Chapter 7: The Final Phase Research
7.4 Cross-Case Analysis
7.4.4 Processes in Reverse Logistics
Section 7.4.3 explained that even if businesses use precautionary measures, goods still accumulate in various categories in various volumes. The firms now need to have the capability of processing these goods in the most cost-effective way. This section will explain the capabilities the firms have developed for transporting/moving, warehousing/storing, and for sorting/selecting/ inspecting. This section will also explain how firms address/perceive the cost of going through these processes.
7.4.4.1 Transporting/Moving Goods
As shown in Table 7.20, all the firms knew that transporting the goods from one place to another, storing/warehousing, and sorting/selecting/inspecting were involved in the process of reversing logistics. For instance, for transporting/moving goods, Firm E said: ‘yes, I will have to take it back
to the wholesalers back to London, Manchester, Paris’ (Owner, Firm E). The owner of Firm B said
they need to transport/move the goods because: ‘these goods may need to be collected from the
customers, get it repaired, and again take it back to the customers using our vehicle’ (Owner,
Firm B). The owner of Firm C said the unwanted goods need to be transported/moved to the store because the store is not near and: ‘It’s a separate building at the rear, maybe around 200 metres’ (Owner, Firm C).
As explained in the above quotes and in Table 7.20, all of the companies had to get involved in carrying goods from one place to another for various reasons. Besides the businesses doing this themselves, supplier involvement is also seen in Firms A, B, C and F. Hence, the resources as supply chain relationship is used by some of the studied firms. Firms D and E carried the goods back to their suppliers, as their suppliers were not involved in carrying this for them.
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Transport/movement reasons To take the goods back to the supplier A, B, C, D, E,
To carry the goods in the store A, B, C, F
For own initiative take-back B
To deliver back to the consumers after repair or exchange B
Transport/movement done by Owner /supplier A, B, C, F
Owner D, E
Warehousing/storage reasons To store the damaged/expired goods till it’s taken back to
the supplier A, B, C, D, E, F
To store the wrong deliveries till it’s taken back to the supplier
A
To store the unsold and excess goods to sell next year B, C, D, E, F To store the goods that is to be taken away by scrap
people
B
To store the spare parts B
To give to charity E
Warehousing/storage done by Owner/supplier A A
Owner B, C, D, E, F
Sorting/selecting/Inspecting
reasons Before buying A, B, C, D, E, F
To check new deliveries A, B, C, D, E, F
After customer bring back A, B, C, D, E, F
To check the damaged/expired. A, B, C, D, E, F
To check the unsold excess A, B, C, D, E, F
Sorting/selecting/Inspecting done by
Owner/Supplier A, B, C
Owner D, E, F
Specialist Engineer B
Table 7.20 Processes Involved in Reverse Logistics
All the firms, however, mentioned that they do not travel to go to their supplier just for the sake of taking these goods back, but go there when they need to see their suppliers for their next purchase or pick up. This shows that firms are using measures to avoid the related costs. As the owner of Firm C said:
‘yes, as I said that suppliers will take this back, but sometimes when we have to go to the cash and carry we carry these goods and take these back to the supplier - only if they are local suppliers. I use my own car to do this.’ (Owner, Firm C)
This explains that there is no visible/known cost involved but firms use measures to avoid the cost. Firm B was the only company who was also involved in transporting the goods to the customers from the shop, and transporting it again from the customers back to the shop area.
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Firm B did this as this was related to their core business activity. This has required Firm B to own their own business van as a physical resource to build the capability required to RL.
7.4.4.2 Warehousing/Storing Goods
As explained in Table 7.20, all of the firms had to store goods in various categories for various reasons; hence, there was the need to build capability related to storing accumulated goods. Firms B, C, and F developed the capability of having a large separate storage area to store their piled-up goods, as they had been running the business for many years. Owner of Firm C said:
‘Actually, a lot of those goods I have back in the container and also in the store. Maybe I have goods since the last five years, some of it which is not sold, what can I do nothing. I have boxes of goods in the store.’ (Owner, Firm C)
This indicates that Firms B, C, and F have extra costs involved in storage, as they have invested in separate storage space. Firm D, who was a newly established business, did not have separate storage, but they bought small plastic boxes to store their unwanted goods which they had purchased separately. However, they revealed that the conditions might change, as the owner of Firm D said: ‘We do not need a store now, but maybe after some time we may need a store to
hold on these goods for some time, as the business grows…’ (Owner, Firm D). Firm A had a tiny
storage space at the back of their shop, and this was the only firm whose suppliers had set up a storage area for storing their unsold and excess newspapers and magazines, outside the shop area. As the owner of Firm A said:
‘We have been given a box where we can put all the unsold and excess goods in this box overnight and place this in the blue box outside which has been set up by our supplier.’ (Owner, Firm A).
This demonstrates that they are using the supply chain relationship as a resource for storing some of their goods. Whenever goods piled up, Firm E gave this to the charity as external resources. However, they stored their yearlong accumulation in bin bags, or in the loft of their shop, until it was given away to charity. This indicates that there was no substantial extra cost involved. Nevertheless, this practice helped to eliminate or reduce costs; however, there is an indication that they used the practice of ‘illegitimate behaviour’ as a capability to store these goods and, consequently, reduce/avoid these goods. As the owner of Firm E said: ‘we store the goods in the
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this without letting them know’ (Owner, Firm E). The use of ‘illegitimate behaviour’ as a resource
to build capability for reversing logistics is, again, another emerging theme in this study.
7.4.4.3 Sort/Select /Inspect /Test Goods
As explained in Table 7.20, all firms also required the capability to sort, select or inspect the goods for various reasons. For instance, the owner of Firm F said:
‘Yeah, either they remain unsold, get damaged, or come back from the customers, they all need to be checked and sorted to know the conditions of the goods, and to make the appropriate decisions on what to do with them.’ (Owner, Firm F)
Except Firm B, all companies did the sorting, selecting, and inspecting themselves. Company B hired a specialist engineer as an external resource to get this done for them, which was again a visible known cost, as the owner of Firm B said:
‘Yes, as I said that being the electronic nature of the goods, and also being the second- hand or used goods, they all need to be tested and sorted, as it is also in law that we have to make a PAT [portable appliance testing] test.’ (Owner, Firm B)
The firms have tried their best to reduce the cost of processing their goods by using resources like tacit knowledge gained from past experiences and supply chain relationships. As explained, for some firms, there are visible costs involved in processing these goods. However, invisible/unknown costs related to time and effort used by all firms for transportation, storage, and sorting/selecting/inspecting cannot be denied. The invisible/unknown costs related to time and effort were evidenced during the observation period. It was also found that in the course of saving costs, companies also used the practice of ‘illegitimate behaviour’ as a capability to process their goods.
7.4.5 Disposal Options
After processing of the goods, the studied businesses had to use capabilities in selecting the most suitable option for disposal of the goods. Overall, as explained in Table 7.21 and Table 7.22, it was found that the preferred disposal options were the ones which reflect the nature of the small sized businesses, who have limited resources of all types. Hence, chosen disposal options were the ones which they had knowledge of, that were readily available, that they thought would yield economic gain, and that had low or no investment. Consequently, these attributes were reflected in the type of capability they explored and developed in disposing their goods. Hence, the resources they used to build the disposal capability were the tacit knowledge gained from past
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experiences, supply chain relationships, time and effort, and external resources like other online channels and charitable organisations. In making economic savings or economic gain, the companies were also found to use the practices of ‘unethical behaviour’, ‘illegitimate behaviour’ and ‘informal behaviour’, which is hidden, but may pose serious consequences which will be explained in the paragraphs and quotes below.
If it is in the policy, the priority was to send the goods back to their suppliers because doing this would provide economic gain without any extra investment, as they get the compensation for doing this. For instance, the owner of Firm B said:
‘If it’s a new goods supplier, as we have some, we have some terms and conditions with them. The goods are provided with a one-year warranty and if anything goes wrong within this one-year warranty they deal with this. They either send the spare parts for repair or take the goods back and compensate us either with credit note or exchange this with new goods.’ (Owner, Firm B)
In other cases, the most preferred options were to reduce the price of the goods, move the goods from one display area to another, sell the customer returned goods as new, and directly reuse the goods for personal or business use. These options were either readily available or involved low/no cost. For instance, the owner of Firm D said: ‘What we do is if there is some product lying there
for some time, we try to put this out in the front, make it visible to people, as in doing so there is no extra investment’ (Owner, Firm D). On directly reusing the product, the owner of Firm C said:
‘if the food comes out of the packet then we eat it, but if they are expired then we do not eat it, or
may be if the mouse has damaged or eaten then we do not use this.’ (Owner, Firm C).
Directly using the products either for personal use, office use, or friends and family use is another strongly emerging theme.
All the firms reduced the price if the product was defective. The common reason for doing this was economic gain. For instance, Firm E said: ‘Simply for return on investment isn’t it. We will, at
least get, not all, but some of our money back.’ (Owner, Firm E). All the firms also sold the goods
‘as new’, which came back from the customers. There was no extra capability involved, apart from tacit knowledge gained from past experiences on how to get this done, and they said that they do this for economic gain.
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Reasons for Firms Using the Various Disposal Options
Firms send unsold and excess goods back to the suppliers because they have this in their policy and they
do this for compensation (economic saving) A, C
Firms send back the unsold and excess goods back to the suppliers even if it is not in the policy because the suppliers are big companies
C Firms send back their damaged/broken/faulty/expired goods to the suppliers to get compensation from the suppliers (economic saving)
A, B, C, D, E, F
Firms throw their goods in bin because suppliers do not take it A, B, C, F
Firms throw their goods in bin because suppliers are discontinued, and they do not take it E, F
Firms throw their goods in bin because the goods get outdated A, C
Firms throw their goods in bin because they are damaged and faulty E, F
Firms throw their goods in bin because they are small in volume A, B
Firms throw their goods in the bin if they do not have economic value B, C
Firms throw their goods in bin if they can’t be repaired C
Firms throw their goods in bin if they do not have time to repair A
Firms throw their goods in bin if they are not fit to keep A
Firms throw their goods in bin as a last option A
Firms throw their goods in bin because government does not help C
Firms throw their goods in bin if they are anything other than Metal C
Firms repackage and resell the goods for economic gain A, C
Firms repackage and resell the goods if the suppliers do not take it back A, C
Firms repair and refurbish because repairing is related to the core business aspect; B
Firms do minor repairing & refurbishing for economic gain A, B, C, D
Firms do minor repairing & refurbishing because suppliers do not take back D
Firms do minor repairing & refurbishing because of Core business aspect; Warranty Repair; Damaged broken
B Firms give away their goods to the recyclers and dismantlers if goods do not have economic Value, and, if this results in economic savings
B
Firms sell the goods brought back by the customers as new for economic gain A, B, C, D, E, F
Firms sell the goods brought back by the customers as new for economic gain A, B, C, D, E, F
Firms directly use some of the goods that are damaged, or unsold & excess if they can be used for personal use
A, C, F Firms directly use some of the goods that are damaged, or unsold & excess if they still got economic value A, B, C, D, F Firms directly use some of the goods that are damaged, or unsold & excess if they can be used for business
use B, C, F
Firms directly use some of the goods that are damaged, or unsold & excess to give away to friends and family for social recognition
A, B, C, D, F
Firms sell their goods by reducing its price for economic gain purpose A, B, C, D, E, F
Firms sell their goods by reducing its price because of the nature pf the product (they get obsolete or expired)
A, B, C, D, E, F
Firms sell their goods using outlets like eBay and Gumtree for economic gain B
Firms sell their goods using outlets like Facebook and website for economic gain D
Firms gave away their goods to the charity because they have no extra storage E
Firms gave away their goods to the charity because there is economic gain (tax rebate) E Firms use the technique of cannibalisation to manage the accumulation for economic gain D, E Firms try selling the goods by changing their display area because this enhances viewing and creates economic gain
A, B, C, D, E
Firms believe government should help them in tackling these goods C
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One of the most common reasons for selling the customer returned products as new, as said by the owner of Firm C, was because there was no problem found in the goods. ‘Once I know that
the product is fit to sell as new then only I sell these as new. If there is no problem found in the product it is always goods to sell as new and this is how we do business.’ (Owner, Firm C).
Firm B was the only company to have goods tested by a certified engineer before they sold the goods as new. However, other business did not do this using an expert, but did this themselves, and this was because they did not require expert testing by law. However, there could be some ethical issues in selling the goods as new, which has been returned by customers. Hence, the practice of ‘unethical behaviour’, as a capability, was found to be used for disposing the returns, which is another strongly emerging theme for this study. Firm F, who dealt with electrical and electronic goods, were more hesitant to use the option of ‘sale as new’, due to the nature of the goods as the owner of Firm F said: ‘customer returned goods may have some defect on it which
may pose a health risk, and therefore can’t be sold as new’ (Owner, Firm F). Firm B was the only
firm who fully utilised the repairing and refurbishing option, as this was related to the core activity of their business which was again due to economic reasons. The owner of Firm B said:
‘Actually, apart from buying new goods, buying used or second-hand goods or buying the dented or scratched goods is the nature of our business. We must deal with these goods. As we buy these goods to repair/refurbish and then sell this for profit.’ (Owner, Firm B)
The availability of the other options, and not having resources, were the most common reasons for other firms for not using this option. However, there was the case of not heavy, but minor repairing or refurbishing in Firms A, B, C, and D. The common reason for doing this in these companies was for economic gain and economic saving, as these were low or no cost options.
Firm B was the only company who gave away their unwanted appliances to the metal scrap people. Products which they believed had no economic value would be given away to the scrap people, but they also did this to save money. The owner of Firm B said:
‘to throw it in the bin costs money as well - you get bills. To pay the bills why should we throw it away or give to the recycle company to pay the bills? Why should we pay the bills, to pay the bill for the bin or the recycle company, so we give it to the scrap people who collect for free…’ (Owner, Firm B)
During the interview, it was also revealed that these scrap people would extract the metal from these products and sell for profit. However, the owner of Firm B said that these people handle these materials informally:
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‘….they say these contain harmful chemicals, which should only be handled by an expert. But what can I do? I have no choice’ (Owner, Firm B)
This demonstrates that the practice of ‘informality’ is used as a resource to build capability to manage their unwanted goods. This is yet another strongly emerging theme for this study.
Firm E was the only company who gave away their years’ accumulation to charity as external resources. They gave unsold and excess goods to charity because they had no extra storage space to store these yearlong accumulations, and they also said they do this for economic