Main Points
The article posits that in the face of the rapidly increasing volume of goods flowing back through the supply chain, processing product returns has emerged as an essential activity for organizations. Statistically, there have been reports by analysts that the value of returned goods or products exceeds an estimated a hundred billion dollars annually and averages approximately 6% of sales. Thus, product returns have been estimated to range between 15% to 35% for mass merchandisers and e-commerce retailers, respectively. Although product returns are part of reverse logistics, manufacturers are only able to recover a small proportion of the returned products due to processing delays. From their study, Stock and Mulki deduce that retailers refuse a larger percentage of returns compared to wholesalers and manufacturers because they are closer to the point of sale and thus need to protect sales. On this accord, the authors postulate that good product returns processing potentially results in the revamping of profitability through cost reductions and higher product recovery rates. This could as well mean increased customer service levels as returned products are credited to clients sooner and more accurately.
Positives
Other than providing a quintessential and thought-provoking background regarding product returns through a meticulous literature review, the research provides several hypotheses to be tested to cover the dynamic nature of the topic at hand. Furthermore, the article employs infographics to illustrate the findings from the descriptive analysis. Moreover, the article not only proffers but also analyses the product returns process, thereby divulging the advantages of the same as well as its implications. Given the dynamic and multifaceted nature of the topic, the article as well proffers a basis and direction for future research. Specifically, the authors direct that future research needs to focus on establishing specific criteria that could be used to evaluate existing product returns metrics and thereby categorize existing metrics from a process rather than a functional perspective. Further, all the collected data from the interviews was tested for bias to ensure eligibility and credibility of the study. Also, the article gives credit to other sources whose information contributed to the literature of the research as well as analysis of the data.
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Negatives
One profound negative of the article is the fact that it does not proffer the limitations of the study on which future research should be based on or should strive to improve. Moreover, the methodology section of the article does not specify the research or study design but is later highlighted in the findings section, which is confusing in terms of organization. Further, even though the specified design in the findings section is descriptive statistical analysis, the data presented is empirical, yet the collected data through interview questionnaires was descriptive. On this accord, the research goes on to conduct a quantitative analysis of the data, further presenting the results and findings in quantitative tables. Consequently, the design approach is confusing since one cannot clearly distinguish whether the design is quantitative, qualitative, or mixed-methods research. Ultimately, the conclusions and summary provided do not answer the research question or all the hypotheses tested.
Take Away
The key upshot from the article is that despite the increasing importance of reverse logistics and product returns processing in the business environment; the two concepts are yet to receive full recognition and widespread fundamentality within organizations. Yet, as Elmas & Erdogmus (2011) ascertain, reverse logistics provide a competitive advantage as well as proffer customer satisfaction, and as such, organizations that specialize or incorporate product returns and reverse logistics have witnessed an increase in demand for their services and products. Other than the benefits mentioned above, reverse logistics has the potential of positively impacting an organization’s strategic performance as well as increase its market effectiveness through cost-effectiveness. An additional take away is that, as integral elements of business operations and supply chain, there is need to ensure efficiency and effectiveness of reverse logistics and products returns process to remain competitive and meet customer demands.
References
Elmas, G., & Erdoğmuş, F. (2011). The importance of reverse logistics. International Journal of business and management studies , 3 (1), 161-171. Retrieved from https://dergipark.org.tr/download/article-file/255912
Stock, J. R., & Mulki, J. P. (2009). Product returns processing: an examination of practices of manufacturers, wholesalers/distributors, and retailers. Journal of business logistics , 30 (1), 33-62.
