Reverse Logistics Practices and Value Chain Performance in the Food and Beverage Industry in Kenya

Abstract

Reverse logistics practices include all activities in the reverse flow from the point of utilization to the point of origin in order to recapture value to add competitive advantage or suitable disposal at the End of Life (EoL) or End of Use (EoU) capacity. Reverse logistics implementation in Kenya faces notable challenges, including infrastructural constraints, high costs of collection and reverse flows, lack of consumer participation, and limited awareness among small and medium enterprises. This research aimed at establishing the role of reverse logistics practices and value chain performance in the food and beverage industry in Kenya. Specifically, the study sought to establish the role of recycling practices, reusing practices, remanufacturing practices, product returns practices and the moderating effect of consumer involvement on value chain performance in the food and beverage industry. The research was based on the institutional theory, social network theory, resource based view theory and Michael Porter’s value chain model and it was significant to researchers and academicians, supply chain officers and the government. The research used descriptive research design and the study covered 291 companies in the food and beverage industry and a sample size of 74 companies chosen using purposive sampling by the researcher for data collection. The instrument of primary data collection was questionnaires while the instruments of secondary data collection involved published journals and articles. The data was analyzed using qualitative and quantitative methods. The pilot study was conducted from 10% of the entire population. Data was coded in SPSS version 24 and analyzed using descriptive and inferential statistics. The study findings indicated that remanufacturing has the most significant influence on value chain performance in the food and beverage industry followed by recycling and product returns. The study also established that most of the organizations who manufacture packages that can be reused do so for reusing at the consumption point by the consumer but they do not mostly reverse the products for recycling at the organizational level. The study also found that most organizations had implemented isolated aspects of reverse logistics but others had not yet embraced the idea of reverse logistics in their value chains as an optimization technique. Therefore, the study concluded that the organizations that have considered reverse logistics in their value chains are improving performance of their value chains and reducing their operational costs in the process. The study recommended that food and beverage manufacturing companies should strive to maintain strong relationships with their suppliers and consumers in order to streamline their reverse logistics process and enhance the optimal performance of their value chains. The study recommended that the food and beverage industry regulators and the government should devise policies that would allow food and beverage manufacturers to integrate their value chains to help avoid losses that impact the efficiency of these businesses and eventually the economy as a whole. During the research it was noted that a majority of the existing studies focused on the adoption of reverse logistics practices rather than the implementation. This study will serve as a reference point for organizations which have implemented reverse logistics practices in their value chains. This research was based on reverse logistics practices and value chain performance of the food and beverage industry in Kenya and there is a need to undertake similar studies in retail or commercial sector to uncover the underlying relationships and the findings may identify interesting comparisons.