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.