Investigating the effect of disposition options of reverse logistics on sustainability performance in the Australian manufacturing industry

The growth of manufacturing activities has contributed to the use of more resources and rising environmental concerns because of increasing waste generated during production and consumption. Reverse logistics (RL) can reduce waste by choosing appropriate disposition options for returned and used products. Product disposition is a key component of the RL process. The main aim of this research is to investigate the impact of RL disposition options on the perceived triple-bottom-line sustainability performance of a firm.

A comprehensive review of literature reveals that there are limited empirical studies to explore the relationship between RL and sustainability performance and social performance of RL has been largely neglected. Some studies examined RL from the perspective of GSCM. When RL is investigated in the context of GSCM, it is compared to other green practices and more attention is paid to its environmental performance. Most of the studies examined RL without considering disposition options. Majority of the previous studies have been conducted in developing countries, less attention is paid to developed countries. The target population of this study was manufacturing firms in Australia due to the importance of RL in this industry. Three sectors were chosen for the study including "Machinery and Equipment Manufacturing" "Transport Equipment Manufacturing" and "Furniture Manufacturing".

This research decomposes RL into five commonly adopted disposition options including reuse, repair, remanufacturing, recycling, and disposal. Also, this research investigates how institutional pressures and resource commitment as external and internal factors can impact the adoption of RL and perceived sustainability performance of firms. This research conducted an online questionnaire survey to collect data. The data of 120 survey responses were analysed using confirmatory factor analysis (CFA) and structural equation modelling (SEM) to answer the research questions. This research also examined the differences among respondents regarding the adoption of RL and their perceptions of sustainability performance using the analysis of variance (ANOVA). This research explored the level of RL implementation and how sustainability performance was perceived in the context of RL in the Australian manufacturing industry.

The research concludes that RL is a relatively new practice in Australia as the level of its implementation is medium. The most adopted disposition options are repair and disposal, while reuse is the lowest adopted option. Among the three dimensions of sustainability performance, social performance has the most contribution to sustainability performance while economic performance is identified as the weakest construct. Regarding the impact of RL disposition options on the perceived sustainability performance of firms in the Australian manufacturing industry, the results of this study show that all disposition options affect sustainability performance except for remanufacturing. Moreover, the results confirm the significant role of resource commitment in the adoption of RL and sustainability performance. In relation to institutional pressures, in the context of Australia, it does not significantly contribute to companies's decision to implementing RL although institutional pressures can positively affect sustainability performance.

This study offers a clear understanding of the current situation of RL implementation in the Australian manufacturing industry. One of the major barriers to RL implementation is a lack of awareness of RL and its benefits. Therefore, the research outcomes will contribute to the increase of organisations' awareness about how RL benefits sustainability, which can affect organisations' attitudes toward RL implementation. The research provides empirical evidence on the business value of RL implementation in improving sustainability performance through choosing the appropriate RL disposition option for the business.