Reverse logistics capabilities and supply chain performance in a developing country context

Today and in the highly complex pharmaceutical industry, reverse logistics is a core capability for pharma companies that seek competitive advantages from the efficient management of returns and recalls, e.g. due to errors, expired stocks, quality-related or environmental issues, non-compliance and other consumer-related concerns. And yet in many developing countries where the pharma industry is a big part of the economy, the value of RL is not well understood. In this study, we examine the ambivalent impact of reverse logistics capabilities within the pharmaceutical supply chains in a developing country by focusing on four key reverse logistics capabilities, i.e. logistics information systems, process formalisation, flexibility, and top management support. The findings show that logistics information management systems, process formalisation, and flexibility significantly affect supply chain performance of pharmaceutical firms. However, the hierarchical regression found no significant moderating effect of top management support between reverse logistics capabilities and supply chain performance. Our subsequent discussion and implications for practice and future research are based on these findings.