ISSN (Print) : 0974-6846

Indian Journal of Science and Technology, Vol 9(19), DOI: 10.17485/ijst/2016/v9i19/94193, May 2016 ISSN (Online) : 0974-5645

Analysis of Reverse Logistics Implementation

Barriers in Online Retail Industry
G. Thiyagarajan1* and Saifil Ali2

1
Sathyabama University, Rajiv Gandhi Salai, Chennai - 600119, Tamil Nadu;
deanmech@selvamtech.com
2
St. Theresa International College, Thailand

Abstract
After e-Commerce and m-Commerce boom in India the customer purchasing style is changed totally. The online retailers
try to make a confidence among the customers through on time delivery and replacement of damaged goods soon. Not only
Forward Logistics, but also Reverse Logistics is too critical for online retailer since the products and transactions are huge.
The returns will be high since the customer is purchasing products without touch and feel. To avoid land-filling and also
environmental concerns forced by Governments making Reverse Logistics function critical for many organizations. But
there are many barriers for online retailers to implement Reverse Logistics. The aim of the study is to identify the barriers
that deter the Reverse Logistics implementation with respect to different online retail industries. Empirical evidence and
statistical analysis provide insights in implementing Reverse Logistics by online retailer. In this paper, Analytical Network
Process is used to identify the most affecting barriers for Reverse logistics implementation in four online retail industries.

Keywords: Analytical Network Process, Electronics Industry, Forward Logistics, Reverse Logistics

1. Introduction administration suppliers in Singapore3. Truth be told,

In spite of the fact that Industry-specific barriers
ruin ecological advancement, the writing sets up
Organizational barriers as the essential obstruction to
the selection of natural practices1. The inner barriers
incorporate the absence of duty to nature with respect
to laborers and management furthermore because of
absence of preparing/capabilities of HR1. The start of new
innovation or advancement in an association requires a
critical change in staffing to encourage new innovation
adjustment2. What’s more, top management ought to offer
significance to reverse logistics exercises and additionally
to different associations keeping in mind the end goal to
coordinate every one of the individuals from the supply
chain2.
The purchasers are having more power in supply
chain because of expanded rivalry and a bigger base of
suppliers. The client sentiment is more essential driver
of Logistics management is the data got on the logistics
products are made on client requests and prerequisites
so as not to surge the channel with undesirable stock4.
Focused, promoting, monetary and natural reasons are
all components that have been distinguished as applicable
for the authoritative selection of reverse logistics exercises
and capacities2.
Numerous associations consider the barriers stood up
to when building up these practices to be more noteworthy
than the points of interest that they would get as a result
of their implementation5. European Countries have
stringent law and regulations so Electronics producers
work proficiently for proper collection, recovery and
removal/disposal of products after end-of-life6. There
is less research available on the barriers of RL adoption
by Online Retailers for Indian Electronics Industry.
Indian online buying is growing exponentially, especially
customers are buying Electronics products more and
need of Reverse Logistics is essential to avoid land fill.

* Author for correspondence

 Analysis of Reverse Logistics Implementation Barriers in Online Retail Industry
2. Review of Literature
Reverse Logistics adoption is challenging in India
because of the lack of communal pressure, less focus on
environmental issues and price sensitive market. In India
reverse management practices are often considered as
cost centres and are mostly performed by unorganized
sectors7. RL implementation in developed nations had
seen due to enforced law and regulation on producers to
take back products to recover value or dispose them after
end-of-life. However, it is in nascent stage in developing
countries like India8.
Companies restrictive policies and did not want
to compromise quality of product by using returned
products, hinder companies to become inactive in RL
practices (Subramanian et al; 2014, Jindal & Sangwan;
2011). Legal rules are one of the effective ways for
implementation of RL but were not greeted by companies9.
The current Indian law on mentioning & handling e-waste
is ambiguous (Dutta et al., 2006, Daniel et al., 2009). Due
to lack of proper legislation e-waste illegally imported
to developing nations (Dwivedy et al., Lau and Wang;
2009, Rogers et al.; 2002). Therefore, it is much needed
that all RL partners to develop long term effective plan
for disposition of e-waste and control informal recycling
sector8.
Due to uncertainty in quality and quantity of returned
product remanufacturing planning could not be done that
increase the amount of inventory and affect production10.
It would be hard to market remanufactured products due
to competition from new products. Apart from Marketing,
pricing of those products is so challenging as price is a
sensitive issue in India. Also, vendor of remanufacturing
products will get lower commission as compared to new
product (Jindal & Sangwan; 2011, Pokharel and Mutha;
2009, Daniel et al; 2009).
One of the major problems to practice RL is less
supportive partners in Supply Chain. So there would
be need to redesign forward Supply Chain into closed-
loop Supply chain or separate reverse Supply chain11.
Presley et al.12 suggested that huge amount of capital and
finance would require implementing RL practices. Lau
and Wang11 analyzed developing nations were not able to
achieve ample amount of asset recovery rate due to less
return volume. Ravi and Shankar2 observed that less use
of technology to monitor return and coordination and
collaboration with 3PL providers were barriers to adopt
RL practices.
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This inspired me to deal with the Barriers of Reverse
Logistics implementation by online Retailers. The goal of
this study is to identify the barriers of Reverse Logistics
inside the Organization of online Retailers in different
Industries like Electronics, Footwear, Home & Kitchen
and Textile and to rank them using Analytical Network
Process. Lastly the results of the empirical analysis
using different barriers and different industries will be
illustrated with conclusion.
3. Problem Definition
This paper presents an empirical study of the barriers that
hinder the implementation of Reverse Logistics by Online
Retailers in different Industries. i.e., which of these barriers
constitutes the greatest obstacle, which is most influential
in different Industries how the barriers behave and so on.
There are number of barriers for RL implementation. The
twelve important barriers for implementing the Reverse
Logistics by Online retailer are listed in Table below.
S.no. Barriers
1 Concerned more about Forward Logistics
2 Online Retailers thinking to sell returns in second-
ary market and not optimizing it.
3 Not investing in Technology for Reverse Logistics
4 Lack of information in Technological systems
5 Lack of commitment from Top and Middle Man-
agement
6 In order to implement Reverse Logistics, huge cost
will incur in Finance, Technology and Human
resource departments.
7 Online Retailers are not interested in Reverse
Logistics since they are just middleman.
8 There is a notion that returns are waste.
9 Reverse Logistics flows through multiple depart-
ments, Channels and multiple Organization.
10 Needs technology to have high user experience
which reflect in touch and feel of products, reduce
returns by the customer.
11 No stern measure from government to prevent
land-filling.
12 No Optimization for reaching returned products to
OEM and Suppliers.
4. Research Methodology
The study was conducted among the online Retailers
who are dealing with Electronics products, Footwear,
Indian Journal of Science and Technology
 G. Thiyagarajan and Saifil Ali

Textile and Home & Kitchen industries. A structured self
administrated questionnaire was designed and got online
response. Snowball sampling method was adopted to
obtain the responses of the online retailers.
The Analytic Network Process (ANP) is an organized
system for sorting out and examining complex choices.
ANP was created by Thomas L. Saaty in the 1996 and
has been broadly examined and refined from that point
forward. ANP is utilized as a part of this paper to rank
the reverse logistics barriers as for various commercial
enterprises.
Points of interest of utilizing ANP are:
• ANP will be valuable to dissect complex choice issues
• ANP is a basic leadership technique and speculation
of AHP.
ANP Overview:
• In ANP Standards, Sub-Criteria as well as
Replacements are considered as hubs in a network.
• Each of these hubs may be contrasted with whatever
other hub, the length of there is a connection between
them.
• Ranking of choices may rely on upon the weightage
of criteria as well as choices given will impact the
positioning of the criteria.
• In ANP the hubs may be gathered into groups.
• The network of ANP is spoken to in Matrix
• The grid is gathered by posting of all hubs on a level
plane and vertically and called as Super-Matrix.
Perception of Barriers for implementing Reverse Logistics.

Table 1. Barrier perceptions

Criteria Criteria Cluster Alternatives
Code
PB Policy Barrier PB1 Concerned more about Forward Logistics
PB2 Online Retailers are not interested in Reverse Logistics since they are just middleman.
PB3 There is a notion that returns are waste.
PB4 No Optimization for reaching returned products to OEM and Suppliers.
SB Strategic SB1 Reverse Logistics flows through multiple departments, Channels and multiple Organizations.
Barrier SB2 Lack of commitment from Top and Middle Management
SB3 In order to implement Reverse Logistics, huge cost will incur in Finance, Technology and Hu-
man resource departments.
SB4 Online Retailers have the mindset to sell returns in Secondary market.
TB Technological TB1 Online Retailers not interested in Technology investment for Reverse Logistics
Barrier TB2 Lack of information in Technological systems
EB External EB1 Customers expect high user experience which reflect in touch and feel of products, will in turn
Barrier reduce returns by the customer.
EB2 No stern measure from government to prevent land-filling.

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 Analysis of Reverse Logistics Implementation Barriers in Online Retail Industry

Table 1 shows the statistics of Barriers for Table 4. Criteria preferences with Intensity – with
implementing Reverse Logistics in Online ecommerce respect to SB
specific to Electronics Industry. Cluster SB:
Here, the criteria will be contrasted as with that they A B More Important Intensity
are so critical to the chiefs, regarding the objective. Every SB1 SB2 B 7
pair of things in the criteria will be thought about; there SB1 SB2 B 5
are sums of six sets (PB&SB, PB&TB, PB&EB, SB&EB, SB1 SB3 B 8
SB&TB and TB&EB). SB1 SB4 B 3
If one Barrier is more important than the other, SB1 TB1 A 5
then as per ANP Model the importance is expressed by SB1 TB2 B 2
entering a number. Table 2 give the intensity according to SB2 SB3 A 4
the importance of the barriers.
SB2 SB4 A,B 1
Table 2. Intensity given for barriers SB2 TB1 A 5
The Fundamental scale for pair wise comparisons SB2 TB2 B 4
Intensity Definition SB3 SB4 B 3
1 Equally important SB3 TB1 A 5
2 Equally important - Slightly more important SB3 TB2 A 4
3 Slightly more important SB4 TB1 A 7
4 Slightly more important - Significantly more SB4 TB2 A 9
important
5 Significantly more important Repeat the same procedure and use the scale to define
6 Significantly more important - Very Significant the importance of alternatives by cluster PB, cluster
proven importance EB and cluster TB compared with other cluster. All the
7 Very Significant proven importance clusters are compared with the alternatives and the results
8 Very Significant proven importance – Extreme are displayed below:
Importance
9 Extreme Importance
1. Analysis of Results:

First, the judgments about all the comparisons of Table 5. Final weight of reverse logistics barriers
cluster is made by entering them in ANP as numbers as Criteria Electronics Footwear Home & Textile
per the Table 3. Kitchen
EB1 0.074705 0.140181 0.260786 0.524328
Table 3. Cluster preferences with Intensity EB2 0.074912 0.1322 0.571924 0.220963
Criteria Preferences: PB1 0.075021 0.130742 0.555311 0.238925
A B More Important Intensity PB2 0.085512 0.152458 0.495504 0.266526
SB PB B 3 PB3 0.288685 0.311549 0.192448 0.207318
SB TB A 5 PB4 0.169549 0.468769 0.141681 0.220002
SB EB A 4 SB1 0.245603 0.534545 0.090972 0.128881
PB TB A 7 SB2 0.212444 0.461071 0.171954 0.154531
PB SB A 9 SB3 0.221087 0.310223 0.206853 0.261838
PB EB B 6 SB4 0.169278 0.260307 0.271811 0.298604
TB EB B 8 TB1 0.53535 0.229734 0.140453 0.094463
TB2 0.455865 0.277866 0.157622 0.108647
Use the scale to define the importance of cluster SB,
compared with other clusters (Table 4).

4 Vol 9 (19) | May 2016 | www.indjst.org Indian Journal of Science and Technology
 G. Thiyagarajan and Saifil Ali

Figure 4. Raw synthesis values.

Figure 1. Weight of Reverse Logistics Barriers

normalized by clusters.

Figure 5. Sensitivity analysis.

Figure 2. Normalized values.

Figure 6. Sensitivity for RL barriers.

Figure 3. Idealized values.

Vol 9 (19) | May 2016 | www.indjst.org Indian Journal of Science and Technology 5
 Analysis of Reverse Logistics Implementation Barriers in Online Retail Industry

6. Acknowledgement
The authors are thankful for unanimous reviewers of
the paper for their constructive feedback and helpful
comments which improved the quality of the paper.

Figure 7. Final ranking of alternatives.
Alternatives:
Table 3. Final ranking of alternatives
Industries Rank
Electronics 4 ply chain management. Production and Inventory Man-
Footwear 1 agement Journal. 1999; 3(40):7–15.
Home & Kitchen 2 5. Rogers D, Tibben-Lembke R. An examination of reverse
Textile 3 logistics practices. Journal of Business Logistics. 2001;
5. Conclusions
Companies are trying to adopt Reverse Logistics practices
due to return from the customers, increased pollution and
enforced legislations. The barriers inside the organization
make it difficult in getting success. There comes a need
for ranking the barriers which will help organizations to
implement solution on priority. This research has 12 RL
implementation barriers. ANP is applied to all 12 barriers
along with alternatives which are 4 different industries. The
results show the barriers are more in Footwear followed
by Home & Kitchen, Textile and Electronics Industry.
The notion that returns are waste is first, RL flows thru
multiple channels is the second and RL implementation
costs huge is the third are the three important barriers of
RL adoption in Electronics Industry. Limitation of this
study is mainly analyzing in Online Retailer perspective.
The study can be extended by including qualitative and
quantitative attributes by different approaches such as
Fuzzy ANP, Fuzzy VIKOR and Fuzzy TOPSIS.
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