Organising Product Recovery in Business Networks

Licentiate thesis, 2012

The licentiate thesis includes an analysis of different ways of organising product recovery. The aim of product recovery is raw materials conservation, which is strongly related to sustainable development. The focus of this thesis has been on the physical flows from the disposers towards new end-users through different product recovery options that include recycling, remanufacturing, and refurbishing. In this thesis a framework for analysing different ways of organising product recovery in inter-organisational networks is developed. The framework applied in the study relies on the Industrial Network Approach (e.g. Håkansson et al., 2009). The analysis of empirical findings has been performed in all three network layers of the ARA model (Håkansson and Snehota, 1995), in the activity pattern, resource constellation and in the web of actors. The key research issue in the activity layer is to identify differences between activity structures with regard to principles of postponement and speculation, and activity interdependencies. In the resource layer, the research issue is to explore adaptations and tensions. With regard to the actor layer, the main research issue deals with how business relationships in terms of inter-organisational information exchange and the positioning of actors affect activity coordination and resource combining. In addition to the analysis through the models of the Industrial Network Approach, the concept of transvection (Alderson, 1965) is used as a complement to study product recovery to analyse various ways of organising product recovery. The concept of transvection regards all activities as either sorts or transformations with regard to identity, time, place, and form. Sorting is the decision aspect concerned with classification of objects and the direction of transformations of these objects. A qualitative case study in the PC industry has been conducted, with a focus on an actor, who is performing and coordinating different product recovery activities and options together with third party logistics providers and retailers of used products, as regards disposers’ different needs. The concept of transvections effectively elucidates various ways of organising activities with regard to principles of postponement and speculation as well as how sorting decisions direct and re-direct the objects in the network. Structuring of information in time, place, form, and identity dimensions supports sorting rules that steer objects into different product recovery options. This organisation of information facilitates sorting, activity coordination, and resource combining between firms. Information sharing provides possibilities for matching supply and demand of the reprocessed products and enhances resource utilisation. This thesis highlights the significance of a network perspective on organising product recovery, which adds to the literature on reverse logistics and Closed Loop Supply Chain Management. Analytical tools which were developed within the Industrial Network Approach can be applied to investigate organising product recovery. The results of this study can be useful for managers to understand the effects of integrating forward and reverse physical flows. Keywords: industrial networks, reverse logistics, closed loop supply chain management, product recovery, organising, activity coordination, resource combining, transvection, sorting.