Reverse Logistics Practice, Challenges, Opportunities and Employee’s Perception: The Case of Ethiopian Pharmaceuticals Supply Service
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Date
2023-11
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Addis Ababa University
Abstract
In the pharmaceutical industry, reverse logistics specifically refers to a return of pharmaceuticals
due to over-stock, distribution error, damage, quality problems including counterfeit products,
expiry and clinical trial recoveries. A good reverse logistics system keeps the public's safety, saves
costs, and gains a competitive advantage including increased reliability of the supplier. Despite its
importance, in developing countries, attention given to RL activity is minimal compared to the
forward logistics, and Ethiopia's practice isn’t an exception. This study aimed to explore the
current reverse logistics practice of EPSS and document the challenges, opportunities and
employee perceptions associated with its implementation. An institutional-based cross-sectional
study design was used and data were collected using a self-administered questionnaire, key
informants’ interview and data abstraction tool. The self-administered questionnaires were
distributed to 158 professionals and were supplemented by in-depth key informant interviews with
11 directors working in the selected EPSS hubs. The collected quantitative data were analyzed
using SPSS V-26 descriptive statistics and the qualitative findings were analyzed with generated
six themes. The study revealed that reverse logistics practice exists in EPSS. However, the practice
is in its premature stage as it lacks core components of planning, designing and standardization of
the process, and setting a well-documented policy and procedure for RL. The main driving forces
were increasing stock availability and customer satisfaction followed by the government policy of
social responsibility. The key challenges arise from a lack of definite rules and regulations on
handling returned products, the unpredictability of return dynamics and forecasting complexity
coupled with a lack of appropriate technology. The leading opportunities were found to be the
existence of responsible RL and incinerator management directorate, and high-temperature
incinerator availability. Employees have a positive perception towards RL practice and believe
that RL increases customer satisfaction and brings a competitive advantage. Based on the findings,
it is recommended that EPSS to focus on the pre-planning activities of RL and follow its cost-
effective implementation, strengthening communication with both upward and downward supply
chain partners as well as improving the management commitment towards RL practice.
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Keywords
Challenges, EPSS, Ethiopia, reverse logistics, return management