Factors that affect the adoption level of

reverse logistics in Malaysia’s Retail

Industry
Tutorial Group 2
Presented by: Chin Qian Ying 19024173
Justine Koh Wei Lin 18037358
Khoo Shu Ying 19043629
Moy Yuying 18011585
Introduction
● Reverse logistics has become an important part in the business world.
● In Malaysia, the implementation of reverse logistics process flow is much
more reactive, with much less visibility.
● In Malaysia, reverse logistics is still in its infancy and it is not widely used
in the retail industry.

Presented by: Chin Qian Ying

Introduction
● The majority of customers who have a poor return experience will not purchase
with the same merchant again (Lysenko-Ryba & Zimon, 2021)
● The effective return policy in the retail industry may strengthen the shoppers’
purchase confidence and customer satisfaction, resulting in a positive brand
image of the firms (Jalil, 2019).
● Gaining competitive advantage and able to satisfy as well as gain customer
loyalty in the driven market.

Presented by: Chin Qian Ying

 Discussion of Problem
● There are many causes which prohibit the Malaysian retail industry from
implementing the reverse logistics.
● The adoption rate of reverse logistics by Malaysian firm is low (Nik Ab Halim, 2011).
● Limited journals focusing on the impact of reverse logistics adoption on the retail
industry.
● The obstacles of adopting reverse logistics faced by Malaysia retail industry are
technological barriers, financial barriers, lack of awareness and human resource
barriers.

Presented by: Chin Qian Ying

Research Questions
1. What factors will influence Malaysia's retail industry's adoption of reverse logistics?
2. How do these factors affect the level of adoption of reverse logistics in the Malaysia’s
retail industry?

Research Objectives
1. To determine the variables influencing the adoption of reverse logistics in Malaysia’s
retail business.
2. The goal of this study is to find out what factors will impact the extent of reverse
logistics adoption in Malaysia’s retail business

Presented by: Chin Qian Ying

Research Gap
Theoretical Gap :

The previous research in the absence of the retail industry in Malaysia, it only
mentioned that there is a low level of reverse logistics in Malaysia due to high costs and
other constraints (Geyer and Jackson, 2004).

Practical Gap :

Malaysia's retail industry would have better understanding to effectively adopt reverse
logistics as this research paper has identified the barriers that restrict the adoption level
of reverse logistics.
Presented by: Moy Yuying
Research Gap
Location Gap:

There are limited studies related to the adoption level of reverse logistic in
Malaysia. However, we realized that the reverse logistics adoption level in other
countries such as the United Kingdom is higher compared to Malaysia.

Analysis Gap:

Reverse logistics should be implemented in the Malaysian retail industry as it

alleviates environmental issues and generates economic welfare for firms and is
therefore, a major topic of concern (Eltayeb & Zailani, 2011).

Presented by: Moy Yuying

 Scope of the Study

● The scope of the study for our research is to measure the reverse logistics adoption
level in the Malaysian retail industry.
● The study will be covering the constraints of adopting reverse logistics, such as
technological barriers, financial barriers, lack of awareness and human resource
barriers would bring an impact towards the adoption level of reverse logistics in
Malaysia retail industry.

Presented by: Moy Yuying

 Significance of the Study
● To enhance the knowledge on Theory of Constraints.
● To encourage companies to adopt reverse logistics effectively in the future.
● To assist in increasing the company’s reverse logistics adoption rate in Malaysia.
● By implementing reverse logistics, firms will become conscious of their
environmental aims.
● To improve the Malaysia’s retail industry’s long term economic advantages in
terms of GDP by using reverse logistics.

Presented by: Moy Yuying

Literature
Review
 Theory of Constraints (TOC)
Theory and Concept

● TOC is a Thinking Process that mainly addressing the three fundamental questions:

(i) What to change (ii) What to change to (iii) How to cause the change

● Theory of Constraint as an approach that focuses on enhancing the performance of systems by focusing
on the weakest rings in the chain.

Establish the reason

● Based on the previous research, it shows that the adoption rate of reverse logistics in Malaysian firms is
low, which includes high costs and other constraints (Geyer and Jackson, 2004).
● Our group will research on the ‘other constraints’ by applying Theory of Constraints.

Presented by: Moy Yuying

 Cont’d

Financial Barrier

● Cost considerations are a prime challenge in commercial recycling (Ravi & Shankar, 2005).
● The high initial and operating costs is the major financial constraint that affects many companies not
practicing reverse logistics (Abed et al., 2013).
● The lack of economies of scale is also a significant financial barrier that affects the adoption level of
RL in the retail industry (Abdulrahman et al., 2014).

H1: Financial barriers and the adoption level of reverse logistics have the relationship in the retail industry.

Presented by: Khoo Shu Ying

 Cont’d

Technological Barrier

● Reverse logistics technology is not so advanced and this would affect the reverse logistics process
(Waqas M et al., 2018).
● Information systems are mandatory for creating an interconnection to accomplish an effective reverse
logistics operations.

H2: RL information technology will highly be correlated with the adoption level of reverse logistics

Presented by: Khoo Shu Ying

 Cont’d

Lack of Awareness

● Companies are not committed to reverse logistics because they don’t know the possible benefits
(Hazen et al. 2012).
● Increasing understanding of reverse logistics may gain economic benefits by reusing returned goods
(Sharma et al., 2011).

H3: Lack of awareness and the adoption level of RL is correlated in the retail industry.

Presented by: Khoo Shu Ying

 Literature Review

Human Resource Barrier

● Reverse Logistics is a process that flows through multiple departments and channels (Thiyagarajan, G.,
2016).
● Scarcity of specialist and insufficient technical knowledge and expertise will act as a barrier to RL
activities (Hillary, 2004).

H4: Human resource barriers and the reverse logistics adoption level have a relationship in between.

Presented by: Justine Koh Wei Lin

Conceptual Framework

Presented by: Justine Koh Wei Lin

Methodology

Presented by: Justine Koh Wei Lin

 Research Method

● Quantitative method
● Correlational Model
● Survey Questionnaires
● Coding process of our quantitative research: Results gathered from
Google Form > excel sheet > SPSS
● Triangulation
Primary data, past journal and website sources to improve the
validity.

Presented by: Justine Koh Wei Lin

 Sampling Techniques

● Data collection has been particularly difficult in the challenging

Covid-19 pandemic context.
● Sampling frame and location: Target audience would be about 200
participants and are in Malaysia & United Kingdom
● Target Population: distributed to the people that have experienced
reverse logistics through the retail industry at least one.
● Type of sampling technique: Probability and non-probability
sampling technique

Presented by: Justine Koh Wei Lin

Data Collection Procedure
Distributing online social platform

Using a 5 points likert scale ·(Sachdev, et al. 2004).

Target respondents

Demographic Characteristics

Questionnaires
Presented by: Justine Koh Wei Lin
References
Abdulrahman, M. D., Gunasekaran, A., & Subramanian, N. (2014). Critical barriers in implementing reverse logistics in the Chinese
manufacturing sectors. International Journal of Production Economics, 147, 460–471. doi:10.1016/j.ijpe.2012.08.003

Abed, M., Pabian, A., Starostka-Patyk, M. & Zawada, M.(2013). Barriers to reverse logistics implementation in enterprises. 2013
International Conference on Advanced Logistics and Transport. doi:10.1109/icadlt.2013.6568510

Geyer, R., & Jackson, T. (2004). Supply Loops and Their Constraints: The Industrial Ecology of Recycling and Reuse. California
Management Review, 46(2), 55–73. doi:10.2307/41166210

Hillary, R., (2004). ‘Environmental management systems and the smaller enterprise’, Journal of Cleaner Production, 12, pp. 561–569.

Jalil, E. E. A. (n.d.). Customer satisfaction and reverse logistics in e- commerce ... CUSTOMER SATISFACTION AND REVERSE
LOGISTICS IN ECOMMERCE: THE CASE OF KLANG VALLEY.
https://journal.oscm-forum.org/journal/proceeding/download_paper/20191207190137_OSCM_2019_paper_102.pdf.

Lysenko-Ryba, K., & Zimon, D. (2021). Customer behavioral reactions to negative experiences during the product return.
Sustainability, 13(2), 448. https://doi.org/10.3390/su13020448
References
Nik Abdullah, Nik Ab Halim. (2015). The Pressure for Reverse Logistics Adoption among Manufacturers in Malaysia. Asian Journal
of Business and Accounting. 8. 151-178.

Sharma, S.K. et al., 2011. Analysis of barriers for reverse logistics: An Indian perspective. International Journal of Modeling and
Optimization, pp.101–106.

T. Hazen, B., Huscroft, J., J. Hall, D., K. Weigel, F., & B. Hanna, J. (2014). Reverse logistics information system success and the
effect of motivation. International Journal of Physical Distribution & Logistics Management, 44(3), 201–220.
https://doi.org/10.1108/ijpdlm-11-2012-0329

Thiyagarajan, G., & Ali, S. (2016). Analysis of Reverse Logistics Implementation Barriers in Online Retail Industry. Indian Journal
of Science and Technology, 9(19). https://doi.org/10.17485/ijst/2016/v9i19/94193

Tibben‐Lembke, R. S., & Rogers, D. S. (2002). Differences between forward and reverse logistics in a retail environment. Supply
Chain Management: An International Journal, 7(5), 271–282. https://doi.org/10.1108/13598540210447719

Waqas, M., Dong, Q., Ahmad, N., Zhu, Y., & Nadeem, M. (2018). Critical Barriers to Implementation of Reverse Logistics in the
Manufacturing Industry: A Case Study of a Developing Country. Sustainability, 10(11), 4202. doi:10.3390/su10114202
Thank You!