How Is Reverse Logistics Important in the Food and Beverage Industry

Reverse Logistics

LOGISTICS

The implementation of sustainable rules and regulations as well as constraints in the markets across the world, have compelled international industries, in this case, the food and beverage industry, to establish reverse logistics, which is the backflow management of the supply chain system. Reverse logistics encompasses the waste management of products and merchandises in the backward supply chain. There has been a gap or limitation in research studies on the implementation of reverse logistics on the food and beverage industry. Due to the fact that food and beverage products are delicate in nature, the backward flow of packing and food supplies compel the formation of a free-flowing reverse logistics system throughout the supply chain. The development of an efficacious reverse supply chain practice for the food retail industry necessitates the conduction of studies on prevailing reverse procedures, and their enactment across the diverse retail set-ups.

Introduction

The food and beverage industry experiences plenty of difficulties and challenges with regard to the supply chain. This is largely because of the underlying fact that the industry trades easily perishable food products. Retailers, in this industry, across the globe, face a number of issues in waste management, the estimation of available stock, quality management and consistency in the supply of food (Vijayan et al., 2014). This implies that there is not just the necessity for quick and effective movement of the food and beverage products in the supply chain, but also the need for onward supply chain management, in addition to the establishment of a recessive flow management system for the products (Vijayan et al., 2014). The use of reverse logistics can offer great solutions to these issues. Reverse logistics encompasses the management of waste resulting from the products and merchandises in the backward supply chain. The purpose of this paper is to analyze and perceive the contemporary practices in the application of reverse logistics to the production sale, returns and resale and waste management operations within the food and beverage industry. It will encompass a literature review on the same, with reference to different studies that have analyzed the aspect of reverse logistics in different industries (Vijayan et al., 2014).

Literature Review

There is a limitation in the number of research studies, which are focused on the implementation of reverse logistics in the food and beverage industry. This may be deemed to be as a result of the intricacy in tracking and locating food and beverage products along the supply chain channels, as well as other elements. According to Rogers and Tibben-Lembke (1998), reverse logistics is commonly defined as the procedure and practice that involves the preparation and management of information and product in a backward manner, from the customer to the source of origin. This occurs with the main objective of disposal or recreating value (Rogers and Tibben-Lembke, 1998).

The common emphasis is placed on forward supply chain movement, at all times. Nonetheless, a number of particular factors, such as expiration of the products, recalls on the products, inaccuracies in orders, and also damage on products during transportation or delivery, result into the backward movement of the products (Kabir, 2013). This brings about the reliance of reverse logistics on goods and supplies. Product returns can be coarsely classified into returns from the consumers and those due to overstocking; and, products recalled and returns due to products being harmful to the environment. A number of general causes of returns include: poor quality of the products, overstocking of goods, and slow business operations. Other causes include: poor management of inventories and recurrent product promotions (Kabir, 2013).

According to Sharma et al. (2011), the returns of products are associated to the competitive string suit of a company. This is perceived particularly in the case of the food and beverage industry, owing to the high level of intricacy and perishability of products. The competition existing amongst corporations, lawful constraints, and consumer wants, in conjunction with the environmental obligation of businesses, play key roles in the decision making processes regarding reverse logistic procedures and practices across sectors and industries. Hawks (2006) asserts that the environmental aspect of reverse logistics emanates from the fact that its undertakings can bring about the conservation of energy, and reduction of pollution, among other advantages that are environmental-friendly. Owing to this fact, reverse logistics should be included in sustainable processes, and green logistic practices (Vijayan, 2014).

The retail industry is well-renowned and acknowledged for its ground-breaking product return resolutions even during times of intense competition. Retailers in the grocery sector have been among the first to put emphasis on product returns, and the establishment of reverse logistic practices in their supply chain. There is a high likelihood of retailers in the food and beverage industry deploying the use of advanced technologies, such as radio frequency identification (RFID), computerized returns entry, electronic data interchange (EDI) and computerized return tracking, so as to improve the management of reverse logistics (Vijayan, 2014). One of the most significant and determinant factors of reverse logistics is expense, or cost. The expense or outlay in the management of reverse logistics is reliant on the storage period and quality of returns.

Findings

The practices of reverse logistics differ on the basis of the industry of operation, and the position of the different product channels. It is imperative to note; the findings of various studies show that within the industries or sectors where the product returns are of a greater fraction or proportion, the operational expenses have a tendency of decreasing, with the use of more advanced reverse logistic systems and practices. This shows just how important reverse logistics is to the players within the food industry (Hawks, 2006). Retailers of food and beverage products understand that the management of reverse logistics in an effective and successful manner has a constructive effect on their businesses. The sectors or industries that have not yet been forced to spend a lot of resources, in terms of time and energy, taking into account the issues of product returns, are presently making attempts to undertake serious improvements and advancements in their systems (Hawks, 2006).