Performance measurement for reverse and closed-loop supply chains

Supply chains today continue to have shorter life-cycle products as a result of high rates of innovation. The increasing number of electronic retailing and catalogue sales fulfil the requirement of home shopping. More liberal return policies have been introduced to protect customers' buying rights and at the same time generate more sales. A growing number of environmental regulations are created which involve a wide range of products. All of these circumstances contribute to the reverse flow of products which require manufacturing organisations to strategically manage and deal with the return flows. Reverse supply chains or reverse logistics have attracted the attention of many academics and practitioners and one of the important field studies in this area is of Supply Chain Management. To contribute to the field, this research is purposely carried out to study the performance measurement in reverse supply chains. Reverse logistics networks may be classified into several categories depending on the source of the reverse flow. This research will focus on customer and distribution return flows. The research is significant because there is a gap in the literature and it could help to give companies guidance in managing their reverse supply chains better. Case studies on five companies which include manufacturers and retailers in the UK provide empirical evidence for their practice of performance measurement in reverse supply chains. The research investigates the selection of strategic objectives for reverse supply chains and the impact of product returns' characteristics and the choice of product returns disposition channels. Learning from the performance measurement in a reverse supply chain, the research proposes a three-level performance measurement framework model for reverse and closed-loop supply chains. This framework model provides the decision makers with a formal and systematic approach to select strategic objectives and towards the use of meaningful performance attributes and performance metrics. Subsequently, it offers a practical approach to the decision maker to perform and manage the reverse supply chain more effectively.

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