Designing reverse logistics network in an omni-channel environment in Asia

• Main Authors: Alvin Ang, Albert Tan
• Format: Article
• Language: English
• Published: Poznań School of Logistics 2018-12-01
• Series: LogForum
• Subjects: Omni-channel; Reverse Logistics; Supply chain management; Retail industry; e-commerce
• Online Access: http://www.logforum.net/vol14/issue4/no7/14_4_7_18.pdf

Background: Omni-channel retailers have been growing globally to connect with customers anywhere and thus blurring the line between online web store and the physical store to deliver a seamless customer experience. The complexities of reverse logistics in Omni-channel firms due to multiple product return options would require these firms to integrate their reverse logistics network in order to reduce the complexities. This forms the basis of this research and two Omni-channel companies’ in Asia are examined in this research. A four-staged framework for the reverse logistics management is being proposed and further developed through these real-life case studies. Methods: We conduct interviews with the staffs from two Omni-channel retailers with operations in Asia to verify their return policies and collect additional information from their websites and customers. We focused on reverse logistics, network design, Omni-channel and the interface between them. We identify a few key factors that influence decision in network design. From there, we propose a conceptual framework and applying it to the Omni-channel retailers to determine, if it is suitable and beneficial to the Omni-channel environment. Results: From the two company findings, it was understood from both of the cases that speed and efficiency is not only essential from the operations point of view, but also the total customer experience from the Omni-channel engagement. Another observation is that a company that makes their own products tend to centralize their reverse logistics operations for economics of scale, while those that rely on suppliers tend to decentralize their reverse logistics operations to leverage on their supplier’s distribution network so as to keep costs low. Conclusions: In this research, we have illustrated how our conceptual framework can be used in Omni-channel companies and how it could help companies design a more responsive and efficient reverse logistics network.