Reverse Logistics Practices And Sales Growth Of Manufacturing Firms In Nigeria

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Reverse Logistics Practices And Sales Growth Of Manufacturing Firms In Nigeria


Abstract


The study focused on the effect of reverse logistics practices on sales growth of Starline Nigeria Limited, Abia State. The population of the study was made up of the customers as well as the marketing staff and distributors of Starline Nigeria Limited, Abia State. Both random and purposive sampling was used in the study because of the nature of the study population. The data generated in the study were analysed with simple regression model. The findings of the study revealed that remanufacturing as a reverse logistics practice has a positive and significant effect on sales growth of Starline Nigeria Limited, Abia State. Also, repackaging as a reverse logistics practice was found to positively and significantly affect sales growth of Starline Nigeria Limited, Abia State. The study recommended that Starline Nigeria Limited should invest in appropriate information technology like blockchain that will assist the firm to establish effective data collection system to improve the effectiveness of its reverse logistics processes. The firm can communicate and share information with its supply chain members regarding the collection and handling of customers’ product returns.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses
  • 4.5 Discussion of Findings

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background to the Study

Reverse logistics, sometimes known as “product take-back,” is one of the principles covered under the Supply Chain Management umbrella (SCM). Reverse logistics refers to a procedure in which a producer collects previously transported items from the point of consumption for recycling and recovery (Fortes, 2009). It entails recovering the product from the ultimate customer in order to capture value or dispose of it properly. Due of the apparent advantages associated with reverse logistics, it has recently gained prominence. Enhanced economic performance, decreased environmental degradation, increased social performance, and increased operational performance are just a few of the advantages.
Product returns will always be a problem as long as items are created and sold and how businesses manage the product return (reverse logistics) process has a significant influence on organizational success. Reverse logistics is gradually becoming a source of competitive advantage for organizations, making it a strategic choice to pursue this role. Despite these advantages, industrial companies in Nigeria do not seem to have absorbed and embraced the notion. Starline Nigeria Limited is a Nigerian cosmetics manufacturer that also participates in reverse logistics. In order to capture value via creating value for customers and distributors return defective items as a consequence of leaks, damages, or breakages in transit via the company’s product distribution operations. Other items are returned for repackaging or remanufacturing, depending on the situation.

Even though it is frequently concealed, reverse logistics may result in large expenses but also give countless possibilities, and so may be considered an important feature and component of the supply chain (Horowitz, 2010). Many businesses do not believe reverse logistics to be a profitable supply chain technique. Furthermore, several obstacles or restrictions prevent many firms, such as Starline Nigeria Limited, from participating in reverse logistics operations (Zhang, 2010). Other organizations consider the approach to be disruptive. The cause of this issue is a lack of top management understanding and commitment to reverse logistics, as well as their inability to see the advantages of this supply chain technique (Azevendo, et. al., 2011). Because of poor client patronage and failure to please consumers, firms’ negligence may have a detrimental impact on their marketing performances.


1.2 Statement of Research Problem

Normally, every firm focuses on enhancing its forward logistics operations. Most companies have failed to pay comparable attention to reverse logistics as they have to forward logistics. Most industrial companies focus so much on forward logistics that they underestimate the relevance of reverse logistics operations and their ability to improve the organization’s and supply chain’s performance. For most businesses, reverse logistics is considered as a source of disruption, a cost center, and a potential source of customer satisfaction.

In the Nigerian context, very few studies have been conducted on reverse logistics practice. Some of these studies however focused on the nexus between reverse logistics and economic performance (Somuyiwa & Adebayo, 2014), environmental sustainability (Oko & Nkamnebe, 2013) and waste management (Bilqis, Sulaimon & Kayode, 2018). None of these studies linked reverse logistics to sales growth of manufacturing companies. It was therefore evident that there existed knowledge gap that needs to be filled through research. This study sought to help bridge this gap by determining the effect of reverse logistics practices on sales growth of Starline Nigeria Limited in Abia State.


1.3 Objectives of the Study

The main objective of the study is to examine the relationship between reverse logistics practices and sales growth of manufacturing firms in Nigeria using Starline Nigeria Limited, Abia State as case study

  1. To fully explain the concept of reverse logistics as it applies to manufacturing companies.
  2. To examine the importance of reverse logistics in boosting sales growth of Starline Nigeria Limited.
  3. To examine the effects of reverse logistics on the sales and growth of Starline Nigeria Limited.

1.4 Research Questions

  1. What is the concept of reverse logistics as it applies to manufacturing companies?
  2. What is the importance of reverse logistics in boosting sales growth of Starline Nigeria Limited?
  3. What are the effects of reverse logistics on the sales and growth of Starline Nigeria?

1.5 Hypothesis of the Study

The following null hypotheses were tested in this study;

  • Ho1: Remanufacturing does not have any significant effect on sales growth of Starline Nigeria Limited in Abia State
  • HO2: There is no significant effect of repackaging on sales growth of Starline Nigeria Limited in Abia State.

1.6 Significance of the Study

This study will be an addition to the academic world as it will be an addition to other works that have been conducted on reverse logistics. This study will also be helpful to Starline Nigeria Limited as it will aid them in understanding the importance and effects of using reverse logistics in the manufacturing process.


1.7 Scope of the Study

This study will only cover the effects of reverse logistics on the growth of sales in Starline Nigerian Limited. It will also take an in-depth look into the concept of reverse logistics as it applies to manufacturing companies. It will also look at the effects of using reverse logistics on the growth and sales of Starline Nigeria Limited.


1.7 Limitations of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.


1.9 Definition of Terms

Reverse Logistics:

Reverse logistics is for all operations related to the reuse of products and materials. It is “the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.

Growth:

The process of increasing in efficiency, clientele and all other sections an organization.

Sales:

The exchange of a commodity for money, in this case, the exchange of beauty commodities produced by Starline Nigeria Limited.


1.10 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five


Summary, Conclusion and Recommendations of the Study

5.1 Introduction

This chapter summarizes the findings on the reverse logistics practices and sales growth of manufacturing firms in Nigeria using Starline Nigeria Limited, Abia State as case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

The findings of the study shows that the firm practices reverse logistics in their operation and in terms of the manufacturing sector. All the firms in the study had established environmental management departments in their organization and this highlights the importance placed on the need of the firms to pursue environmental sustainability programs in their operations. In terms of the introduction of reverse logistics in these firms, the study found that the dominant factor that determines the adoption is the capacity of the firm’s process and capacity to initiate return process and also the capacity of the firms to have an elaborate disposal procedure.

The common reverse logistics practices in the firms are the reuse of materials, remanufacturing and recycling of its products. In adopting any of the above practices, the factors that influenced the choice include the type of material being handled by the firm and also the operational procedures adopted. The findings show that the common reuse practice being adapted by the firms is the returning of used products and packaging materials to suppliers and the use of renewable energy as a source of energy. In the case of remanufacture reverse logistic practice, the findings suggest that the practice was sparingly applied by the manufacturing firms in the study and involved establishment of a product warranty program, training of employees on repair and refurbishing and also setting up of warehousing and repair workshops in the country.

With regard to organisational performance, the findings revealed that there is a probability that adoption of reuse, recycling and recycling reverse logistics practices has a positive influence on organisational performance. The three variables were found to be significantly affecting the performance of the firm. Lastly, the model showed that an improvement in the quality of organisational performance was mainly due to a probable enhanced remanufacture reverse logistics practices of the manufacturing firms. Further, from the ANOVA statistics and the regression model it can be summarized that indeed adoption of the three reverse logistics practices positively affect the firms performance as measured by cost reduction and resultant increased profitability.


5.3 Conclusion

In line with the above findings, it can be concluded that manufacturing firms like Starline Nigeria Limited that adopt reverse logistics practices into their supply chain can reduce new raw materials usage, produce value-added products, and reduce total manufacturing cost which will translate to a significant and positive effect on their sales performance and competitive advantage. While many companies have yet to recognize the strategic potential of efficient reverse logistics, it is clear that the tide is beginning to turn. There is more interest in reverse logistics now than ever before. As customers’ returns are increase daily, firms are beginning to make serious investments in their reverse logistics systems and organizations . Although many view this strategic process as being a disturbance and distraction, but the neglect of this aspect of the firm’s logistics process may have some negative effect like loss of customers’ goodwill and patronage, and subsequentl y, loss of sales and profits. Definitely, reverse logistics will be one way that manufacturing organizations in Nigeria can reduce costs of materials and manufacturing, increase sales revenues, profits and customer service levels and help to obtain competitive advantage. To accomplish this task, metrics like blockchain that can enhance and measure various aspects of the reverse logistics process must be developed and implemented.


5.4 Recommendation

Thus the study recommends as follows:

  1. As the findings show that the adoption of the reverse logistics practices impacts on organizational sales performance, Starline Nigeria Limited should include reverse logistics in their strategic planning and create clear policies for it. Management of Starline Nigeria Limited should look at reverse logistics practice as a strategic method that can be used to boost marketing performance.
  2. Starline Nigeria Limited should invest in appropriate information technology like the modern blockchain technology. This will assist the firm to establish effective data collection system to improve the effectiveness of its reverse logistics processes. The firm can communicate and share information with its supply chain members regarding the collection and handling of customers’ product returns.
  3. Starline Nigeria Limited should consider outsourcing their reverse logistics function to a third-party logistics (3PL) organization, if it lacks the necessary expertise or knowledge on reverse logistics management.

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