Ethics and Information Security in Reverse Logistics

7 pages
1888 words
Boston College
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Research paper
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Ethics, with respect to business settings, refers to the moral principles that guide the behavior of businesses in their everyday dealings. On the other hand, reverse logistics revolves around the recovery of products; it is a big business, and it brings about challenging moral and ethical questions to business owners. For example, the work of Professor John Cullens work at the University of Sheffield shows that up to a quarter of goods can be returned by end users with UK retail returns worth an approximate 6 billion Euros. Clothes bought from the internet and footwear purchases that do not fit as well as substandard goods are returned to the stores they were bought from. It is a very humbling experience for anyone business, and it is always upon the management and operatives to take things positively. Managing returns from unsatisfied customers is the reason for added costs which come in the name of disposal and inventory. Whats more, it is worth mentioning that sometimes the consumers return products to companies that sourced the said products from supply chains built on a number of tiers of supplier every one of them characterized by varying instances of informality or formality. This paper will give invaluable insights regarding the link between customer retention and reverse logistics and how they are in need of ethics to become successful.

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Ethics and Reverse Logistics

Reverse logistics as a process expects the companies involved to respect the wants of customers and the community at large; it is a subset of Corporate Social Responsibility. As before mentioned, the type of CSR mentioned above requires manufacturing firms to be wholeheartedly take back defective products from consumers and arrange for its shipping, testing, dismantling, recycling, repairing, or getting rid of the product all the same. The commodity would travel in reverse by means of the supply chain network so as to retain any use from the ruined product.

In that sense, reverse logistics is not only about choice, but it also plays an integral part in the supply chain as forward logistics is. Ethics is an integral part of the process if at all the business in question wants to maintain its customers and its reputation. In the long run, if communication and the back-channeling of products are successful, positive returns can be realized if the product is sold again; this brings about a good experience with the customers, and this makes them come back. Despite that, there is a relatively high cost incurred in conducting reverse logistics by the e-commerce company at the micro level when it reaches the macro-level there is an inevitable need for the continued existence of the e-commerce. Need for it to work for the advantage of the logistics company and create a sense of confidence for the customers to buy products without considering the fearing there would be another compromise on quality. Reverse logistics goes a long way in the process of building the customers confidence because it is the true test of the management that runs the company involved.

It is almost impossible to ignore reverse logistics when it comes to e-commerce. The relevance of online categories of products became more apparent in the past few years creating the importance of setting up a reverse logistics process as part of e-commerce logistics strategy which has also been on the rise. It is surprising that the returns are three to four times much more expensive than the forward shipments once proper repairs are done. The costs and the level of efficiency of the reverse logistics are demanding, and some e-commerce companies do not place their focus on them in the beginning. When the challenge of reverse logistics and information ethics becomes intense and leads to a drain on the growth and profitability of the e-com companies, this now spurs more attention on the people. As it is perceived by many end users and managers, reverse logistics isnt inefficient but rather becomes inefficient when the parties involved lack the focus of it in the beginning. For any supply chain, the strength of the supply chain is the most delicate facto and any ignorance in focusing on the returns alongside the forward fulfillment makes it the weakest link and ends up bringing down the strength of the whole chain involved and brand at large. Companies that use online platforms to sell their products thus need to take care of customers and never turn down a complaint on quality no matter how trivial.

The current trends in reverse logistics have opened opportunities for businesses and have created a window of managing and creating good customers relations and in building customer loyalty to the available brand names. Regarding the level of credibility and the loyalty of customers to the retailers, e-commerce that deals with the retail of tangible goods cannot work without the support of reverse logistics. The absence of reverse logistics is more or less like a blocker for the online customers willing to buy from e-sellers who are owing to the low trust factor. Although reverse logistics may be an expensive means to forward logistics, it is a great investment opportunity in building the company through trust and reputation among the customers. This helps customers to build confidence from where the purchase is coming from and hence product satisfaction. Logistics are important as they create an ease of returning the products to the sellers from the comfort of their home helps as a means of gaining confidence and delighting in them. E-commerce companies accept return within the specified period of time. Most e-commerce companies are looking for the third parties logistics providers or specialists to provide support systems in reverse logistics. The decisions are mainly based on whoever is in charge of running the operations of the warehouse, the services offered by the company and the number and the rate of growth returns of the e-commerce company (Gunasekaran, & Ngai, 2003). The services offered to act as a guide to streamline the returns process rather than making it difficult for the operations side of the warehouse. Most consumers believe that outsourcing has a better return to the specialists that deal with enhancing the experience of the customers by adding a track and a trace component that in the end lowers the management cost of the e-commerce company.

Processes involved in reverse logistics

The flow of reverse logistics is aligned in different steps which entail a logical flow as stated below.

Taking off the return requests from the customers through an online platform or a customer care center that has been set up.

Product pick up center for the customers

Quality check for the post pick up.

Acceptance of the returned product by the seller

The logicality in the flow of the products of returns entails moving the products back through the forward logistics process.

Although the process entails more complexities and procedures. The dynamics involved entail product and process expertise that will be able to leverage the best values for the assets involved within the shortest time possible, this leads to the best profit opportunity for the reverse logistics in the operations of e-commerce. There are two parts involved in the operations. Firstly, there is a quick connect back to the retailer this will be sorting, accounting for the failures, and evaluation of the failures so as to reduce the occurrence of the same in the near future. Secondly, there is need to relate to the realization of the returns. The realization of the return entails servicing of the repairs and the secondary market for the corporate social responsibility purpose and ascertaining the salvage value.

Information Security and Reverse Logistics

It is of importance that all customer information regarding complaints and requests to the seller are kept confidential. Information security in the course of reverse logistics affects three parties and these include the manufacturer of the product, the e-commerce company, the suppliers involved, and even the unsatisfied customer. Reverse logistics is a process that requires careful information management; the information systems involved the internet of things, and the human parties involved need to conduct themselves ethically. Ethics ought to apply in information and reverse logistics because a failure to do so would mean the management, the economics, and the technology of reverse logistics would fail.

Role of 3PL and Ethics in Information Security and Reverse Logistics

E-commerce companies look forward to third party logistics service providers for the provision of support for the reverse logistics. In the dealings that these companies have with their service providers, ethics is an important component if at all business will flow smoothly. The emergence of reverse logistics in e-commerce business makes the role of the 3PL known; this is a sign of an e-fulfilment to the service providers and unsatisfied customers at large. If an individual outsources the logistics necessities to a supplier, this is termed as the intermediary logistics benefactor (Subramani, & Walden, 2011). Some of the rudimentary strong points of the e-commerce prototype is that the participants get a chance to execute parts that they tend to specialize in. For this reason, subcontracting to an intermediary logistics group is appropriate with the ecosystem of e-commerce.

The 3PL takes care of all the requirements of reverse logistics. These services entail;

Supply chain supervision

Supply chain that is well- oiled is equivalent to the success of an e-commerce business. For any reason, if the incoming cargo supply necessities are well taken care of, the there is a noble job performance of the 3PL.

Consolidation service

Most e-commerce merchants direct numerous small commodities to the similar site. This occurs in situations where the entire can be fewer than the amount of the shares. This means that if a business consolidates wholly the small merchandises into one consignment, the charges of shipping could be lowered substantially. This is one of the services that is entailed in the third party logistics provider.


Although e-commerce merchant may not have a store to walk into, physical goods need to be stored at some specific location. For this reason, a 3PL takes care of the warehousing requirements. It takes the time to invest in the space and any form of technology that is required for the efficient running of the warehouse.

Order fulfilment

In case an e-commerce hasnt fulfilled its commitment to order, then there is nothing that has been done. Fulfillment of an order not only entails ensuring that the merchandises are received by the customer but rather making sure the right goods gets to the designated client (Dekker, 2013). Thus, a decent third party logistics provision takes care of the requirements of the order fulfilments.


Suppleness, scalability, and relevance happen to be one of the major reasons for e-commerce and the reverse logistics. Not all e-commerce businesses operate on a larger platform, a number of them have to begin from scratch. This is because setting up an individual logistics system may require a lot of fixed expenses. Thus the Logistics provider gives a business the suppleness of beginning small.

The efficiency of specialization. This is another reason for the e-commerce to opt for the logistics. An individual who is respectable at vending to their customers should maximize their energy inefficiency and specialization. When one specializes in their function, they end up being efficient in it.

Technology. Just like all the competitive spheres of commercial, logistics keep on evolving with time. There is a consistent upg...

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