Relationship between reverse logistics practices and organizational performance of manufacturing firms in Kenya
Abstract
A growing concern to durable product manufacturers is how to manage the products they
manufacture once they reach their end of life. Manufacturing industries are currently
facing the challenge of complying with many regulatory requirements from various
regulatory institutions. The consequences of non-compliance with the set environmental
requirements can be expensive and time consuming. Reverse logistics sometimes referred
to as “product take-back” is one of the concepts in the wider concept of green supply
chain management that is seen as a possible solution to this. It enhances customer loyalty
and service, recovers asset value faster and achieves sustainability objectives and goals. It
can also result in improved brand image, better relations with stakeholders and improved
personnel motivation. Though studies have shown the positive impacts of adoption of
various reverse logistics practices, none has specifically shown how adoption of reuse,
remanufacture and recycling reverse logistics practices could impact on organisational
performance of manufacturing firms in Kenya. A descriptive cross-sectional survey study
was used to provide empirical data to help address the existing research gap. The
objectives of this study were to establish the extent to which manufacturing firms in
Kenya have adopted reverse logistics practices and determine the relationship between
reverse logistics practices adoption and organisational performance of manufacturing
firms in Kenya. The study sample consisted of 75 managers of manufacturing firms
selected through stratified random sampling. The managers answered questionnaire items
constructed by the researcher. The inferential relationship was imputed using the ordered
probit regression analysis. The findings showed that manufacturing firms in Kenya have
adopted reverse logistic practices to appreciable levels. Specifically, it was seen that
increased organisational performance of manufacturing firms were found to be dependent
on increased adoption of remanufacture and recycling reverse logistics practices with
minimal adoption of reuse reverse logistics practice. It is therefore recommended that the
management of various manufacturing firms consider putting in place targeted measures
intended to spur adoption of reverse logistics practices. These include ensuring that all
manufacturing firms create and support an environmental department within their firms
tasked with monitoring the process of adoption of reverse logistics practices. Similarly,
the firms should enhance particular elements of reverse logistics practices such as
generation of energy from renewable sources of energy, designing products for reuse and
setting up repair workshops.