JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.

1, 2001 107

REVERSE LOGISTICS: THE RELATIONSHIP BETWEEN

RESOURCE COMMITMENT AND PROGRAM PERFORMANCE

by

Patricia J. Daugherty

Chad W. Autry
The University of Oklahoma

and

Alexander E. Ellinger
Villanova University

Reverse logistics is fast becoming a competitive necessity. More liberal returns policies, the
increasing use of consignment inventory, shorter product lifecycles, and more demanding cus-
tomers translate to more returned product.1 Firms are being forced to find more efficient ways to reclaim,
redistribute, and/or dispose of returns. Firms that do not recognize the importance of an effective reverse
logistics program risk damaging customer relations and may seriously harm the organization’s
reputation and brand image.2
The trend toward more direct-to-consumer marketing and retailing also impacts reverse logis-
tics, as does the exponential surge in Internet retailing. Non-traditional retailing is typically subject
to higher rates of returned merchandise than in-store shopping. For example, it is estimated that returns
for direct sales catalog companies can run as high as 20% of sales.3 The necessity of dealing with such
volumes of returned product has led catalog retailers to focus efforts at more efficient returns han-
dling. Rogers and Tibben-Lembke4 suggest that some catalog retailers are at the forefront of best prac-
tice reverse logistics. Because of their history of dealing with returns and their purported expertise
in reverse logistics, catalog retailers were selected as the focus for the current research project.
Reverse logistics programs are resource intensive in terms of implementation and mainte-
nance. Significant time and resources must be committed. However, there is little empirical work exam-
ining the relationship between allocating resources to reverse logistics and reverse logistics program
performance. Reluctance to devote managerial and financial resources is a barrier to the development
of effective reverse logistics programs.5 Is there a payoff in terms of financial and/or service performance
for firms that devote more resources to reverse logistics? The current research was undertaken to assess
the effectiveness of reverse logistics programs and to gauge their impact on business operations.
108 DAUGHERTY, AUTRY, AND ELLINGER

The research focused more on value reclamation aspects of reverse logistics (reclaiming unsold or
damaged product, for example) rather than recycling or environmental issues.

Reverse Logistics Programs

Reverse logistics refers to:
The process of planning, implementing and controlling the efficient, cost-
effective flow of raw materials, in-process inventory, finished goods and related
information from point of consumption to the point of origin for the purpose of
recapturing value or for proper disposal.6
Reverse logistics has received more attention in recent years because of its strategic implica-
tions. A well managed reverse logistics program can result in savings in inventory carrying,
transportation, and waste disposal costs 7 as well as improving customer service.8 Environ-
mental and “corporate citizenship” goals also have influenced program development.9 For example,
stringent governmental legislation on disposal of products,10 public awareness of the social cost of
excess waste,11 and growing support for recycling12 have all contributed to expand firms’involvement
in reverse logistics.
Returns are, and always have been, a fundamental part of retailing. It is estimated that reverse
logistics accounts for 5-6% of total logistics costs in the retail and manufacturing sectors.13 Routine
reverse logistics activities in the retail sector include handling recalls (product defects), exchanges
(customer dissatisfaction or indecision), returns (damage), re-distributions (seasonal and excess
inventory), and trade-ins, as well as the disposal of shipping containers and the collection of prod-
uct and materials for recycling. Considerable payoff in terms of performance-based outcomes is
believed to be associated with effective reverse logistics programs.
Better customer service, improved customer satisfaction, increased control of inventory,
reduced costs, higher profitability, and enhancement of corporate image have all been identified as
potential benefits that may accrue to firms with effective reverse logistics programs.14 Reverse logis-
tics programs also offer firms the opportunity to collect valuable information.15 Data may facilitate
the identification of patterns of defects or problem areas, and thus, can be used to reduce the volume
of returns. In addition, reverse logistics programs can improve overall customer service and customer
relations by helping to ensure that returns are processed quickly.16
BMG, a catalog retailer that offers its customers a music membership service, provides an illus-
tration of how a successful reverse logistics program can contribute to company performance. BMG
exploits its reverse logistics capabilities to positively impact customer service and inventory control.
Returns are standard business for BMG. On average, the firm receives approximately 80,000
returned packages on Mondays and about 40,000 on other weekdays. Reasons for returns include wrong
product sent, wrong addresses, and customers simply changing their minds about the purchase.
Because the nature of mail-order music business is such that returns are expected, BMG facilitates
returns by planning for them at the time of original sale. Unique bar code labels are affixed to the
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 109

customer’s invoice as well as the product itself at the time of sale. The identifying label that is
scanned when the product is shipped from the distribution center can also be scanned if the product
comes back.
BMG’s system is set up to speed handling of returned merchandise. An automated conveyor-
based system sorts approximately 57,000 items in an eight-hour period. The process prioritizes
popular or faster-moving selections so that they can rapidly be returned to inventory. Typically,
customers’ accounts are credited and usable product is back in inventory within eight hours of the
time that the return is received.17
Despite the positive economic and customer service benefits that may result from committing
resources to a proactive reverse logistics program, too many firms apply minimal effort to the area.18
Firms’traditional preoccupation with outbound logistics and desires to “hide” inventory mistakes are
suggested as potential reasons for reluctance to commit resources to reverse logistics.19 Another
explanation may be that a lack of awareness of the magnitude of potential benefits serves to limit
allocation of resources to reverse logistics. Thus, empirical research on the effect of reverse logis-
tics on performance is needed to provide greater understanding.20 The resource-based theory of the
firm21 provides a theoretical framework to examine the impact of resource commitment on reverse
logistics program performance.

Resource-Based Theory
Many firms are focusing on the innovative utilization of logistical resources in the supply
chain to create and add value for customers.22 However, despite recent advances in the field of
strategic logistics research, further theoretical development remains a key priority.23 For example, the
lack of a theoretically grounded view of reverse logistics represents a “critical gap.”24 The resource-
based theory of the firm has significant potential for logistics research,25 and for assessing the impact
of investment in reverse logistics on program performance.
Resource-based theory suggests that differences in firms’ strategic resources are causally
related to differences in product or service attributes, and thus, to competitive advantages and dif-
ferences in performance.26 Strategic resources are those firm-specific resources that are valuable, scarce,
and imperfectly imitable, and that provide a disproportionate contribution to perceived customer value.27
Firms are viewed as bundles of resources,28 which include all inputs that allow a firm to operate and
implement its strategies.29 Firm resources can be tangible or intangible, and may be developed
inside the firm or acquired in the market.30 The literature presents various classifications of resources
which can be summarized as input factors, assets, and capabilities or competencies.31
Input factors are generic resources that can be acquired in the market. Reverse logistics program
input factors include raw materials and components (e.g., automated material handling equipment,
labeling compliance/barcoding equipment, and radio frequency technology) and raw skills (unload-
ing skills, order processing skills, and computer/telephone operator skills). Input factors are trans-
formed to become part of the firm’s assets or capabilities/competencies.
110 DAUGHERTY, AUTRY, AND ELLINGER

Assets are stocks of available factors that are owned or controlled by the firm.32 Reverse
logistics program-related assets include computerized returns management and tracking systems,
electronic data interchange operations, and centralized returns centers.
Capabilities are complex bundles of skills, assets, and accumulated knowledge exercised
through organizational processes, that enable firms to coordinate activities and make use of their
resources.33 An example of a firm that utilizes its resources and accumulated knowledge to differentiate
itself on reverse logistics capabilities is Federal Express.34 “NetReturn,” FedEx’s returns-manage-
ment system, relies on the Internet to capture customer information, schedule pick-ups, arrange trans-
portation, and track the status of returned goods. A customer simply has to call the supplier and request
a return authorization. Once the supplier transmits the shipment details, the information system
takes over. It even reminds the supplier to follow up when goods are not picked up as scheduled.
A key difference between assets and capabilities is that assets are related to “having” while capa-
bilities are related to “doing”, making them less visible.35 Capabilities also differ from other firm
resources because they are enhanced by use.36 The more a capability is utilized, the more it can be refined
and the more sophisticated and difficult to imitate it becomes. Thus, as indicated by the BMG
and Federal Express examples, the commitment of inputs and assets, i.e., resources to build
reverse logistics capabilities, has the potential to add significant value for customers via service
differentiation.

RESEARCH QUESTIONS
In the context of the current research, resource-based theory suggests that differences in reverse
logistics program performance may be explained by firms’ commitment of resources to the devel-
opment of reverse logistics capabilities. With reverse logistics, as with most business operations, a
wide range of resources may be employed, ranging from information to location-related resources.
Examination of the full range of resources needed is beyond the scope of the current research
project. The decision was made to focus on two types of resource commitment: managerial and
financial. The development of reverse logistics capabilities relies upon a combination of intangible
(managerial and temporal) and tangible (financial) resource commitment.
This study seeks to develop a better understanding of the relationships between firms’commitment
of management and financial resources to reverse logistics and performance in achieving specific
reverse logistics program objectives, as well as the association between the achievement of specific
reverse logistics program objectives and overall effectiveness of reverse logistics programs. Figure 1
presents a conceptual overview of the relationships under examination.
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 111

FIGURE 1

THE RELATIONSHIP BETWEEN RESOURCE COMMITMENT

TO REVERSE LOGISTICS AND REVERSE LOGISTICS PROGRAM
PERFORMANCE — A RESOURCE-BASED VIEW

Research Question 1-a: Is management resource commitment to reverse logistics associ-

ated with the attainment of specific reverse logistics program objectives?
Research Question 1-b: Is financial resource commitment to reverse logistics associated
with the attainment of specific reverse logistics program objectives?
Research Question 2: Is the achievement of specific reverse logistics program objectives
associated with overall reverse logistics program effectiveness?

RESEARCH METHODOLOGY
Following a review of the literature and interviews with logistics professionals knowledgeable
about reverse logistics, a questionnaire was developed. The survey instrument was pre-tested with
eight people and modified based on their input. A commercial mailing list of 212 catalog retailers
selling electronics products was purchased, and questionnaires were mailed to these firms. Reminder
cards were mailed to non-respondents after two weeks.
A total of 81 completed surveys were returned, of which ten were unusable due to excessive miss-
ing values. Analysis centered on the 71 usable responses. The most commonly represented industry
segments in the respondent base include: computer and office equipment (58.6%), miscellaneous
electronics (25.1%), communications equipment (7.1%), and household appliances (4.3%).
Average annual sales volume for the respondent firms was $33 million.
112 DAUGHERTY, AUTRY, AND ELLINGER

Analysis of non-response bias was performed by comparing early versus late responses as
recommended by Armstrong and Overton.37 Responses from the last quartile of respondents (those
considered to be most similar to non-respondents) were compared to responses provided by the first
three quartiles of respondents. The comparison of group mean responses to survey items revealed no
significant differences (at p < .05) for the variables analyzed. Therefore, non-response bias was not
considered to be a problem.

RESULTS AND DISCUSSION

The research findings present a profile of reverse logistics operations as well as respondents’
perceptions of their firms’reverse logistics program success to date. Respondents indicated that, on
average, reverse logistics costs account for 9.49% of their firms’total logistics costs. This is considerably
higher than the benchmark of 5-6% of total logistics costs in the retail and manufacturing sectors
suggested by Raimer.38 Thus, reverse logistics should be a critical issue for catalog retailers selling
electronics products. Respondents’annual percentage of dollar sales handled as returns ranges from
1% to 85% with a mean of 10.28% and standard deviation of 10.2%. The annual percentage of unit
volume handled as returns ranges from 1% to 70% with a mean of 9.71% and standard deviation of
9.6%. These figures offer further proof of the considerable volume of returned product handled by
the firms under examination.

Reasons for Merchandise Returns

Details in Table 1 are self-reported. While the categories may not be entirely mutually exclu-
sive, they do reflect the magnitude of differences. Furthermore, it is anticipated that the percentages
of returns for all reasons are variable, depending on the specific types of electronics goods purchased
within categories, i.e., there may be more returns for CD players than cassette decks, or more returns
for zip drives than laser printers, etc.
Survey responses indicate that merchandise is primarily returned for one of two reasons. The
most common reasons for product returns are customer dissatisfaction (32.16%) and defective mer-
chandise (26.05%). Other common reasons for returns include receipt of an incorrect item (10.44%),
needed repairs (8.27%), or receipt of damaged goods (7.10%). These results indicate that although
a considerable proportion of returns can be attributed to consumer taste and normal product wear —
problems which are to be expected to some degree — a significant portion of returns are inflicted within
the supply chain delivery process. In combination, defective, damaged, and/or incorrect merchan-
dise shipped to consumers account for over 40% of all returns, and are problems that could be sig-
nificantly decreased with more efficient distribution and tighter quality control. The elimination of
such mistakes could represent a significant reduction in total logistics costs and would also serve to
enhance retailers’ reputations for service quality.
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 113

TABLE 1

MOST COMMON REASONS FOR MERCHANDISE RETURNS

Reason Percentage
Customer return/dissatisfaction 32.16
Defective merchandise 26.05
Incorrect item received 10.44
Repairs needed 8.27
Damaged 7.10
Unsold units 1.35
Reconditioning 0.80
Recycling 0.67
Product recall 0.64
Other 8.50

Methods of Product Disposition

A profile of the most common methods of product disposal is provided in Table 2. Nearly half
(45.35%) of all product returned to the catalog retailers is subsequently returned to the manufacturer
or supplier. Another significant portion of returned items (18.01%) is repackaged by the retailer and
sold as new. Other methods of disposition used fairly often include destroying the product (11.64%),
refurbishment for eventual resale (7.82%), and reselling of product “as is” (6.82%). While close to
half of the “problem” items are shifted back up the supply chain to the manufacturer or supplier, the
retailer still shoulders the responsibility for the disposition of a significant portion of the returned items.
Manufacturers often provide return allowances that limit the volume returned. Though the amount
of the allowance varies by product type and from agreement to agreement, allowances serve to shift
the burden of returns downstream within the channel (to the catalog retailer in the current setting).
The additional handling of returned product is time, labor, and resource intensive, distracts the firm
from its usual operations, and disrupts standard product flows.
114 DAUGHERTY, AUTRY, AND ELLINGER

TABLE 2

MOST COMMON METHODS OF PRODUCT DISPOSITION

Method Percentage
Returned to manufacturer/supplier 45.35
Repackaged and sold as new 18.01
Destroyed 11.64
Refurbished 7.82
Resold as is 6.82
Recycled 3.42
Donated 1.32
Sold at outlet store 0.95
Sold to broker 0.44
Sent to central processing facility 0.42
Other 0.06

Commitment to Reverse Logistics Programs

The resource-based theory of the firm suggests that resource commitment to reverse logistics
and reverse logistics program performance will be positively related. Therefore, respondents were
asked to evaluate the extent to which their firms make management and financial resource commitments
to reverse logistics. A 7-point scale was used with 1 = little commitment and 7 = substantial com-
mitment. Means and standard deviations for the measures are reported in Table 3. The respondents’
overall mean score for management resource commitment (4.83) was higher than that for financial
resource commitment (4.08). However, these relatively modest levels of resource commitment may
indicate that respondents are either still in early stages of reverse logistics program development and/or
that the programs are evolutionary by nature. In the latter case, a phased development may be the norm.
First, management must be aware of and committed to creating reverse logistics programs. In effect,
champions are needed to promote and support the programs. Those champions may then be able
to attract or assign the necessary financial resources for effective reverse logistics programs.

TABLE 3

COMMITMENT TO REVERSE LOGISTICS PROGRAMS

Global Measure Mean* Standard Deviation

The extent of management commitment 4.83 1.89
to reverse logistics programs

The extent of resource commitment 4.08 1.97

To reverse logistics programs

* 7-point scale: 1=little commitment 7=substantial commitment

JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 115

Reverse Logistics Program Success

To evaluate the effectiveness of reverse logistics programs, respondents were provided with a
list of reverse logistics program-related goals and asked to indicate how effective their firms have been
in achieving them.
The reverse logistics program-related goals were identified based on a review of the literature,
and refined during pre-testing. A total of 6 items were utilized. The items were evaluated on a 7-point
scale with 1 = not at all effective, 4 = somewhat effective, and 7 = extremely effective. The measure
includes both service-oriented items (environmental regulatory compliance and improved customer
relations) and financial-oriented items (cost containment, improved profitability, recovery of assets,
and reduced inventory investment).
To obtain a more holistic view of the respondents’ perceptions of reverse logistics program
performance, a separate question was included in the survey. Using the same 1-7 scale, respondents
were asked, “How would you rate the overall effectiveness of your current reverse logistics/returns
handling program?” Means and standard deviations for the six individual objectives and the global
measure of overall effectiveness are included in Table 4.

TABLE 4

EFFECTIVENESS IN ACHIEVING REVERSE LOGISTICS OBJECTIVES

Objective Mean* Standard Deviation

Environmental regulatory compliance 5.68 1.62
Improved customer relations 5.66 1.34
Recovery of assets 5.03 1.71
Cost containment 4.95 1.49
Improved profitability 4.75 1.58
Reduced inventory investment 4.74 1.79
Overall program effectiveness 5.24 1.45

* 7-point scale: 1=not at all effective 7=extremely effective

Significant inter-correlation (.785, p < .05) was found between the global program effective-
ness measure and the achievement of reverse logistics objectives. Accordingly, Anderson’s method
was used to verify discriminant validity between the effectiveness measure and the reverse logistics
objective variables.39 Confidence intervals were constructed (+/- two standard errors) for each pair-
wise comparison. Since none of the six pairwise comparisons included the value of one, Anderson’s
criteria for determining adequate discriminant validity was met for the two outcome variables
(achievement of reverse logistics program-related objectives and overall reverse logistics program
effectiveness).
116 DAUGHERTY, AUTRY, AND ELLINGER

Reverse logistics programs have been at least moderately effective in achieving the specific
program-related objectives at the respondents’firms. It appears as though firms have been most effec-
tive in achieving compliance with mandatory environmental regulations (5.68) and in using reverse
logistics to improve customer relations (5.66). The respondents also indicated that their firms have
been moderately effective in achieving reverse logistics objectives related to financial efficiencies,
including the recovery of assets (5.03), cost containment (4.95), improved profitability (4.75), and
reduced inventory investment (4.74).
The results suggest that retailers have had the most success in using reverse logistics programs
to achieve regulatory compliance and to respond to competitive market pressures. However, the results
also suggest that respondent firms are experiencing a modest level of success with objectives related
to operational efficiency. This pattern of achievement is not surprising, given that reverse logistics
programs are generally lower-volume, non-standard or exception-based and, thus, may not initially
lend themselves to the rapid achievement of operational efficiencies or economies of scale. However,
the mean overall program effectiveness measure (5.24) was relatively high, indicating that the
respondents perceive that the programs are already yielding benefits.

Associations Between Management Resource Commitment and Achievement of Reverse

Logistics Goals
Research Question 1-a sought to examine the associations between management resource
commitment and achievement of the six reverse logistics program objectives. Pearson correlation analy-
ses were performed. Results are presented in Table 5. Significant correlations with management
resource commitment were found for four of the six reverse logistics objective items (p < .05).
Management resource commitment was most strongly correlated with environmental regulatory com-
pliance (.401). Other significant correlations with management resource commitment were found
for reduced inventory investment (.292), improved profitability (.286), and recovery of assets (.276).
Overall, the results suggest that firms committing more management resources to reverse logistics
are more successful at achieving reverse logistics goals than firms committing lower amounts of
managerial resources to the programs.
 TABLE 5

CORRELATIONS AMONG STUDY VARIABLES

Management Resource
Environmental Improved Recovery Reduced Commitment Commitment
Cost Regulatory Customer Improved of Inventory to Reverse to Reverse
Containment Compliance Relations Profitability Assets Investment Logistics Logistics
Cost
Containment –
Environmental
Regulatory
Compliance .317* –
Improved
Customer
Relations .548* .588* –
Improved
Profitability .562* .360* .439* –
Recovery of
Assets .533* .221 .574* .333* –
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001

Reduced
Inventory
Investment .688* .291 .519* .671* .344* –
Management
Commitment
to Reverse
Logistics .215 .401* .134 .286* .276* .292* –
Resource
Commitment
to Reverse
Logistics .099 .343* .006 .237 .162 .144 .785* –
117

* Significant correlation at p < .05

118 DAUGHERTY, AUTRY, AND ELLINGER

Associations Between Financial Resource Commitment and

Achievement of Reverse Logistics Goals
The second Research Question, 1-b, examines the associations between financial resource
commitment and the six reverse logistics program objectives. Pearson correlations were calculated
and results are included in Table 5. Only one of the reverse logistics program objectives, environmental
regulatory compliance, was significantly correlated with financial resource commitment (.343).
In fact, with the exception of improved profitability, the associations between financial resource com-
mitment and the remaining reverse logistics objectives were weak. Unlike the strong correlations with
management resource commitment, it appears as though financial resource commitment is not sig-
nificantly impacting the achievement of reverse logistics program objectives. These results may be
reflective of respondents’indications that, in general, their firms have committed relatively low levels
of financial resources to reverse logistics. Respondent firms’allocations may not have been high enough
to have a meaningful impact on the achievement of reverse logistics program objectives.

Associations Between Achievement of Reverse Logistics Goals and

Overall Reverse Logistics Program Performance
Research Question 2 examines the associations between the six reverse logistics program
objectives and overall reverse logistics program effectiveness. As shown in Table 5, all six of the reverse
logistics program objectives were significantly correlated with overall program effectiveness. Envi-
ronmental regulatory compliance had the highest correlation with overall program effectiveness (.683).
Other very strong correlations with overall effectiveness were found for improved profitability
(.561), reduced inventory investment (.551), improved customer relations (.528), cost containment
(.496), and recovery of assets (.479).
The results of the correlation analysis for Research Question 2 indicate strong positive associ-
ations between each of the reverse logistics program objectives and overall program effectiveness.
To better understand the differential contribution of each of the individual objectives to overall
reverse logistics program effectiveness, a post-hoc stepwise regression analysis was utilized. All six
of the individual objectives were allowed to enter or leave the equation based upon a critical
F value of 4 (which is roughly equivalent to a t-value of +/- 2 at alpha = .05). Interestingly, the final
solution included only two of the six predictors: environmental regulatory compliance and improved
profitability entered and remained in the equation, yielding an R2 of .58. An alternate regression
analysis using a full model including all six individual reverse logistics objectives yielded an R2 of
.61. This indicates that the remaining reverse logistics program objectives (reduced inventory
investment, improved customer relations, cost containment, and recovery of assets) enhance the
explained variance in overall reverse logistics program effectiveness only marginally.
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 119

CONCLUSIONS AND MANAGERIAL IMPLICATIONS

Product returns in the retail industry have become an “epidemic problem.”40 Accordingly, to push
returns back through the pipeline in an effective and cost-efficient way and try to recover value, many
firms are re-evaluating their reverse logistics processes. It has been suggested that if a firm’s reverse
logistics program is not proactively managed, the result will be higher costs and missed opportuni-
ties for savings and profits.41
The current research provides support for committing management resources to the develop-
ment and implementation of reverse logistics programs. Based on the findings, firms that commit more
management resources to reverse logistics are doing a better job operationally on a day-to-day
basis. However, the associations between the commitment of financial resources and the achievement
of reverse logistics program goals were not as strong.
The results suggest that the commitment of management resources has more influence on the
achievement of reverse logistics program goals than financial resource commitment. However,
both are undoubtedly necessary for program success and the findings may be reflective of reluctance
by firms to devote resources to reverse logistics programs. Financial resource commitment was found
to be relatively low among the respondent firms. Greater allocation of resources may differentially
affect program performance, i.e., there may be a threshold effect.
The strong correlation found between the achievement of reverse logistics program goals and
overall program effectiveness have both direct and indirect benefits for the firm on a global or
strategic level. Direct benefits such as more effective utilization of inventory will be reflected in the
company’s financial statements. The indirect benefits of effective reverse logistics programs such as
better corporate image or improved levels of customer satisfaction, while not immediately apparent
from a monetary perspective, are also important to the continuing success of the organization and
customer relations.
Neither managerial nor financial resource commitment was found to be strongly related to cost
containment. Too often reverse logistics has been viewed as a necessary evil, with little thought to
proactively managing the return process. As firms develop more formalized programs and become
more proficient at reverse logistics operations, cost containment benefits may also accrue.
120 DAUGHERTY, AUTRY, AND ELLINGER

Future Research
This study offers empirical evidence to support the basic premises of resource-based theory and
the relationship between resource commitment and program performance. The research setting
involved one very specific firm application–reverse logistics programs in the catalog electronics indus-
try. Future research should further explore the proposed relationship through re-verification within
different industries and retailer types, i.e., using food retailers in traditional store formats, Internet
clothing retailers, etc. The tenets of the resource-based view should be widely generalizable;
however, further empirical testing is required.
The current research addressed the issue of resource commitment to reverse logistics at a gen-
eral level. No attempt was made to determine the prioritization of resource allocations or to identify
which particular inputs, assets, and competencies are most influential to the development of distinctive
reverse logistics capabilities. A limitation of the study is that single item measures were used for
management and financial resource commitment. Future research efforts should focus on the
development of multi-item constructs.
Additionally, the research focused on only one side of the buyer-seller dyad. Manufacturers must
deal with a significant volume of returns and thus, should have strong interest in reverse logistics as
well. Their perspective could provide greater insight into how to develop more effective reverse
logistics programs. Future research should explore these issues. As competitive pressures make
the commitment of resources to reverse logistics more commonplace, opportunities to further
examine the impacts of such issues on program success will undoubtedly present themselves.

NOTES
Ron Giuntini and Tom Andel, “Master the Six Rs’of Reverse Logistics,” Integrated Warehouse
1

and Distribution, 36, no. 3 (1995): pp. 93-98; Susan Reda, “Getting a Handle on Returns,”
Stores, 80, no. 12 (1998): pp. 22-26; and Craig N. Smith, Robert J. Thomas, and John A. Quelch,
“A Strategic Approach to Managing Product Recalls,” Harvard Business Review, 74, no. 5 (1996):
pp. 102-112.
2
Barry Berman, “Planning for the Inevitable Product Recall,” Business Horizons, 42, no. 2 (1999):
pp. 67-79; Tim Minahan, “Manufacturers Take Aim at End of the Supply Chain,” Purchasing, 124,
no. 6 (1998): p. 111.
Edward J. Marien, “Reverse Logistics as Competitive Strategy,” Supply Chain Management
3

Review, 14, no. 1 (1998): pp. 43-52.

Dale S. Rogers and Ronald S. Tibben-Lembke, Going Backwards: Reverse Logistics Trends
4

and Practices, (Reverse Logistics Executive Council, 1998).

Bruce Caldwell, “Reverse Logistics,” InformationWeek, no. 729 (1998): pp. 39-43; Toby E.
5

Gooley, “Reverse Logistics,” Logistics Management and Distribution, 37, no. 6 (1998): pp. 49-53.
6
Same reference as note 4, p. 2.
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 121

7
Same reference as note 4.
8
Same reference as note 3.
9
Same reference as note 5 to Gooley.
10
Same reference as note 2 to Minahan.
Helen L. Richardson, “Develop an Environmental Advantage; Distribution Management and
11

Logistics Planning,” Transportation and Distribution, 35, no. 8 (1994): p. 44.

James R. Stock, Development and Implementation of Reverse Logistics Programs, (Council
12

of Logistics Management, 1998).

Greg Raimer, “In Reverse.” Materials Management and Distribution, 12, no. 3 (1997):
13

pp. 12-13.
14
Same reference as note 1 to Giuntini and Andel; Same reference as note 2 to Minahan; Same
reference as note 3; Same reference as note 4; Tom Andel, “Reverse Logistics: A Second Chance to
Profit,” Transportation and Distribution, 38, no. 7 (1997): pp. 81-86; Patrick M. Byrne, and Alison
Deeb, “Logistics Will Meet the “Green” Challenge,” Transportation and Distribution, 34, no. 2 (1993):
pp. 33-37; Craig R. Carter and Lisa Ellram, “Reverse Logistics: A Review of the Literature and Frame-
work for Future Investigation,” Journal of Business Logistics, 19, no. 1 (1998): pp. 85-102; Herb Shear,
“Reverse Logistics: An Issue of Bottom-line Performance,” Chain Store Age, 73, no. 1 (1997): p. 224.
15
Same reference as note 14 to Shear.
16
Same reference as note 13.
Clyde E. Witt, “Reverse Logistics at BMG; Supply Chain Flow Supplement,” Transportation
17

and Distribution, 53, no. 8 (1998): pp. scf10-scf12.

18
Same reference as note 4.
19
Ann Saccomano, “Many happy returns,” Traffic World, 22, no. 7 (1997): pp. 22-24.
20
Same reference as note 14 to Carter and Ellram; same reference as note 12.
21
David A. Aaker, “Managing Assets and Skills: The Key to Sustainable Competitive Advan-
tage,” California Management Review, 31, no. 2 (1989): pp. 91-106; Jay B. Barney, “Firm Resources
and Sustained Competitive Advantage,” Journal of Management, 17, no. 1 (1991): pp. 99-120;
Kathleen R. Conner, “A Historical Comparison of Resource-Based Theory and Five Schools of
Thought Within Organizational Economics: Do We Have a New Theory of The Firm,” Journal of
Management, 17, no. 1 (1991): pp. 121-154; Margaret Peteraf, “The Cornerstones of Competitive
Advantage: A Resource-based View,” Strategic Management Journal, 14, no. 3 (1993): pp.179-191;
Birger Wernerfeldt, “A Resource-Based View of The Firm,” Strategic Management Journal, 5,
no. 2 (1984): pp. 171-180.
122 DAUGHERTY, AUTRY, AND ELLINGER

22
Marshall L. Fisher, “What Is The Right Supply Chain For Your Product?” Harvard Business
Review, 75, no. 2 (1997): pp. 105-116; Charles C. Poirer, Advanced Supply Chain Management–
How to Build a Sustained Competitive Advantage, Berett-Koehler Publishers, San Francisco,
1999; Theodore P. Stank, Patricia J. Daugherty, and Alexander E. Ellinger, “Pulling Customers
Closer Through Logistics Service,” Business Horizons, 41, no. 5 (1998): pp. 74-80.
John T. Mentzer, and K.B. Kahn, “A Framework of Logistics Research,” Journal of Business
23

Logistics, 16, no. 2 (1995): pp. 232-43; James R. Stock, “The Social Sciences and Logistics: Some
Suggestions for Future Exploration,” Journal of Marketing Theory and Practice, 4, no. 1 (1996):
pp. 1-25.
24
Same reference as note 14 to Carter and Ellram.
Sergio Olavarrieta and Alexander E. Ellinger, “Resource-based Theory and Strategic Logis-
25

tics Research,” International Journal of Physical Distribution and Logistics Management, 27,
no. 4 (1997): pp. 559-87.
26
Same reference as note 21 to Conner; William S. Schulze, “The Two Schools of Thought
in Resource-Based Theory: Definitions and Implications for Research,” in Paul Shrivastava,
Anne S. Huff, and Jane E. Dutton eds., Advances in Strategic Management Volume 10A, (Greenwich,
CT: JAI Press, 1994).
Same reference as note 21 to Barney; Jay B. Barney, “Looking Inside for Competitive
27

Advantage,” Academy of Management Executive, 9, no. 4 (1995): pp. 49-61; George S. Day,
“The Capabilities of Market-Driven Organizations,” Journal of Marketing, 58, no. 4 (1994):
pp. 37-52.
28
Same reference as note 21 to Wernerfeldt.
29
Same reference as note 21 to Conner.
Richard Hall, “The Strategic Analysis of Intangible Resources,” Strategic Management
30

Journal, 12, no. 1 (1992): pp. 83-103.

Same reference as note 21 to Barney; Robert M. Grant, “The Resource-Based Theory of
31

Competitive Advantage,” California Management Review, 33, no. 1 (1991): pp. 114-135; Raphael
Amit and Paul J. Schoemaker, “Managing Assets and Skills: A Key to Sustainable Competitive
Advantage,” Strategic Management Journal, 31, no. 1 (1993): pp. 91-106; Alan L. Brumagim,
“A Hierarchy of Corporate Resources,” in Paul Shrivastava, Anne S. Huff, and Jane E. Dutton eds.,
Advances in Strategic Management Volume 10A, (Greenwich, CT: JAI Press, 1994).
32
Same reference as note 31 to Amit and Schoemaker.
Same reference as note 31 to Amit and Schoemaker; Same reference as note 27 to Day;
33

Same reference as note 26 to Schulze.

34
Same reference as note 5 to Gooley.
JOURNAL OF BUSINESS LOGISTICS, Vol.22, No.1, 2001 123

35
I. Bogaert, R. Maertens, and A. Van Cauwenbergh, “Strategy As a Situational Puzzle:
The Fit Components,” in G. Hamel and A. Heene eds., Competence-Based Competition (Chichester,
England: John Wiley and Sons, 1994).
R.R. Nelson, “Why Do Firms Differ and How Does It Matter?” Strategic Management
36

Journal, 14, no. 3 (1991): pp. 179-192.

J. Scott Armstrong and Terry S. Overton, “Estimating Non-response Bias in Mail Surveys,”
37

Journal of Marketing Research, 14, no. 3 (1977): pp. 396-402.

38
Same reference as note 13.
James C. Anderson, “An Approach for Confirmatory Measurement and Structural Equation
39

Modeling of Organizational Properties,” Management Science, 33, no. 4 (1987): pp. 525-541.
40
Same reference as note 1 to Reda.
41
Same reference as note 14 to Andel; Same reference as note 5 to Gooley.

ABOUT THE AUTHORS:

Patricia J. Daugherty is Interim Director and Siegfried Professor of Marketing at The University
of Oklahoma. She received her Ph.D. from Michigan State University. She has published in a num-
ber of academic journals including International Journal of Logistics Management, International
Journal of Physical Distribution and Logistics Management, Journal of Business Logistics, and
Journal of Marketing Research, and has co-authored two books.
Chad W. Autry is a doctoral candidate at The University of Oklahoma. His research interests
include channel relationships and supply chain management. He holds an M.B.A. from Oklahoma
City University and has several years work experience in retailing and public relations. Mr. Autry has
published in Journal of Business Logistics, Journal of Retailing, Journal of Transportation
Management, and Supply Chain Management.
Alexander E. Ellinger is an Assistant Professor of Marketing and Distribution at Villanova Uni-
versity. He holds a Ph.D. from The University of Georgia and received his B.S. in Business Admin-
istration from Bryant College in Rhode Island. Dr. Ellinger’s publications have appeared in Business
Horizons, International Journal of Logistics Management, International Journal of Physical
Distribution and Logistics Management, Journal of Business Logistics, and The Logistics and
Transportation Review, and other academic journals.