducted with participants from four large grocery retailers. FINDINGS : Optimising profitability and cost reduction goals are the identified internal drivers, whereas the main external driver was to reduce the organisations’ environmental impact. A lack of information systems – such as enterprise resource planning systems or warehouse management system software – and infrastructure were revealed as the main internal barriers for organisations’ RL practices, whereas supplier non-compliance and transportation inefficiencies were the main external barriers exposed. MANAGERIAL IMPLICATIONS : In order to optimise the efficiency of the reverse flow, managers are recommended to devote more capital to RL infrastructure, develop policies to manage supplier behaviour, focus on RL as a revenue generating stream as well as implement information systems to manage the entire reverse flow. CONCLUSION : All participating grocery retailers follow similar RL processes. Growth in RL practices as well as infrastructure to perform those practices is a future priority for all the reviewed grocery retailers. RL is no longer only a key cost driver, but also provides organisations with many additional opportunities.