Understanding the reverse logistics operations of a retailer: a pilot study

The paper aims to illustrate the business process of reverse logistics by focusing on studying the business activities of the distribution center of a major department store.

The case study methodology is used to explore three questions: what are the essential characteristics and associated requirements underlying reverse logistics?, how should the practices underlying reverse logistics be adjusted to address cost minimization and value generation?, and what role does information sharing play in defining the reach, range and cohesiveness of central returns center (CRC) of supply chain members in reverse logistics?

The paper finds that the biggest problem a CRC is facing is the time required for managing damages when no return authorization is forthcoming from the vendor. The goal of the CRC is to maximize the amount of merchandise, which is shipped back to the vendor for full recovery. While information flow within the firm seems to be more than adequate, information flow to supply chain partners, especially where decisions need to be made, is not always adequate.

The paper provides the detailed description of the business process in reverse logistics practiced by a major retailer. The outcome of this study contributes to the understanding of what has been done in reverse logistics and what needs to be done in future.