Revealing an invisible giant

By:
Harold Krikke (Open University)
Dianne Hofenk (Wageningen University),
Yacan Wang (Beijing Jiaotong University)

Forward supply chain actors are increasingly involved in the full life cycle of their products and the packaging used. Where in the past these were disposed of via (public) waste management systems or sold in cascade markets, now returns management becomes key to focal companies. Moreover, recent literature emphasizes that returns can be a value creator rather than a cost of business as it can save the environment, provide critical resources and customer value. But relevant, up-to-date data on returns and return practices is scarce, whereas such data is essential to show the potential value of returns and make a business case for returns management to practitioners. Based on a global survey among man- ufacturers/wholesalers/retailers and third party service providers, this paper presents comprehensive descriptive statistics on and analysis of current return practices. We develop and test propositions on the drivers, volumes and value of different returns along the life cycle; show the inefficiencies in current return practices leading to value destruction instead of the advocated value creation; and compare return practices in different regions and industries. We also provide recommendations for converting value destruction into value creation. Although progress is slow, there are hopeful signals that the potential of returns managements will be unlocked in the near future.