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April, 2020
DECLARATION
I, Dhiraj Pd. Joshi declare that this seminar paper entitled “Reverse Logistics and its
Application in a Nepalese Context: A Case of soft drink bottling industry” is submitted in
partial fulfillment of the MBA Degree, the faculty of Management, Purbanchal University is my
original work carried out under the guidance of Mr. Sushil Budathoki, Vice-principal of
WHGSM, has not been submitted anywhere for the award of any other degree or commercial
purpose. In keeping with the ethical practice in reporting scientific information, due
acknowledgements have been made wherever the finding of others have been cited.
__________________________________________
At the beginning I would like to express my cordial gratitude to Dr. Uttam Kumar Regmi
Associate Professor of PU (Course Convener), Similarly, I would like to express my sincere
gratitude to Mr. Sushil Budhathoki (Vice principal of WHGSM) who instructed and guided me
in preparing this report.
I would also like to express my deepest appreciation to respected all my colleagues and
Whitehouse GSM staffs for directly and indirectly for their support to make this report success.
Also, I would like to thank to entire team members of the bottling industry for providing the
knowledge, materials, and information which is highly appreciated from my heart.
Globalization of economy has heightened the strategic importance of Supply Chain in diverse
business environment.
In today's highly competitive business environment, the success of any business depends to a
large extent on the efficiency of the supply chain. Competition has moved beyond firm-to-firm
rivalry to rivalry between supply chains. Management now has clear understanding that
profitability of the company will be affected by mistake of any member of Supply Chain.
Though reuse of products and materials is a common phenomenon, companies have long ignored
this part of the supply chain, known as reverse supply chain or backward supply chain. Such
The report “Reverse Logistics & its application in Nepalese Context: A Case of Soft Drink
Bottling Industry” has been prepared based on data collected from primary and secondary
sources. The objective was to gain an understanding of reverse logistic in supply chain, its
The finding of the study shows that, the reverse logistic of soft drink starts with inspection and
sorting which includes sorting according to quality state and recovery route followed by
recycling to get desired quality for reuse and at last, the filled bottles are bought in the market.
Table of Contents
TABLE OF CONTENTS
S. No Page No
Declaration i
Approval Letter ii
Acknowledgements iii
Executive Summary Iv
Table of Content v
List of Figures viii
List of Tables ix
Abbreviations x
CHAPTER-I: INTRODUCTION....................................................................................................1
1.1 Background/Introduction..................................................................................................1
1.3 Objectives..........................................................................................................................4
3.2.2 Feedback..................................................................................................................17
3.2.3 Reusability...............................................................................................................17
4.2 Conclusions.....................................................................................................................21
4.3 Recommendations...........................................................................................................21
References......................................................................................................................................23
LIST OF FIGURES
RL Reverse Logistic
LTD Limited
1.1 Background/Introduction
Process of planning, implementing and controlling the efficient, cost-effective flow of raw
materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal”
Reverse Logistics refers to the movement of goods from the end point of usage to the
initiation point in order to add more value or to dispose it. Reverse Logistics is not limited to
reusing of containers or recycling of packaging material. Reverse Logistics will not exist, if
the goods or materials does not send backward Returned goods are because of seasonal
inventory, damage, recalls and wrong forecasting are the major reasons of Reverse logistics.
Soft drink bottling industry industries are the main pioneers of reverse logistics in Nepal. The
empty bottles returned from the point of consumption back to the yard for refilling and
reusability purposes. Unlike tradition forward logistics network does not support RL, though
requires new horizon of backward distribution keeping efficiency and effectiveness in the
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Managing and having efficient supply chain is not an easy task. Companies must ensure that
the link in supply chain is as strong as the one preceding it. However, it is impossible to
more than reusing and recycling packaging materials, redesigning packaging to use less
material or reducing the energy and pollution from transportation and other activities.
The only bottler of Coca-Cola products in Nepal, Bottlers Nepal Limited (BNL) has two
plants in the country namely Kathmandu Bottlers Nepal Limited and Bharatpur Bottlers
Nepal (Terai) Limited situated at Kathmandu and Bharatpur, respectively. The import of
Coca-Cola from India to Nepal first began in 1973 and six years later in 1979, the local
production of the drink in the country itself was started. Promoted by the Khetan Group, one
of the leading business organizations in Nepal, Bottlers Nepal also handles the bottling and
Entitled as “Refresh the Marketplace” the marketing, sales and distribution strategy for
Bottlers Nepal Limited include a robust Consume Response System to address any consumer/
customer concerns, ideas, suggestions either on product and its quality or on stock supply,
maintenance of equipment, etc. The company makes sure to deal all consumer concerns with
a fair, timely and friendly manner so as to satisfy them and resolve their concerns. The
television, hoardings, truck backs, etc. along with emphasis on consumer price to enforce
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price compliance. It focuses on making innovative packages and pack sizes so that the
consumers get better value and also the storage of the products are easy for the retailers. The
packs and prices come in the manner that is affordable to the people of all sectors.
Its approach of conducting business makes sure to adapt and implement the approaches that
protect, preserve and enhance the environment and for that it has built a fully automatic
Effluent Treatment Plant (ETP) in each of its plants that have been in operation since 2001 to
protect the local environment along with meeting the standards of The Coca-Cola Quality
System (TCCQS).
sector, Bottlers Nepal Limited, in association with the local community, supports Free Health
Check-up Clinic at Bharatpur which is managed by a qualified MBBS Doctor and trained
paramedics who extend free check-ups to communities around the plant in the Terai area.
Since its establishment, Bottlers Nepal Limited has been one of the leading companies in
Nepal handling the bottling and marketing of the soft drinks in the country. With its plants set
up in the valley and in Terai region, BNL has expanded its coverage from the valley to the
inner lands of Terai serving to quench the thirst of the people living in the Terai region
If we analyze different industries of Nepal, we tend to realize that RL has not been a medium
of efficient and effective practice in business sector due to lack of infrastructure and
knowledge. Soft-drink bottling industry unconsciously tends to practice RL for the reuse
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Due to lack of information on reverse flow of logistical activities from point of consumption
Likewise, an effective set up of reverse logistic is SCM helps in identifying areas within the
enterprises that are using unnecessary resources. This will improve the company’s
1.3 Objectives
The general objective of this research is to study about the reverse logistic and its application
a. To study about the application of reverse logistic in soft drink bottling industry?
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1.4 Significance of Study
Scope of the study is to create effective and efficient reverse logistics frame work which will
guides soft drink manufacturer and reverse logistics implementers to optimize their supply
chain in the current market scenario of soft drink bottling distribution. It will also help future
researchers to quantify all the variables effecting reverse flow of soft drink bottling industry
This will help in identifying areas within the enterprises that are using unnecessary resources,
time and money for supply chain management. This will improve the company’s
competitiveness as well as improve the company’s overall profitability and brand value in the
market.
This study focus on importance of reverse logistic and its application in supply chain
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1.6 Organization of Study
In this report there are four chapters namely Introduction, Literature review, Observation and
Analysis, Findings, conclusions and recommendations. The first chapter includes the
introduction about the supply chain management, profile, statement of problems, limitation,
and organization of the study. The second chapter is about the Literature Review deals about
the Past reviews of relating study. The third Chapter Observation and Analysis deals with the
presentation and analysis of all the relevant collected information and presented data analysis.
The fourth chapter includes findings, conclusions and recommendations summarizes the
Reverse logistics of Bottling Industry. It mentions about the problems of Bottling industry
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CHAPTER: II- LITERATURE REVIEW
Supply chain management includes the movement and storage of raw material, Work-in-
progress inventory and finished goods from the point of origin to the point of consumption.
Interconnected or interlinked networks, channels and node business are involved in the
provision of product and services required by end customer in supply chain. SCM has been
defined as the design, planning, execution, control and monitoring of supply chain activities
Organization increasingly find that they must rely on effective supply chain to compete in
global market.
SCM is important for all the companies. SCM is all about having the right product in right
place at right time and in right price & condition. Charles Dominick explains, the three types
of entities of a supply chain: customer, a producer and the producer suppliers. SCM oversees
and optimizes the process of acquiring inputs from suppliers, converting those inputs into a
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2.1.2 Reverse Logistics
Reverse logistics stands for all operations related to the reuse of products and materials. It is
"the process of planning, implementing, and controlling the efficient, cost effective flow of
raw materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal.
More precisely, reverse logistics is the process of moving goods from their typical final
destination for the purpose of capturing value, or proper disposal. Remanufacturing and
refurbishing activities also may be included in the definition of reverse logistics. (Hawks,
Karen, 2006).
Reverse logistics stands for all operations related to the reuse of products and materials. It is
“the process of planning, implementing, and controlling the efficient, cost effective flow of
raw materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal.
This also may be included in the definition of reverse logistics.” The reverse logistics process
includes the management and the sale of surplus as well as returned equipment and machines
from the hardware leasing business. Normally, logistics deal with events that bring the
product towards the customer. In the case of reverse logistics, the resource goes at least one
step back in the supply chain. For instance, goods move from the customer to the distributor
or to the manufacturer.
When a manufacturer’s product normally moves through the supply chain network, it is to
reach the distributor or customer. Any process or management after the sale of the product
involves reverse logistics. If the product is defective, the customer would return the product.
The manufacturing firm would then have to organize shipping of the defective product,
testing the product, dismantling, repairing, recycling or disposing the product. The product
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would travel in reverse through the supply chain network in order to retain any use from the
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Source: (Research, 2020)
1. Collection: It means bringing the product from the customer to a point of recovery.
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2. Inspection/selection/sorting: The product are sorted according to the planned recovery
The list of Nepalese industries where reverse logistic plays an important role:-
4. Consumer Goods Industries: To fulfill the commitments of after sale service and buy
back guarantee.
In today’s marketplace, the challenges for retailers and vendors is to process returns at
proficiency level that allow quick, efficient collection of merchandise. Customer requirement
facilitate demand for high standard of service that includes accuracy and timeliness. The
challenge lies in shortening the link from return origination to the time of resell. Firm needs
to ensure that they meet customer requirements of proper handling and administration, credit
transportation, warehousing and inventory control are similar throughout the logistic process,
but they are not identical in forward and reverse flows. Another barrier is that there is lack of
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commitment on the part of senior management. Company policies, competitive issues,
management inattention, and resource limitation, legal & environmental issues creates
Map or flow-chart the reverse logistic process to understand their component and
relationships.
Ensure economic of scale are sufficient to make a reverse logistics and environmental
program viable.
Traditionally, the product flow in a distribution channel happens from the industry towards
the final consumer. However, some factors such as defective products, or damages, expired
dates, order errors, among others, cause a flow in the opposite sense which generate the need
for a logistics operation called reverse logistics (Gisele and Rosane, 2006) as well as the
minimization of the consequences on the environment that is environmental logistics.
Reverse logistics involves the process of planning, implementing, and controlling the
efficient and cost effective flow of raw materials, in-process inventory, finished goods and
related information from the point of consumption to the point of origin for the purpose of
recapturing value or proper disposal. More precisely, reverse logistics is the process of
moving goods from their typical final destination for the purpose of capturing value, or
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proper disposal (Rogers and Tibben-Lembke, 1999). But the potential neglect of the reverse
logistics process can reduce the amount of value the firm may extract from returned product,
negatively impact customer relationships, and possibly increase reverse logistics costs due to
inadequate management oversight of the process (Souza et al., 2006).
Although reverse logistics deals with product returns, it presents one of the biggest
operational challenges in the world of manufacturing since the activities involved are many
and tends to be so varied. Some of these challenges include the problems of collecting
returns, sorting the returned products; return abuse, customers having lost confidence in
returns, credit approval and repair activities, lengthy processing cycle times of returns and
issues relating to the environmental sustainability. So it is important to perform reverse
logistics efficiently and effectively to obtain maximum benefits of its
opportunities[ CITATION Jai05 \l 1033 ]. (Adebayo, 2012).
Interestingly, effective reverse logistics is believed to result in direct benefits, including
improved customer satisfaction, decreased resource investment levels, and reductions in
storage and distribution costs [ CITATION Moe16 \l 1033 ].
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CHAPTER-III: OBSERVATIONS AND ANALYSIS
The research was Qualitative in nature. More classical approach has been adopted, research
based on primary data and secondary data as well. Primary data were collected through
questionnaire, interview. The secondary data were collected from different articles and
journals.
Here the data are used to complete the research are collected from the equally primary and
secondary sources. There only qualitative data is are used to make the decision.
A. Primary Data
Primary data collected in the form of in-depth structure interviews of distribution and
B. Secondary Sources
The secondary data were collected through company's yearly business review report,
website of the company and from internet.
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3.1.3 Data Analysis Techniques
Method of comparison
Having reverse logistics company can operate their supply chain management effectively.
gives better customer satisfaction, its lean supply chain management in that way in which we
get better customer feedback from it, moreover reverse logistics can also be a reason to
Though reuse of products and materials is a common phenomenon, companies have long
ignored this part of the supply chain, known as reverse supply chain or backward supply
chain. A common example of reverse supply chain is the soft drinks bottles pickup and
delivery system, where soft drink bottles are returned and reused repeatedly. Companies were
so long under the impression that returns compared to sales generate little or no money.
However, with the growth of direct-to-consumer channels like catalogs and Internet, sales
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Source: (slideshare.net)
Reverse logistics Enhanced diagnostic reporting and status visibility for business partners and
end consumers by taking this statement we can analyze current operation of soft-drink
For every order of beverages, the retailer pays the bottler the associated deposits and then
Customers return their empty containers to stores or depots, and the bottlers retrieve them for
refilling.
So it indicates that implementing reverse logistics we can improve quality of product and
customize it as need of customer ,at this point question arises that how reverse logistics help
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3.2.2 Feedback
Improving Customer Service Quality” concluded that many organizations are realizing that
reverse logistics can provide a significant opportunity for competitive advantage whereby
3.2.3 Reusability
Practically all businesses must deal with returns of some nature because of issues such as
marketing returns (i.e., customers change their minds or find the product unacceptable),
damage or quality problems, overstocks, or merchandise that is brought back for repairs,
Shelf life is the recommendation of time that products can be stored, during which the
defined quality of a specified proportion of the goods remains acceptable under expected (or
specified) condition of distribution, storage and display. The length of the product life cycle
Part of the possessions which are sold by the means of direct distribution chain returns to the
business or productive cycle by reverse distribution channels. The post sale possessions, with
little or no use at all, constitute the post-sale reverse channels, while the post consuming
possessions which were used and don’t show interest to the first possessor, will be returned to
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3.3 Reverse Logistic of Beverage Company:
The reverse logistics of beverage containers is still in its formative stage in the city of Lagos.
indiscriminately despite that their residues can be reused as secondary materials in the
packaging industry and other supply chains. Undoubtedly, waste collection is a common
phenomenon among developing nations and this societal challenge has created a
disconnection between the consumers of beverage drinks and the recycling industry that
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Source: (Research 2020)
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CHAPTER-IV: FINDINGS, CONCLUSION AND
RECOMMENDATION
After the thorough study of the primary data and secondary data the following major findings
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4.2 Conclusions
Our study showed that soft drink bottling industry has bearing loss due to lack of
knowledge about RL ,after analyzing this study we come to know that what are major
critical failure point of soft drink bottling and industry and in which area they have to
focus.
In return processing Damages has a huge impact in logistics, damages shows two
important factors one is either your logistics handling system is inappropriate or your
soft drink industry is facing huge problem in implementing reverse logistics, including
requirement of work force, less determination after sales etc, study proved that by
implementing lean Reverse logistics system in your logistics network and by focusing on
critical success point you can increase your sales and maximize profit as well, RL also
help company to innovate according to the perception of your end customer ,because RL
help manufacture r to get continuous connection between major stake holders of supply
chain management which gives you real time feedback ,and if companies analyze and
4.3 Recommendations
Soft-drink manufacturer should give a primary focus to Distribution channel, and they
should distribution channel auditing and see where leakages in the distribution
channels.
Company should select that distributor who are fully equipped with technology and
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Study tell us that RGB Return glass bottling process is a major part of RL network, if
a company wants to create efficient RL network then they should increase the rate of
Study showed that Reverse logistics can play a vital role to get competitive edge in
industry, without any doubt we can say that soft-drink Company should impalement
Company should define their critical success points of RL and create an appropriate
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References
Anindya Roy (2003), Faculty Associate with ICFAI Press .How Efficient is Your Reverse
Container Recycling Institute (CRI), 1998. Beverage Container Reuse and Recycling in
Rogers, D.S. and R.S.Tibben-Lembke (1999), Going Backwards: reverse logistics trends and
Moeinaddini, M. (2016). Reverse Logistics in Food Industries:A Case Study in Malaysia. Int.
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Annex
What is the supply chain of the company?
How do you coordinate with the retailer and distributor to manage the reverse
logistic?
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