Revealing an invisible giant: A comprehensive survey into return practices within original (closed-loop) supply chains

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 manufacturers/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.

► The average total volume of returns handled by original supply chain actors over the life cycle adds up to 90% of the number of products sold.
► Most value is lost by returns early in the life cycle.
► Companies increasingly recognize end-of-use and end-of-life returns as value creators.
► Many inefficiencies exist in collection, reverse logistics, and recovery operations as a result of a patchwork of return channels.
► The resemblance between regions and industries is increasing.