Barriers and success factors to reverse logistics for SDG : evidence from the Finnish retail market

Abstract

Reverse logistics (RL) has increasingly supported efforts to adopt sustainable supply chain practices, especially when aiming to achieve the United Nations Sustainable Development Goals (SDGs). Even though RL is widely used in manufacturing and industry, the retail sector in Finland is not explored as much. This thesis examines the main obstacles and strengths involved in adopting reverse logistics in Finnish retail and analyses how this leads to improved sustainability. By linking reverse logistics to SDG-focused goals, thesis emphasizes the challenges, opportunities and insufficiencies in its application. Experts’ opinions were combined with Principal Component Analysis and Analytic Hierarchy Process findings in the study. To gather the information used, an expert survey was carried out among ten individuals from the Finnish retail and sustainable sectors with expertise in logistics, the environment and policy. It examines the perceived effect of various problems in the five main categories: Management Barriers, Technological Barriers, Economic Barriers, Policy Barriers and Organizational Barriers.

AHP was used to structure and help select what to prioritize. Ranking approaches suggest focusing on problems that cause the most issues. PCA and AHP help increase the reliability of the research and assist in finding both facts and opinions in the data, bringing a special effect to reverse logistics studies. The study results point out that challenges related to Management and Technology stand as the biggest roadblocks to successful reverse logistics in Finnish retail. Management issues such as not planning for the future, insufficient support from the top and low awareness were significantly more important than any other factor and suggest that good leadership and governance are key to driving changes for sustainability. Experts also mentioned Technological Barriers like old systems, low use of digital tools and inadequate infrastructure which they considered key reasons for the need of tech modernization and new investments. Internal readiness and capabilities were seen by Finnish retail firms as more important than guidelines and policies set by government or other external bodies. As a result of PCA, the study discovers which variables are the most important for explaining the differences in expert opinions, bringing the barrier framework down to five main components. Seeing all the barriers aligned in this way makes it simpler to grasp their effect on using RL. This includes different major problems that retail companies need to handle such as management issues, a lack of adequate technology, gaps in awareness and policy understanding, problems with compliance and inefficient structure.

Leadership, staff training, modern technology and efforts toward a circular economy were noted as main factors helping reverse logistics become central to a business. It was also revealed from research that planning for sustainability is only half the battle for many kinds of firms because they face weakness in putting those plans into action.

The findings also tie challenges and opportunities in reverse logistics to the achievement of the SDGs. Reaching the goals for sustainable production and consumption (12), climate protection (13), resource management (9) and strong communities (11) depends significantly on reverse logistics in this model. By adding details about sustainability, the thesis demonstrates how retailers can encourage companies to adopt circular economy approaches. The results of this research can be used in the real world. Finland’s retailers are encouraged to examine their internal strengths and work practices, guided by data and technology, to meet the demands of RL. The research shows policymakers the difficulties in the retail sector, enabling them to offer and find ways to assist all companies in their sustainability actions. Additionally, educational bodies and sustainability experts can turn the findings into materials for helping retail firms embed them into practice. However, the analysis brings up a few issues, namely working with few participants and examining a single country. Research might expand its scope to include studies between countries in the Nordic region or EU along with measuring the long-term consequences of RL on company performance and sustainability. All in all, this research helps explain the main factors behind whether or not reverse logistics are used in the Finnish retail sector. Since it takes information from experts and data, using reverse logistics can guide businesses to stand out and cooperate in being more sustainable.