Customer Value Chain Analysis for Sustainable Reverse Logistics

Implementation: Indonesian Mobile Phone Industry

H. Maheswari1, G. Yudoko1, A. Adhiutama1

Abstract - Mobile phone products contribute the largest that RL programs in developing countries precisely harm
amount of e-waste compared with other electronic devices. to human and the environment because these activities are
This is caused by the shortest product life cycle, consumptive emphasized solely for profit and reputation [2, 8, 9, 10].
behavior, and unintegrated linkage among stakeholders to For that reason, this research gives a strong emphasis on
conduct sustainable reverse logistics. They implement it sustainable reverse logistics (SRL) terminology. To
separately and without considering other interest, role,
needs and values as well as ignore the sound relationship.
ensure SRL activities meet all stakeholders’ expectation,
Therefore, from literature review, this research aims to it is required customer value chain analysis (CVCA) that
identify comprehensively the expectation, values and possible the researcher to comprehensively identify
relationship each stakeholder in doing the program by using primary stakeholders, their interaction, expectation, and
customer value chain analysis. The result is showing the big value [13]. Actually, every stakeholder plays a role in
different values and role among stakeholders but it is still handling e-waste through SRL activities because it is
needed a tight interaction among them even though they useless if we cope e-waste problems personally [11]. The
must play their own role in order to solve the severity of e- other side, they do not to be blamed and refuse regarded
waste problems through sustainable reverse logistics as the root cause. Therefore, it is very interesting to
implementation.
identify role, expectation value of stakeholders, as well
Keywords – Customer Value Chain Analysis,
interaction among them in SRL activities by CVCA
Sustainable reverse logistics especially in Indonesia which is densely populated and
consumptive behavior.

I. INTRODUCTION
II. METHODOLOGY
The number of smart phone user in Indonesia
increases almost twenty percent per year [1]. This is For conducting systematic literature review, it is
caused by the economics growth illustrated by needed two main steps [12], i.e.: 1) category selection by
Indonesians income per capita about four million per defining and refining a topic, designing a search, and
month that increase their purchasing power to replace locating research reports. This research reviews many
their mobile phone that exacerbated by Indonesian papers based on three main variables, namely: role and
consumptive behavior as well the increasing of affluent values of stakeholders as well sustainable reverse logistics
urban population [2, 3]. As a product that has the shortest without limiting the year of publication and records in a
product life cycle, mobile phone product contributes the prepared spreadsheet to be analyzed holistically. 2)
largest amount of e-waste compared by other electronic material evaluation by emphasizing on SCOPUS indexed,
devices [4]. The main steps related to the global e-waste accredited journal and research that must answer all
crises are pressing the volume generated by repairing, research question. For obtaining the comprehensive
refurbishing, and remanufacturing; designing of flexible identification of role and expectation of every stakeholder
recycle product; and technology fulfillment [5]. These and value relationship among them, this study used
actions are called as reverse logistics (RL) activities, i.e. customer value chain analysis (CVCA) [13].
the take-back activities to recapture value or proper
disposal process of the goods that have been depleted of
its useful life either due to expired date, damaged, or III. RESULTS AND DISCUSSION
product failure [6].
RL is one of activities for recovering assets and The meaning of SRL in this research is a process in
maintaining customer relation [7]. RL activities also aim which businesses systematically accept used mobile
to protect the environmental sustainability [6]. phone from consumer for possible recycling,
Unfortunately, RL is staying as the form of environmental remanufacturing, or disposal [14] without sacrifice
protection activity often fail to reach the lofty ideals communities and environment interest. Therefore, intent
because the activities are often not in line with the whole of this section is to understand each stakeholder values
sustainability concepts i.e. profit target achievement, and roles through CVCA then to show a tight interaction
planet conservation, and people harmony as well as among them in the chain that believed facilitate to meet
reputation improvement [3.] Many researchers explained the different value of stakeholders in implementing SRL.
A. Role of Stakeholders or friend. If, community reluctant to participate in
recycling program, the activity in reverse chain cannot be
There are three roles of government in supporting done successfully.
SRL implementation [15], First, as a policy maker,
government should make legislations, acts, policies, and B. Stakeholders Needs and Values
regulations. Besides that, government should arrange
taxation and financial incentive in the market [16], For defining the ideal SRL program, is required to
provide facilities and infrastructures as well as formulate understand all stakeholders needs and values. Figure 1
law in terms of exports and imports of e-waste or used explains each stakeholder’s expectation in implementing
goods. Second, as a regulator, government should design SRL. As mention above, consumers as the main resources
mechanism of take back program, deposit fund, and e- expect reasonable return incentive from SRL activity
waste management system. Government also should through takeback operator or intermediary business
educate communities and businesses to be more (TBO) and manufacturer. Actually, most of them can go
concerned about the environment. Third, as a facilitator, directly to the market for trade in, unfortunately, many
government must provide waste management facilities people said that they are often treated unfairly in
and conduct promotional campaigns of reverse logistics estimating the price of their used goods.
program. TBO or intermediary business needs profit from their
As mention in previous paragraph, government will activity in reverse chain. They need used electronic
never succeed if they are handling it by themselves. product for refurbished before sale it to the market. In
Government needs the roles of businesses and also many developed countries, manufacturers are obliged to
community. The roles of businesses comprise to create provide curbside machine that assess and give incentive
eco-design product [17, 18] into a more flexible product directly since all stakeholders certainly look forward
for recycling [5], provide after sales service to repair profit from this activity. Most of manufacturers willing to
product damaged do that product can be reused, transfer a contribute since they need a good community’s perception
recycling skill to intermediary business, and give from their environmental activities. Besides that,
reasonable incentive to community. They must increase government need also benefit from recycling activities.
their resource to commit in implementing activities in Therefore, to realize the successful of SRL program,
reverse chain [2, 16] since they will face a lot of barriers government must create a circular economy that give
in handling e-waste. Besides the role of government and benefit for all parties that conducted reverse chain
business, for handling e-waste is needed an active role of activity. For instance, government must stipulate a
communities [8] as resources used mobile phone, regulation related to product quality standard either new
collector, and informer [18]. Their willingness to send a or secondhand product to increase the length of life,
used electronic product for recycling is a key action to educate all parties about how to treat after using an
create RL activities. Most of them prefer keep at home to electronic product and how to use it fairness as well as
send it for recycling due to they did not get a good instilling that e-waste is not waste but a valuable material
incentive. Some of them give to other such as their family that can give a lot of benefit [19].

Fig. 1. Customer value chain analysis for sustainable reverse logistics implementation.
 After understanding the needs and values, this collaborate to TBO by teaching special skill in recycling
research describes the interaction among stakeholders process and providing a collecting facility. Location of
based on their roles, expectation, and values that depicted collection centers provided by businesses is recognized as
in figure 2. Consumers are resources in SRL activities for a critical determinant of recycling behavior [20, 21] since
TBO and manufacturer. The consumers endure recycling many people complaint they hard to find the facility.
cost through purchase tax that usually embedded in Many companies stated SRL is less important, less
product price. Certainly, they expect a reasonable return competitive, lack systems and technologies, low financial
incentive if they trade in to the secondary market. To support and inadequate personnel manager [6].
support SRL program, manufacturers must provide Implementing SRL activities is more difficult than
qualified product such as more durable, eco-design, and forward logistics because returned goods are mostly
flexible products for recycling process. They should unidentified and incomplete [6].

Collecting Process

Resources
CONSUMERS INTERMEDIARY
Giving Information
BUSINESS/TAKEBACK
Profit OPERATOR

Service point, Recycle

Eco-design
Flexibility
Product Partcipate in
Receiving Sharing Skill Legislatiom
Profit Collecting Process

Share Recycling
Cost
Reputation Provide Collecting
Product Profit from Tax, Quality
Improvement Point
Financial of Planet & People
Education Incentives

Regulator

Policy Maker
MANUFACTURERS

Facilitator
GOVERNMENT

Fig. 1. Stakeholders interaction, role, and value in sustainable reverse logistics implementation

V. CONCLUSION ACKNOWLEDGMENT

Verified that developing countries require SRL This study would not have been possible without support
implementation by identifying each stakeholder role, material and non-material from LPDP scholarship from
expectation or motivation, and value comprehensively for The Ministry of Finance and The Ministry of Research
solving the severity of e-waste problems. The tight Technology and Higher Education. The author would like
relationship among stakeholders shows that SRL to thank and appreciate the invaluable constructive views
implementation is never realized if it is done separately. and comments by reviewers.
Each group stakeholder has its own role. Three roles of
government are police maker, regulator and facilitator. REFERENCES
While, manufacturer has an active role to create a high-
quality product so it is not littering the environment [1] Emarkerter, “The number of mobile phone users (in
quickly, transfer recycling skill and knowledge, and million)” 2016, accessed on January 2016
provide recycling process and technology. Community [2] L. Akenji, Y. Hotta, M. Bengtsson, and S. Hayashi, “EPR
has an active role as the resources through separating and policies for electronics in developing Asia: an adapted
sending it for recycling. Mobile phones are the most used phase-in approach” Waste Management and Research,
electronic product on the globe and those ones more 2011, 29 (9), 919-930.
frequently changed. Therefore, for further research, there [3] H. Maheswari, G. Yudoko, and A. Adhiutama,
is a big opportunity to study about the type of “Stakeholder engagement model in quattro helix model for
mobile phone reverse logistics in Indonesia: A conceptual
collaboration among stakeholders for mobile phone framework”, in IOP Conference Series: Material Science
product based on this CVCA.
 and Engineering, 2017. https://doi:10.1088/1757- [20] H. Maheswari, “Supply Chain Management”, Center of
899X/277/1/012062 Teaching Mataterial Development, Economic Faculty
[4] P. Andarani and N. Goto, “Potential e-waste generated from Mercu Buana University, 2008
hushold in Indonesia using material flow analysis”, Journal [21] N. Aras and D. Aksen, “Locating collection centers for
Material Cycle Waste Management, 2014, 16, 306-320. distance and incentives dependent returns”, International
http://doi.org/10/1007/s10163-013-0191-0 Journal of Production Economics, 2008, 111, 316-333.
[5] I.C. Nnorom and O. Osibanjo, “Overview of prospects in
Adopting Remanufacturing of end-of-life electronic
products in developing countries”, International Journal of
Innovation, Management and Technology, 210, 1 (3), 328-
338.
[6] D.S. Rogers, P. Tibben-Lembke, “Going Backwards:
Reverse Logistics Trends and Practices”, Reverse Logistics
Executive Council, University of Nevada, Reno Center for
Logistics Management, 1998
[7] L. Paquette, “Reverse logistics and the creations of reverse
flows for the mobile phone industry” Thesis, Aarush
University, 2009
[8] S.M. Budijati, Model of Reverse Logistics Management:
Close Loop and Opened Loop as well as Consumer
Behavior Accommodation, Dissertation, UGM, 2016.
[9] F.O. Olorunniwo and X. Li, “Information sharing and
collaboration practices in reverse logistics”, Supply Chain
Management, 2010, 15 (6) 454-462.
[10] K.S. Khor and Z.M. Udin, “Impact of reverse logistics
product disposition towards business performance in
Malaysian E7E companies “, Journal of Supply Chain and
Customer Relationship Management, 2012 DOI:
10.5171/2012.699469
[11] G. Yudoko, “Integrated municipal solid waste planning and
management (IMSWPM) in developing countries: A
conceptual framework”, Journal Management Technology,
2007
[12] W.L. Neuman, “Social Research Methods: Qualitative and
Quantitative Approach”, Pearson New International
Edition, 7th edition, UK, 2014
[13] T. Donaldson and L.E. Preston, “The stakeholder theory of
the corporation: concepts, evidence, and implication”,
Academy of Management Review, 1995, 20 (1), 65-91.
[14] S. Dowlatshahi, “A strategic framework for the design and
implementation of remanufacturing operations in reverse
logistics, International Journal of Production Research,
2005, 43 (16), 3455 – 3480.
[15] A. Atasu and L.N.V. Wassenhove, “An operations
perspective of product take-back legislation for e-waste:
theory, practice, and research needs”, Production and
Operation Management, 2012, 21 (3), 407-422.
[16] W. Wilhelm, A. Yankov, P. Magee, “Mobile phone
consumption behavior and the need for sustainability
innovation”, Journal of Strategic Innovation and
Sustainability, 2011, 7 [2] 20-38.
[17] S.S. Khan, S.A. Lodhi, F. Akhtar, “Sustainable WEEE
management solution for developing countries applying
human activity system modeling”, Management of
Environmental Quality, 2014, 26 (1), 84-101,
http://doi.org/10.1108/MEQ-05-2014-0072
[18] A. Vereecke and S. Muylle, “Performance improvement
through supply chain collaboration in Europe”,
International Journal and Production Management, 2006,
26 (11), 1176 – 1198.
[19] H. Maheswari, G. Yudoko, A. Adhiutama, “Towards
sustainable reverse logistics: A conceptual framework of
quattro bottom line approach” in Indstrial Engineering and
Enginering Management Conference, 2017, 1377-1381.