According to J. Szołtysek, reverse logistics is “the totality of processes for managing the flows of waste (including damaged products) and information (related to these flows), from the places of their origin (appearance) to the place of their destination for the purpose of value recovery (through repair, recycling, or processing) or proper disposal in such a way that these flows are economically efficient and minimize the negative impact of waste on the human natural environment” [Szołtysek, 2009].
In other words, a key competence of reverse logistics is recycling, and the reason for undertaking this activity is the protection of the environment and natural resources. Reverse logistics focuses on several fundamental areas, including: the structure of the reverse logistics network, the interdependence of many logistics activities such as transport, storage, product life cycle, or the management of information systems in reverse logistics, as well as legal regulations protecting the natural environment. As M. E. Porter points out, properly designed environmental protection standards can stimulate innovation among companies, which become more competitive. The way in which enterprises respond to environmental problems can be a factor in their competitiveness [Porter, van der Linde 2008]. According to various authors dealing with reverse logistics, there are many factors motivating all organizations and enterprises to focus on producing environmentally friendly products and technologies [Wang 2008]. Increasing consumer awareness regarding the importance of environmental protection further stimulates companies to improve production technologies and product design in order to increase customer satisfaction. These motivating factors can be: intensifying competition, ISO 14001 standards, legal acts, or the company’s image. The American retail chain Wal-Mart is the most frequently cited example of a company boycotted for not selling products subject to utilization or biodegradation.
A good example of using motivating factors to manage reverse logistics is the company Johnson&Johnson (J&J). In 1982, the McNeil laboratory, which collaborated with J&J, detected potassium cyanide injected into their flagship product, Tylenol. The company offered $100,000 for the capture of the perpetrator. Unfortunately, the Police and the FBI never solved this case. As a result, 7 people died. A life-threatening situation also occurred a few years later. However, the second time, J&J was perfectly prepared because it had a detailed reverse logistics plan in case of a terrorist threat, and in a very short time, all poisoned medicines were withdrawn from distribution channels, only to record a renewed increase in sales after just three days of the crisis situation. Also, the information system, pumped into all media, contributed to the public’s perception of the company as very honest.
Undoubtedly, an important element of an enterprise dealing with reverse logistics is a well-formulated strategy. “The essence of strategy formulation is how to deal with competition [Porter, 2001]. It is important that companies perceive all activities (production, reverse logistics, product life cycle, etc.) as a whole activity influencing competitiveness”.
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Source: Logistyka Magazine 2/2013