An Integrated Information Systems Framework for Enhancing Reverse Logistics Performance in Supply Chains

Abstract

The main objective of the current study is to establish a well-rounded Information System (IS) integrated framework which can enhance reverse logistics (RL) performance in supply chains. Reverse logistics is a vital domain in supply chains and of late has been gaining a lot of researcher’s and practitioner’s attention. The organization’s emphasis has gradually shifted from the forward supply chain to the reverse chain because of its ability to generate competitive benefits. Although information and communication technologies supposedly have a positive effect on performance, literature has reported a mixed-bag effect. Hence, it becomes vital to study the role of information technology (specifically information systems) in enhancing RL performance by establishing a well-rounded framework. With RL being affected by other factors as well such as formalised RL processes, government regulations, frequency of product returns, strategic management focus and resource commitment to RL, it becomes important to analyze their effects in the reverse supply chain context as well. This study, through an extant review of supply chain literature, identified a set of IS and non-IS constructs which lead to an increase in RL performance. After identifying the constructs, possible relationships have been established between the variables and an IS-integrated conceptual framework has been proposed along with the corresponding hypotheses. A questionnaire was developed using the existing scales from the supply chain literature and was circulated to respondents in industries where reverse logistic operations are prevalent. The sampling technique used was a combination of convenience and snowball sampling and the prospective respondents were top / middle management executives in the supply chain / logistics / operations / purchasing / IT / IS domain. The survey instrument was pilot tested in two phases to establish reliability and content validity. The data collected was subjected to confirmatory factor analysis (CFA) to create the measurement model and to establish goodness-of-fit. Convergent and discriminant validity was established and except for two constructs which could not be discriminated, others were found to be within the established norms to be convergent and discriminant. Structural Equation Modeling (SEM) was run on the measurement model to prove direct, mediating and moderating hypotheses and mixed results found. With respect to direct relationships between IS framework constructs and RL performance, all except IS for logistical operations were found to be significant. The analysis of relationships between the independent factors (formalized processes, government regulations and strategic focus) and the IS framework constructs indicated that formalized processes has a significant impact on all IS variables and the greatest impact on IS partnership quality. With respect to the government regulations, it was observed that the construct had a significant impact on IS for value creation and IS capability. However, the relationships with the other two constructs were found to be insignificant. The results also showcase that strategic focus on reverse logistics tends to have a positive impact on all IS framework constructs, except IS for logistics. With regards to mediation effects, results indicate that all IS framework constructs except IS for logistical operations completely mediates the impact of formalized processes on RL performance. With respect to government regulations, only IS for value creation was found to completely mediate the impact of government regulations on RL performance. The mediation results also indicate that all IS constructs except IS for logistics partially mediates the impact of RL strategic focus on RL performance. With regards to the moderating effects, it was proved that although both return frequency and resource commitment moderate the impacts of IS constructs on RL performance, resource commitment is supposed to have a stronger effect as compared to return frequency.