Explain the relationship between resource commitment to strategy activation?

Answer 1

Reverse logistics is fast becoming a competitive necessity. More liberal returns policies, the increasing use of consignment inventory, shorter product lifecycles, and more demanding customers translate to more returned product.1 Firms are being forced to find more efficient ways to reclaim, redistribute, and/or dispose of returns. Firms that do not recognize the importance of an effective reverse logistics program risk damaging customer relations and may seriously harm the organization's reputation and brand image.2

The trend toward more direct-to-consumer marketing and retailing also impacts reverse logistics, as does the exponential surge in internet retailing. Non-traditional retailing is typically subject to higher rates of returned merchandise than in-store shopping. For example, it is estimated that returns for direct sales catalog companies can run as high as 20% of sales.3 The necessity of dealing with such volumes of returned product has led catalog retailers to focus efforts at more efficient returns handling. Rogers and Tibben-Lembke4 suggest that some catalog retailers are at the forefront of best practice reverse logistics. Because of their history of dealing with returns and their purported expertise in reverse logistics, catalog retailers were selected as the focus for the current research project.

Reverse logistics programs are resource intensive in terms of implementation and maintenance. Significant time and resources must be committed. However, there is little empirical work examining the relationship between allocating resources to reverse logistics and reverse logistics program performance. Reluctance to devote managerial and financial resources is a barrier to the development of effective reverse logistics programs.5 Is there a payoff in terms of financial and/or service performance for firms that devote more resources to reverse logistics? The current research was undertaken to assess the effectiveness of reverse logistics programs and to gauge their impact on business operations. The research focused more on value reclamation aspects of reverse logistics (reclaiming unsold or damaged product, for example) rather than recycling or environmental issues.

Reverse Logistics Programs

Reverse logistics refers to:

The process of planning, implementing and controlling the efficient, costeffective flow of raw materials, in-process inventory, finished goods and related information from point of consumption to the point of origin for the purpose of recapturing value or for proper disposal.6

Reverse logistics has received more attention in recent years because of its strategic implications. A well managed reverse logistics program can result in savings in inventory carrying, transportation, and waste disposal costs7 as well as improving customer service.8 Environmental and "corporate citizenship" goals also have influenced program development.9 For example, stringent governmental legislation on disposal of products,10 public awareness of the social cost of excess waste,11 and growing support for recycling12 have all contributed to expand firms' involvement in reverse logistics.

Suhail Ahmed...