The Impact of Reverse Logistics Practices on Organizational Performance: Evidence from Pakistan’s Textile Sector

Abstract

Purpose: This research analyzes the implementation of reverse logistics in textile organizations in Pakistan and the impact it has on the organizations. RBV and dynamic capabilities to analyze reverse logistics capabilities such as logistics information management, closed-loop logistics, coordination and integration of reverse logistics, as well as inter-organizational systems. Further, I assess the reverse logistics capabilities and their impacts on the organization by integrating various reverse logistics capabilities.

Design/methodology/approach: Author used a quantitative research design, cross-sectional survey research methodology. We created a questionnaire and collected data from 220 mid-to-senior level supply chain and logistics managers working in textile supply chain companies in Pakistan. We assessed the measurement model through confirmatory factor analysis and assessed the structural model through PLS-SEM using Smart-PLS 4.8.0 and a bootstrapping (with 5000 replications).

Findings: The results show the five reverse logistics capabilities have a positive impact on reverse logistics performance. Of the five capabilities, coordination has the most positive impact. Reverse logistics improves organizational performance and positively impacts performance as a mediator. The reverse logistics model positively impacts reverse logistics and organizational performance at 58.7% and 37.4% respectively. Overall, the model represents and explains the two levels of the organization effectively.

Originality/value: The study extends reverse logistics literature by documenting the influence of logistics capabilities on business performance in the case of a growing economy. The study offers industry-specific evidence for the Pakistani textile industry, the largest export-oriented manufacturing industry in Pakistan, and offers practitioners (including industry managers and government officials) with evidence-based insights for applying reverse logistics for competitive excellence and to gain environmental competitiveness.

Keywords: Reverse logistics; Organizational performance; Textile sector; Pakistan; PLS-SEM; Logistics capabilities; Dynamic capabilities; Supply chain management