ADAPTABILITY TO REVERSE LOGISTICS - AN EMPIRICAL STUDY IN EUROPEAN ELECTRONICS INDUSTRY

Abstract

Reverse Logistics was previously not an important driver of supply chain in European electronics industry to create differentiation and cost reduction, suggesting that it might not be managed strategically. However, because of transformed market with the enforcements of laws, the scarcity of resources, and the more powerful customers, many companies have adjusted their existing supply chain to adapt to reverse logistics, which resolves the issues related to reverse flows for complying with the law, satisfying customers, and recapturing value. Reverse logistics has today become a competitive necessity and has gained increased acceptance of profitable business strategy. This study uses structural equation modeling technique with Partial Least Squares to examine how firms adapt to reverse logistics and its influences on reverse logistics performance. Empirical results relying on responses from 102 firms in European electronics industry indicate that there has been increasing adaptability to reverse logistics through resource commitments, strategy formulation, liberalized returns policy, capabilities and performance of reverse logistics. Testing indirect effects of resource commitments on performance of reverse logistics through multiple mediator models suggests that formulating a proper strategy of reverse logistics is currently the most important adaptability influencing performance of reverse logistics.