Int. J.

Production Economics 140 (2012) 239248

Contents lists available at SciVerse ScienceDirect

Int. J. Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Factors for implementing end-of-life computer recycling operations

in reverse supply chains
Shams Rahman a,n, Nachiappan Subramanian b
a
b

RMIT University, School of Business IT and Logistics, GPO Box 2476, Melbourne 3001, Australia
Thiagarajar College of Engineering, Madurai, India

a r t i c l e i n f o

abstract

Article history:
Received 14 October 2010
Accepted 29 July 2011
Available online 17 August 2011

E-waste (discarded computers and electronic goods) has become a major environmental issue. It can be
minimized by increasing recovery from the waste stream through reverse supply chains. This paper
proposes a framework for end-of-life (EOL) computer recycling operations. It identies critical factors
for implementing EOL computer recycling operations and investigates the causal relationship among
the factors inuencing computer recycling operations in reverse supply chains using the cognition
mapping process DEMATEL. Results indicate availability of resource, coordination and integration of
recycling tasks and the volume and quality of recyclable materials, are critical for computer recycling
operations. Factors such as government legislation, incentive and customer demand are found to be the
major drivers.
Crown Copyright & 2011 Published by Elsevier B.V. All rights reserved.

Keywords:
Australia
Computer
DEMATEL method
Recycling
Reverse supply chain

1. Introduction
E-waste (discarded computers and electronic goods) has
become a major environmental issue that needs national attention. Euromonitor Internationals (2010) estimate shows that
global computer sales are growing. Between 2004 and 2009,
portable computers sold in Australia rose from about 2.53 million
to 3.88 million units, an increase of about 35% (Table 1). When
compared with G8 nations, the percentage growth of computer
use in Australia is higher than Japan and Canada and is at par with
USA, Italy and the United Kingdom. It is evident from Table 1 that
the per capita use of computers in Australia is second highest,
when compared with G8 nations. One in ve people in Australia
has access to a computer, whereas in Italy it is one in 33.
A report by the Australian Bureau of Statistics (ABS) shows
e-waste is growing three times faster than regular waste. Australia,
a nation of just over 20.6 million people, had discarded or stockpiled
a total of 8.7 million computers at the end of 2006 (ABS, 2006). This
report predicted that by the end of 2008, 1.6 million computers will
be sent to landll rubbish dumps, while a further 1.8 million would
join the 5.3 million old computers already in storage.
One way of minimizing the environmental impact of e-waste is
to use reverse supply chains to increase the amount of product
materials recovered from the waste stream. Reverse supply chain is
a process by which a manufacturer systematically accepts previously shipped products or parts from the point of consumption
for possible reuse, remanufacturing, recycling, or disposal. Thus

reverse logistics has an important environmental dimensions

(Ciliberti et al., 2008; Linton et al., 2007; Zhu et al., 2008;
Alvarez-Gil et al., 2007; Wu and Dunn, 1995) as well as dimensions
relating to value reclamation (Ilgin and Gupta, 2010; Mutha and
Pokharel, 2009; Alshamrani et al., 2007; Pokharel and Mutha,
2009; Kumar and Putnam, 2008; Logozar et al., 2006; Andel,
1997). The effective implementation of reverse logistics does not
preclude achieving one goal at the expense of the other. Considering this, many world class companies have realized that reverse
logistics practices, combined with source reduction processes, can
be used to gain competitive advantage and at the same time can
achieve sustainable development (Maslennikova and Foley, 2000;
Lee et al., 2010; Hu and Bidanda, 2009; Seuring and Muller, 2008;
Neto et al., 2008). The purpose of this study is to use the cognition
mapping process to identify the critical factors in designing and
implementing end-of-life (EOL) computer recycling operations in
reverse logistics and investigate their causal relationships.
The reminder of the paper is organized as follows. A review of
the literature relevant to this study is presented in Section 2,
followed by a description on the research methodology in Section
3. The results of the analysis are presented in Section 4. Finally, a
discussion of various implications and the conclusions drawn
from this research are in Section 5.

2. Literature review
2.1. Reverse logistics

Corresponding author. Tel.: 61 3 9925 5530; fax: 61 3 9925 5960.

E-mail address: shams.rahman@rmit.edu.au (S. Rahman).

In the past decade there has been a renewed interest in reverse

logistics. The rst contributions to the knowledge on this subject

0925-5273/$ - see front matter Crown Copyright & 2011 Published by Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2011.07.019

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S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

Table 1
Statistics of computers sold and population in Australia and G8 economies.
(Source: Adapted from Euromonitor International (2010) and World Bank (2010)).

Table 2
Reverse supply chain network type (Source: Updated from Rahman (2003)).
Reverse network

Country

Population
(millions,
2009)

Australia
20.60
Japan
127.07
Germany 81.88
Russia
141.37
France
65.07
Italy
60.11
UK
61.39
Canada
34.00
US
305.00

% growth over
No. of
computers sold last ve years
(million units, (Base year 2004)
2009)

No. of person
having access to
single computer in
2009

3.88
13.72
6.42
5.78
10.03
2.01
7.21
7.45
93.10

5
9
13
25
7
33
8
5
3

34.70
14.78
49.32
75.23
64.23
42.55
40.26
26.87
36.41

began in the 1960s and 1970s (Seitz and Wells, 2006). One of the
comprehensive studies in the eld of reverse logistics was
conducted by Kopicki et al. (1993). They observed that in
implementing an environmentally conscious program, companies
typically reect three phases: reactive, proactive and value seeking. Newly introduced environmental standard regulations
usually force organizations to a reactive response to them. These
organizations may examine environmental issues from time to
time, but they do not actively pursue competitive advantage
through environmental practices. Unlike reactive companies,
proactive companies often implement reverse logistics programs,
such as reuse and recycling, and attempt to develop a competitive
advantage by designing effective environmental programs. They
tend to produce products that generally satisfy customers environmental concerns. Value seeking companies, on the other hand,
integrate environmental programs into their business strategy.
Most companies in this phase have advanced environmental
programs with extremely efcient reverse logistics systems.
Research on reverse supply chain has ranged from quantitative
modeling to qualitative case studies. One of the valuable sources
for qualitative case studies is Flapper et al. (2005). They
assembled a number of case studies from a variety of industries,
including pharmaceutical, automotive and cell phone manufacturing and a mail order company. A useful summary of case
studies, which employed quantitative modeling can be found in
Rahman (2003). By categorizing studies into the three recovery
processes of reuse, remanufacturing and recycling, Rahman
(2003) discussed the modeling and solution techniques employed
in these studies. Jayaraman et al. (2003) developed a mathematical model for a reverse distribution of product return ows and
suggested a heuristic solution methodology for this problem.
Salema et al. (2007) proposed a more generalized model for
designing a capacitated multi-product reverse supply chain network with uncertainty. More recently, Aras et al. (2008) focused
on the collection and reuse aspects of reverse supply chains,
whereas, Teunter et al. (2008) dealt with the question of when
companies should use shared resources for production and
remanufacturing and when they should use specialized resources.
In their study, Zuidwijk and Krikke (2008) considered two
strategic questions in the context of closed-loop supply chains
to establish how much a company should invest in product design
and how much in the production processes to process their
returned products. They formulated the problem as both an
integer linear programming and a rules of thumb-based problem.
A summary of these cases is presented in Table 2, which shows
not only the sources of the studies, but also the types of reverse
logistics networks used.
A reverse logistics network may occur in one of two contexts:
either as a closed-loop or open-loop system. In a closed-loop

Source

Network type
Open-loop

Reuse

Kroon and Vrijens (1995)

Jayaraman et al. (2003)
French and LaForge (2006)
Tan and Kumar (2008)
Aras et al. (2008)

Recycle

Barros et al. (1998)

Louwers et al. (1999)
Realff, et al. (2000)
Spengler et al. (1997)

Remanufacture

Jayaraman et al. (1999)

Krikke et al. (1999)
Listes and Dekke (2005)
Inderfurth (2005)
Teunter et al. (2008)
Zuidwijk and Krikke (2008)

Closed-loop
X
X
X
X
X

X
X
X
X
X
X
X
X
X
X

system, sources (origin) and sinks (destination) coincide so that

ows cycle in the system. On the other hand, in an open-loop
system, ows enter at one point of the logistics system and leave
at another (Rahman, 2003). Table 2 shows that generally, recycling operations in reverse logistics operate in open-loop systems
whereas, remanufacturing and reuse operations operate in
closed-loop reverse logistics systems.
Using a sample of 141 manufacturing facilities in a wide
variety of process industries, French and LaForge (2006) investigated the sources of returned product and materials and the
subsequent reuse decisions made by these companies. Within a
remanufacturing environment, Inderfurth (2005) examined to
what extent the prot orientation in product recovery management stimulates an environmentally conscious behavior. Rahman
(2006) investigated the relationship between world class logistics
(WCL) competencies and environmentally focused logistics (EFL)
practices. Using data from the Australian top 500 companies, the
study established that there exists a signicant relationship
between the WCL competencies and EFL practices. Skinner et al.
(2008) examined the impact of different disposition strategies
such as recycle, refurbish, remanufacture and repackage on
strategic performance in the reverse supply chain process.
Analyzing responses from 118 auto part companies they found
that in instances of active resource commitment to reverse supply
chain programs, supply chain managers may expect superior
economic and operational performances by choosing recycling
and remanufacturing recovery processes. Srivastava (2007) and
Pokharel and Mutha (2009) provided a useful review of reverse
logistics research.
2.2. Reverse supply chain in the computer industry
Over the last decade several reverse supply chain studies have
been conducted in the context of computer rms. For example,
Ferguson (2000) reported how Dell exploits reverse supply chain
to streamline the process for customers to refurbish existing
computers or buy new components. IBMs asset recovery services
have integrated reverse supply chain practices to enhance environmental performance (Roy and Whelan, 1992; Thierry et al.,
1995; Grenchus et al., 2001). Taking a qualitative approach,
Knemeyer et al. (2002) studied the factors that affect reverse
supply chain systems for end-of-life computers. Boon et al. (2002)
on the other hand, investigated the critical factors inuencing the
protability of end-of-life processing of computers and suggested
appropriate policies, which would ensure viable infrastructure for

S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

Table 3
Reverse supply chain practices in the Computer Industry.
Reverse supply chain
activities in Computer
Industry

Source

Reuse
Repair

Ravi et al. (2005), Forge (2007)

Tan et al. (2003), Tan and Kumar (2008),
Ashayeri et al. (1996)
Tan et al. (2003), Tan and Kumar (2008)
Ravi et al. (2005), Knemeyer et al. (2002),
Mayers et al. (2002), Hall and Williams
(2007), Goosey and Kellner (2002), Forge
(2007), Dalrymple et al. (2007), Krikke et al.
(1999), Shih (2001)
Ravi et al. (2005)
Mayers et al. (2002)
Mayers et al. (2002)

Refurbish
Recycle

Remanufacture
Resell
Dispose

computer recycling. Tan et al. (2003) investigated ways to

improve the performance of a computer company to support its
reverse logistics operation in the Asia Pacic region. They found
inconsistencies in decision-making on reverse supply chains and
inappropriate use of the information technology systems, which
were supporting the reverse supply chain.
More recently, Tan and Kumar (2008) examined the viability of
reverse supply chain in the computer industry. Using a linear
programming formulation they developed a decision-making
model for manufacturers to use in deciding under which conditions they should consider reverse supply chain practices in order
to maximize prot. They found that reverse supply chains could
be protable only when the return volume is high Table 3.
Using a case study Krikke et al. (1999) derived a model to an
achieve reduction in the recycling costs of personal computer
monitors. Shih (2001) discussed reverse supply chain system
planning for recycling electrical appliances and computers in
Taiwan. Ravi et al. (2005) analyzed the determinants of reverse
supply chains implementation for end-of-life computers by a
small Indian computer manufacturing company. They found
legislation and economic factors were the two most important
determinants for end-of-life computer recycling. Lee and Dong
(2008) suggested a two-stage heuristic algorithm to design a
supply chain network for end-of-lease computer product recovery. Since computer manufacturers have short life-cycle products
that can lose 1% of their value per week, it is critical that end-oflife computers are recovered quickly (Guide et al., 2006).

241

commitment, incentive systems, quality of inputs and vertical

integration.
Stock (1998) suggested that factors related to management
and control, measurement and nance determine the success of a
reverse supply chain program. As allocation of resources towards
environmental and educational programs increases, it is more
likely that a company institutes a system of environmental
management, which would determine the direction to reverse
supply chain and environmental activities. It is critical that
companies adopt life cycle costing approaches to reverse supply
chain activities and monitor performance. Dowlatshahi (2000)
proposed a conceptual framework to study the implementation of
reverse supply chains using eleven factors. These factors can be
broadly categorized as strategic and operational issues. Strategic
factors include legislative concerns, environmental concerns,
customer service, quality and strategic costs. Some of these
factors are the same as those identied by Carter and Ellram
(1998). A company must rst consider and address these strategic
issues and then focus on operational factors at the tactical level of
reverse supply chains. Operational factors include cost benet
analysis, transportation, warehousing, supply management,
remanufacturing/ recycling and packaging.
Using the studies by Carter and Ellram (1998), Stock (1998)
and Dowlatshahi (2000), Knemeyer et al. (2002) proposed a
conceptual model to investigate reverse supply chain systems
for EOL computers. This model comprises nine factors categorized
as the internal and external environments of reverse supply chain
systems. Recently, Dowlatshahi (2005) suggested a ve-factor
strategic framework to design and implement remanufacturing/
recycling operations in reverse supply chains. The factors being
strategic costs, strategic quality, customer service, environmental
concerns and legal concerns.
Although described from different perspectives, many factors
are common to all these models. From an extensive literature
review, including the studies discussed above, we have identied
eight factors that many practitioners and academics generally
view as essential for designing and implementing recycling
operations in reverse supply chains. The factors considered in
this study can be seen as holistic in nature, since it takes into
account factors of EOL computers from four perspectives suggested by a balanced scorecard approach: innovation and learning
(legislation, volume and quantity), customer orientation (customer demand and environmental concerns), internal business
orientation (resource, integration and coordination), and nancial
aspects (incentive and strategic cost/benet). These factors are
explained as follows:

2.3. Factors affecting reverse supply chains

Several conceptual models that suggest ways to design and
implement reverse supply chain systems have been developed.
The model developed by Carter and Ellram (1998) identied two
sets of factorsinternal and external. Jointly, these factors determine whether a company is reactive, proactive, or value-seeking
in implementing a reverse logistics system. The two external
factors of government regulations and customer demands and the
internal factor of policy entrepreneur were considered by Carter
and Ellram (1998) to be the main drivers of reverse logistics
systems. As governmental regulatory requirements and customer
demand for green products increase, a company is more likely to
get involved in advanced environmental programs and institute
an efcient and effective reverse logistics system. The principal
internal driver is the existence of a policy entrepreneur within the
company who is personally committed and willing to take
responsibility for reverse supply chain activities. Other factors
determinant to the implementation of reverse supply chain
systems include the support of top management, stakeholder

2.3.1. Legislation
Research suggests that government legislation is one of the
main drivers for a rms environmental efforts. Legislation refers
to regulations or Acts passed by government agencies to ensure
rms take back and reuse the products they produce. The major
aim of this initiative is to protect the environment, avoid landll
and prevent contamination of water.
Porter and Van de Linde (1995) argued that a trade-off view
between ecology and economy is wrong. The innovation made by
rms to meet regulation requirements sparks offsets in effective
material usage, better product creation and/or improved product
yields. Walker et al. (2008) stated that environmental regulations
can be seen as a motivator to innovate and reduce the environmental impact at low cost rather than cause for litigation. To
analyze the impact of changes in regulations or law, Tan and
Kumar (2006) developed a decision-making model for reverse
supply chains in the computer industry. Their dynamic model is
capable of analyzing a rms protability and losses due to

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S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

regulatory change. There is also a set of arguments, which shows

that compliance with environmental legislation is no guarantee of
improved environmental performance (Bowen et al., 2001). However, proactive efforts towards environmental regulation and
legislation are said to be the drivers of successful reverse supply
chain management projects. References that cite some aspects of
legislation in this area are shown in Table 4(a).
2.3.2. Customer demand
Customer demand is considered as one of the major driving
forces for reverse supply chain practices. Research suggests that
there is an increasing customer demand for green products and
for organizations to engage in environmental supply chain practices (New et al., 2000). The stakeholders of large rms have also
become more concerned about customer attitudes and are more
conscious of environmental issues and want to be socially
responsible themselves (Bowen, 2000). The impact of customer
demand is felt equally by manufacturing and retail businesses.
For example, nowadays vehicle manufacturers are not competing
on cost alone, but also on environmentally responsible features. In
turn, manufacturers are forcing their strategic suppliers to obtain
environmental accreditation, such as that of the Eco-Management
and Audit Scheme (Lamming and Hampson, 1996). Similarly, big
retailers are pressuring their suppliers to be more environmentally responsible (Hall, 2001). Carter and Dresner (2001) investigated the impact of customer demand on environment
management in relation to timeframe. They suggested that a long
term supply chain perspective has a more positive inuence on
environmental management than customer requests, which often
involve unreasonable timeframes They perceived that, in the long
run, this approach would move the rm to be value seekers.

Recently, Kapetanopoulou and Tagaras (2010) studied Greek

manufacturing companies and found customer demand to be
the most important motivating factor for product recovery
activities. Some of the studies concerning customer demand and
reverse supply chain are shown in Table 4(b).
2.3.3. Strategic cost/benet
Strategic costs are non-recurring costs incurred for the design
and implementation of a reverse supply chain system. These may
include costs associated with the acquisition of additional
machinery and equipment to remanufacture and refurbish products, acquisition costs for additional warehousing and costs
associated with hiring additional skilled managers and workers.
However, such investment must be planned, controlled and
minimized for effective reverse supply chain implementation
(Dowlatshahi, 2005). Ravi et al. (2005) pointed out that economic
factor is a driving force for reverse supply chains. Firms engaged
in reverse supply chains are in the process of investment recovery
and certainly would receive direct (input materials, cost reduction, value added recovery) and indirect benets (impeding
legislation, market protection, green image and improvement in
customer/supplier relations). Guide and Van Wassenhove (2009)
revealed that US$700 million of perfectly operating product that
could be recovered were destroyed. They found that a US rm,
ReCellular, has gained economic advantage through refurbishing
cell phones. Manufacturer HP showcased that returns of its
products could cost around 2% of total outbound sales and only
half of them were being recovered (Guide et al., 2006). These
examples indicate that, if additional resources as part of the
strategic costs are planned and controlled effectively, companies
will be nancially beneted in the long run when implementing

Table 4
Literature review.
Source

Factor

Broad conclusion

F1: Legislation

Legislation is one of the drivers of successful reverse supply chain

and also acts a motivator for low cost innovative sustainable
practices

F2: Customer demand

Customer demand makes rms, to be socially responsible and to

include environmental management practices into their supply
chains

F3: Strategic cost/

benet

Strategic costs in implementing reverse logistics would yield

substantial direct and indirect benets to the rm

F4: Environmental
concern

Invoking environmental conscious through reverse logistics

would lead the rm to gain competitive advantage

(e) Volume and Quality

Carter and Ellram (1998), Knemeyer et al. (2002), Tibben-Lembke
and Rogers (2002), Murphy and Poist (2003), Dowlatshahi (2005),
Ravi et al. (2005), Pokharel and Mutha (2009)

F5: Volume and

Quality

Quality of the returned product leverages the reverse supply

chain transportation cost. Pricing based on quality amplies the
volume of returns

(f) Incentive
Carter and Ellram (1998), Savaskan et al. (2004), Ferguson and
Toktay (2006), Pokharel and Mutha (2009)

F6: Incentive

Proper alignment of incentives among partners in reverse supply

chains would enhance return rates and their behavior

F7: Resource

Appropriate allocation and effective utilization of available

resources for reverse supply chain operations along with
appropriate product strategy would yield assets to the rm

F8: Integration and

Coordination

Coordination of reverse supply chain and integration of

information support system would increase the speed of recovery
and protability of the rm

(a) Legislation
Carter and Ellram (1998), Carter and Carter (1998), Bowen
et al.(2001), Knemeyer et al. (2002), Dowlatshahi (2005), Walker
et al. (2008), Tan and Kumar (2006),
(b) Customer demand
Lamming and Hampson (1996), Carter and Ellram (1998), Bowen
(2000), Hall (2001), Carter and Dresner (2001), Alvarez-Gil et al.
(2007), Kapetanopoulou and Tagaras (2010)
(c) Strategic cost/benet
Andel and Aichlmayr (2002), Mason(2002), Teunter and van der
Laan (2002), Dowlatshahi (2005), Ravi et al. (2005), Guide et al.
(2006), Guide and Van Wassenhove (2009)
(d) Environmental concerns
Stock(1998), Dowlatshahi (2005), Tan and Kumar (2006), Guide
and Van Wassenhove (2009), Pokharel and Mutha (2009)

(g) Resource
Stock (1998), Dowlatshahi (2005), Daugherty et al. (2005), Richey
et al. (2005), Pokharel and Mutha (2009), Kapetanopoulou and
Tagaras (2010)
(h) Integration and coordination
Hess and Meyhew (1997), Carter and Ellram (1998), De Brito et al.
(2002), Fleischmann (2003), Daugherty et al. (2005), Yalabik et al.
(2005), Chouinard et al. (2005), Tan and Kumar (2006), Guide and
Van Wassenhove (2009)

S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

reverse logistics. Studies concerning strategic cost/prot aspects

are shown in Table 4(c).
2.3.4. Environmental concerns
Environmental concerns and green issues are also drivers of
reverse supply chains. According to Mason (2002), environmental
concerns in reverse supply chains began with reclaiming product
packages. A signicant amount of research has been done to
showcase that reverse supply has led rms to be more competitive.
For example, by studying a sample of leading edge ISO 14001
certied companies in South East Asia, Rao and Holt (2005)
concluded that sustainable supply chain practices lead to rm
competiveness and higher economic performance. It is also suggested that the reverse logistics operations for EOL computers
should take into account the environmental and green issues (Ravi
et al., 2005). Murphy and Poist (2003) suggested that the environmental factor has been considered as an important criterion by
managers and it would become mandatory in the future. Presley
et al. (2007) proposed a framework to incorporate environmental,
economic and social concerns and applied the model to make
decisions on reverse logistics outsourcing. References that discuss
some aspects of environmental concerns are given in Table 4(d).
2.3.5. Volume and quality
Guide and Van Wassenhove (2009) stressed that the volume of
returns and quality of products are major drivers for reverse supply
chains. When compared with forward supply chains, product
quality is not uniform in reverse supply chains (Tibben-Lembke
and Rogers, 2002). The returned product quality could fall into
categories such as faulty, damaged or unwanted by customers. Tan
and Kumar (2006) suggested that quality of returns has signicant
impact on reverse operations and effective gate-keeping will avoid
the additional logistics cost of unnecessary transportation and
storage of scrap. Pokharel and Mutha (2009) emphasized that the
pricing of product should be based on the quality of the returned
products. They also found that good quality product requires fewer
processes to reuse it. The volume of return products is critical for
implementation of reverse supply chains (Carter and Ellram, 1998).
Studies which addressed some aspects of volume and quality of
returned products are summarized in Table 4(e).
2.3.6. Incentive
Ferguson and Toktay (2006) stated that the right incentives
would enhance return rates and the behavior of the reseller.
Manufacturers should align incentives with proper access to used
products to benet from remanufacturing. A rm has to decide
whether the manufacturer or retailer should collect the returned
products under a monopoly or competitive situation (Savaskan
et al., 2004). Pokharel and Mutha (2009) suggested a rm could
benet if they are able to relate incentive to product obsolescence. A summary of the literature concerning incentive is
provided in Table 4(f).
2.3.7. Resource
Dowlatshahi (2005) stated that the overall success of reverse
supply chain systems depends on the effective use of available
resources. The available resources are referred to as facilities,
personnel, manufacturing/material handling/processes capabilities and computer system. He also argued that if a rm uses
resources properly, they would become assets and generate
sound reverse supply chain decisions. Effective utilization of
resources could minimize the strategic cost involved in an EOL
reverse supply chain system. Use of current resources for reverse
supply chain operations depends on the compatibility of remanufactured product and the overall product strategy of the rm

243

(Dowlatshahi, 2000). A reverse supply chain system could rely on

available resources to effectively cope with the stochastic nature
of supply and demand and to obtain a yield from a remanufacturing process Pokharel and Mutha (2009).
2.3.8. Integration and coordination
The role of coordination and the importance of communication
in both speedy and early disposition of returned products and in
remanufacturing planning have been discussed extensively (Hess
and Meyhew, 1997; Daugherty et al., 2005; Fleischmann, 2003;
Yalabik et al., 2005). Few attempts have been made to also
improve integration and coordination with the use of an information support system (Chouinard et al., 2005; Daugherty et al.,
2005). Efcient information systems are needed to individually
track and trace product returns, to forecast return product and for
inventory management (De Brito et al., 2002). Guide and Van
Wassenhove (2009) revealed that a slow reverse supply chain
that takes 10 weeks to put returned products back on the market
would translate to a loss of 10% of the total value in that product.
In some instances this far exceeds the prot margins on consumer
electronics, so a computer manufacturer is well-advised to
develop competencies in fast recovery systems. This was further
emphasized earlier by Tan and Kumar (2006) who identied that
transportation and supplier delay in processing returns without
integration and coordination have signicant impact on the
viability of a reverse supply chain process.

3. Research methodology
3.1. Method
The effectiveness of decision-making processes for complex
systems depends largely on the ability to understand the causeeffect relationships between variables interacting within the
systems. The Decision-Making Trial and Evaluation Laboratory
(DEMATEL), originated at the Battelle Memorial Institute, Geneva
between 1972 and 1976. It is an effective procedure for analyzing
problem structure and develop causal relationships between
factors or sub-systems (Fontela and Gabus, 1974). The DEMATEL
methodology has been applied in many elds, such as hospital
service quality (Shieh et al., 2010), sustainable development (Tsai
and Chou, 2009) and alternative fuel selection (Lin et al. 2009).
The DEMATEL methodology is chosen for our analysis because it
is proven to deliver more valuable information for decisionmaking for a problem with complex interdependencies. The
procedural steps of DEMATEL methodology are as follows:
Step 1: Generate direct-relation matrix: suppose there are R
decision-makers (experts) involved in the study and n number
of decision-making factors. Each decision-maker k is asked to
indicate the degree to which a factor i affects factor j. These
pairwise comparisons between any two factors can be denoted
by xkij and given an integer score ranging from 0, 1, 2, 3, and 4,
representing No inuence, Low inuence, Medium inuence, High inuence, and Very high inuence respectively.
The elements for ij are set to zero. Responses from each
decision-maker give rise to a n x n non-negative matrix,
[xkij] Xk, where knumber of decision-makers varying
between 1 and R. An initial direct-relation matrix A with
individual element aij, can therefore can be expressed as
aij nxn

R
1X
xk
R k 1 ij

Step 2: Normalizing the direct-relation matrix: the normalized

direct-relation matrix M can be obtained by the following

244

S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

expression:
M

0
; where m max@ max

1rirn

n
X
j1

aij , max

1rjrn

n
X

1
aij A

i1

Step 3: Obtaining the total-relation matrix: once the normalized

direct-relation matrix is obtained, the total relations matrix T
can be derived from the following expression:
T M M 2 M 3 . . .M 1

1
X

Mi

i1

T MIM1 , where I is an identity matrix

Respondents were assured that their answers would be kept

condential.
None of the respondents were familiar with the DEMATEL data
collection procedure. Therefore, the following two steps were
considered:
1. Respondents were explained the meaning of the integer scores
of the 04 scale.
2. Respondents were explained how these scores need to be
considered while making the pairwise comparisons between
any two factors.

Step 4: Compute dispatcher group and receiver group: dene S

and C as nx1 and 1xn vectors representing the sum of rows and
sum of columns of the total-relation matrix T, respectively.
Suppose Si be the sum of ith row in matrix T, then Si
summarizes both direct and indirect effects given by factor i
to the other factors. Similarly, suppose Cj be the sum of jth
column in matrix T, then Cj summarizes both direct and
indirect effects given by factor j to the other factors. The
expression (Si Cj) indicates the degree of importance that
factor i plays in the entire system, whereas, (Si  Cj) indicates
the net effect that factor i contributes to the system. If (Si Cj)
is positive, factor i is net dispatcher, and if (Si  Cj) is negative,
factor i is a net receiver.
Step 5: Set threshold value and obtain the cognition map: the
cognition map can be derived by mapping the dataset of the
(Si Cj) and (Si  Cj), where (Si Cj) is the horizontal axis and
(Si  Cj) is the vertical axis. To construct an appropriate map, a
decision-maker must assign a threshold value for the inuence
level. Only some factors whose inuence level in matrix T is
higher than the threshold value will be chosen to construct the
map. If the threshold value is too low, the map will be too
complicated, whereas, if the threshold value is too high, many
factors will remain independent without showing the relationships with other factors.

3.2. Sampling and data collection

A three-part questionnaire was employed for interviews and
data collection. Part 1 contained general questions about the
company and respondents background, whereas, Part 2 contained
eight open-ended questions designed to capture respondents
opinions on the importance of eight factors for the implementation of EOL computer recycling operations considered in this
study. Part 3 contained questions regarding generation of directrelation matrix (Step 1 of the DEMATEL Methodology) using
respondents perception on the inuencing power of one factor
over another based on the scale 04.
The critical case sampling method was used to identify the
cases for this study. Critical case sampling is a type of purposive
sampling (Neuman, 1991) that looks for cases that are particularly information rich in relationship to the questions under
consideration (Yin, 2003). We identied two Melbourne-based
companies, which are engaged in computer recycling operations
for a considerable number of years. Six senior managers were
chosen from these two companies (three from each company)
who have reasonably long experience in computer recycling
operations. The interviews and data collection for the DEMATEL
Methodology were conducted on two separate days. All six
interviews were conducted face-to-face by the rst author of
this study and each interview lasted approximately 30 min.
Interviewee answers were recorded and then transcribed.

These two steps were critical to ascertain the accuracy of data.

The data collection procedure using the DEMATEL Methodology
lasted approximately 30 min for each respondent.

3.3. Application of the DEMATEL methodology

As discussed in the literature review section, eight factors were
identied for designing and implementing EOL computer recycling
operations in reverse supply chains. These factors are F1: Legislation,
F2: Customer demand, F3: Strategic cost/benet, F4: Environmental
concern, F5: Volume and Quality, F6: Incentive, F7: Resource, and
F8: Integration and Coordination. Six respondents, three each from
two Melbourne-based computer recycling companies, participated
in this study. The respondents are senior managers who have,
on average, eight years working experience in e-waste recycling.
A short description of these companies is given below.
Case 1. Company ABC Ltd
Company ABC Ltd is a recycler of various products in Australia.
The company has received a number of awards for best practice
and quality management practices. The company started its
business in the mid 80s. The computer recycling operations
started in 1988, in the form of precious metal recovery from
computer main frame equipment. Currently, with over 40
employees and operations in Sydney and Melbourne, ABC Ltd
has become a leader in e-waste solutions. The company is an ISO
14001 and Environmental Protection Authority, Victoria (EPA)
accredited recycler. The company entered into strategic alliance
with Dell and Toshiba, two original equipment manufacturers
committed to reducing e-waste by implementing reverse logistics
processes to EOL computers.
Every year ABC Ltd collects up to 60,000 CRT monitors,
100,000 central processing units (CPUs), 400 tonnes of batteries,
200 tonnes of frames, 50 tonnes of LCD screens and 500 tonnes of
other peripherals. By applying innovative methods of disassembly
and carefully managing resulting waste streams, ABC Ltd.
reclaims precious metals for reuse and diverts up to 98% of
product (by weight) from landll.
Case 2. Company XYZ Associates
The vision of company XYZ Associates is to implement sustainable practices to support a thriving community and economy
by leading the way in using resources more efciently and
reducing environmental impacts. The company works across all
industry sectors, as well as with schools, state and local governments, community groups and individuals to promote and
encourage environmental sustainability. It runs an array of
environmental programs that provide various services. Recycling
is one of the most active programs of company XYZ Associates. It
targets specic materials that need to be disposed of with care
and discretion. Among these are computers and IT peripherals,
batteries, paint, oil and construction waste.

S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

The companys recycling program started in 2005. It is a free

service, available to residents and small businesses in Victoria
wanting to dispose off unwanted, old and unused computers in a
safe and environmentally responsible way. Using an outsourcing
company, company XYZ Associates collects up to 1000 tonnes of
computer and peripherals per year. Around 95% to 98% of the
materials collected are recycled. A summary of the company
information is shown in Table 5.

4. Results and discussion

From responses from the six senior managers at these two
companies, six matrices were generated using pairwise comparison. These were then used to obtain an average matrix using
Eq. (1). Using Eq. (2) a normalized direct-relation matrix was
generated. Finally, the total-relation matrix was computed using
Eq. (3), which is shown in Table 6.
The DEMATEL analysis produced two categories of results.
Firstly, it prioritized the factors based on their degree of importance in the decision-making context under consideration. Secondly, it classied factors either as net dispatchers/drivers or as
net receivers depending on the net inuence to the context. The
direct and indirect inuence of recycling operations implementation factors are shown in Table 7. As explained earlier (Section 3)
the importance of factors is assessed by (Si Ci) values. The higher
the value, the more important the factor is. Based on (Si Ci)
values, the importance of eight factors can be prioritized as
F7 4F8 4F54F1 4F3 4F4 4F2 4F6. The results show that the
three most important factors are F7: Resource (Si Ci 3.450), F8:
Integration and Coordination (Si Ci 2.860) and F5: Volume and
Quantity (Si Ci 2.849). The importance of resource has also
been highlighted in earlier research. For example, Richey et al.
(2005) and Daugherty et al. (2005) found that resource commitment makes reverse supply chain more efcient and more
effective. However, the resources must be focused on developing
capabilities to handle returns. Studying the auto parts industry
Skinner et al. (2008) came to the similar conclusion. The importance of resources was further revealed in the interview data. For

245

example the senior most manager from Company ABC Ltd

mentioned:
We are in this operation [recycling EOL computer] for a long
time. We need to upgrade our technology and develop new
processes for effective recycling. Unfortunately, we are constrained by resources.
Other two important factors found in this study are Integration
and Coordination, and Volume and Quantity. Since the timing of
returns and quantity of returns are uncertain in reverse supply
chain operations, coordination and integration of reverse supply
chains plays a critical role in running the recycling operations
more efciently. This has been supported by Daugherty et al.
(2005) who suggested that for superior performance in reverse
supply chains organizations must develop information technology capabilities. Efcient information systems are needed to track
and trace product returns, to forecast return product and for
inventory management (De Brito et al., 2002).
Whether a factor is net dispatcher/driver or a net receiver
depends on (Si  Ci) values. If (Si Ci) value is positive, factor is a
net dispatcher/driver, and if (Si Ci) value is negative, factor is a
net receiver. The results indicate that the three most inuential
drivers are F1: Legislation (Si  Ci 1.338), F6: Incentive
(Si  Ci 0.531) and F2: Customer demand (Si Ci 0.108), and
the net receivers are F7: Resource (Si  Ci  0.930), F3: Strategic

Table 7
The degree of inuence of the factors.
Factors

Si

Cj

S i Cj

S i  Cj

F1:
F2:
F3:
F4:
F5:
F6:
F7:
F8:

1.964
0.749
0.977
1.318
1.421
0.910
1.260
1.221

0.626
0.641
1.579
1.215
1.428
0.379
2.190
1.639

2.590
1.390
2.556
2.533
2.849
1.289
3.450
2.860

1.338
0.108
 0.602
0.103
 0.007
0.531
 0.930
 0.418

Legislation
Customer
Strategic cost
Env. Concern
Volume and Qty
Incentive
Resource
Integ and Coord

Table 5
A summary of the two case companies prole.
Organization
name

Respondent characteristics

Organization characteristics

Position of
respondents

No of
Average year of
respondents experience in
recycling

Year of
Accreditation Components handle
operation

Alliance

% of
reclaimed
materials

Case 1: Company Senior

ABC Ltd
managers

10

22

ISO 14001

CRT monitors, CPU, batteries, frames,

LCD screens and other peripherals

Dell and
Toshiba

98

Case 2: Company Senior

XYZ Associates managers

Not been
accredited

Computers and peripherals, batteries,

paints, oil and construction waste

No
alliance

95 to 98

Table 6
The total-relation matrix.
F1:Legislation F2:Customer F3: Strategic cost F4: Env. Concern F5:Volume and Qty F6:Incentive F7:Resource F8:Integ and Coord
F1:
F2:
F3:
F4:
F5:
F6:
F7:
F8:

Legislation
Customer
Strategic cost
Env. Concern
Volume and Qty
Incentive
Resource
Integ and Coord

0.090
0.206
0.020
0.170
0.079
0.078
0.038
0.033

0.176
0.051
0.013
0.201
0.030
0.027
0.033
0.026

0.196
0.046
0.123
0.121
0.370
0.164
0.274
0.300

0.328
0.170
0.066
0.113
0.128
0.111
0.176
0.137

0.315
0.073
0.141
0.178
0.127
0.174
0.213
0.233

0.141
0.027
0.066
0.032
0.035
0.022
0.042
0.026

0.416
0.105
0.304
0.322
0.347
0.227
0.181
0.318

0.302
0.071
0.244
0.181
0.305
0.107
0.303
0.148

246

S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

cost (Si Ci 0.602), F8: Integration and Coordination (Si  Ci

0.418) and F5: Volume and Quality (Si Ci 0.007).
The main driving force of reverse supply chain found in this
study is legislation. This nding is also supported by earlier
research (Walker et al., 2008) and also contradicts with others
(Kapetanopoulou and Tagaras, 2010). The importance of legislation was also highlighted in interviews, e.g.:
Sometimes we cant run our machines and equipment to their
fully capacity. This is due to insufcient returns. I [personally]
believe that more stringent government policies and legislations will boost returns.
Our communities and businesses must develop environment
awareness. However, thats a lengthy process. What we need
right now, is more rigorous policies and regulations similar to
other European nations in Australian 3C (computer, communication and consumer electronics) industry.
Other two important drivers found in this study are incentive
and customer demand. Providing nancial support by the government in terms of incentives to the EOL computer recyclers would
certainly lessen the resource burden and enhance recycling activities. Factor such as the customer demand has also been found to
be an important driver in other previous studies. For example,
Alvarez-Gil et al. (2007) and Kapetanopoulou and Tagaras (2010)
found customer demand as the most important driver for product
recovery activities in Spain and Greek, respectively.
This study not only identied the critical factors for implementing EOL computer recycling operations but also developed the
casual relationships between these factors through the construct of
a cognition map. To construct a cognition map based on the
DEMATEL results, selection of a particular threshold value is said
to be a critical criterion. Following the procedure suggested by
Tamura et al. (2002), a threshold value of 0.200, which is more than
the average of the elements of matrix T (Eq. (3)), was considered to
construct the cognition map (Fig. 1). The map has been constructed
using (Si Ci) as the X-axis and (Si Ci) as the Y-axis. The locations

of the factors with respect to X and Y-axis determine the degree of

importance that the factors play and indicate the net effects that
they contribute to the context of the study. For example, F7:
Resource (located furthest away from the Y-axis) is assessed as the
most important factor and F1: Legislation (furthest away from the
X-axis on the positive direction) is considered as the most
inuential dispatcher/driver in the study context.
The cognition map, shown in Fig. 1, indicates that among the
drivers/dispatchers, F1: Legislation is the main factor. Legislation
directly impacts on F7: Resource, F4: Environmental concern and
F5: Volume and Quality of input F8: Integration and Coordination.
The factor F7: Resource in turn impacts on F5: Volume and Quality
of input, F8: Integration and coordination and F3: Strategic cost/
benets. Also F4: Environment concern, F5: Volume and Quality of
input, and F8: Integration and Coordination inuence one another.
F6: Incentive directly impacts on F7: Resource. Understanding of
the dynamic nature of the reverse supply chain through these
causal relationships is critical to the formulation of reverse supply
chain implementation strategies. This was also revealed in the
interview of one of the managers from Company XYZ Associates:
Government has to understand that putting in place the right
legislation has a profound impact on the recycling activities. It
has the potential to trigger higher quantity of returns and
which in turn will help us to run our system more efciently.
This study assists us to understand these interrelationships
more systematically. Consider the following path in Fig. 1:
Path: F1F7(F5 and F8)F3: An appropriate legislation on EOL
computer disposal will inuence companies to allocate adequate resources for recycling. This in turn will enhance the
capacity to acquire more returns through proper integration
and coordination of various reverse supply chain processes.
Ultimately, this will impact on the strategic cost/benet of the
company. With a better understanding of these complex
relationships managers would be able to devise strategies for
further improvement in reverse supply chains operations.

Fig. 1. The cognition map of total relationship.

S. Rahman, N. Subramanian / Int. J. Production Economics 140 (2012) 239248

5. Conclusion
One way of minimizing the environmental impact of e-waste
is to increase the amount of product materials recovered from the
waste stream through recycling operations. This paper proposed a
framework to implement end-of-life (EOL) computer recycling
operations in reverse supply chains using eight factors. These
factors are legislation; customer demand; strategic cost/benet;
environmental concern; volume and quality; incentive; resource
and integration and coordination.
Previous studies have prioritized the implementation factors/
alternatives for recycling operations, whereas our study attempts
not only to identify critical factors for implementing EOL recycling operations but also to determine the interrelationships
between factors, using case studies. The DEMATEL Methodology
was employed to generate a cognition map of causal relationships
of the factors.
The results show that companies involved in recycling operations in reverse supply chains should pay more attention to the
factors categorized as net dispatchers/drivers (legislation, customer demand, environmental concern) and their impacts on the
receivers (resource, strategic cost/benet, integration and coordination and volume and quality). An assessment of the direct and
indirect impacts through the casual links between factors would
help mangers develop appropriate strategies for further improvement of the EOL recycling operations in reverse supply chains.
This study is conducted using six senior managers from two
companies. Future studies must consider larger sample size to
assess the methodology and the effectiveness of the proposed
solution to enable generalization. Furthermore, the rating of the
scale could be obtained within a specic range, instead of getting
a crisp number for factors, normally considered hard to judge. In
that case, fuzzy DEMATEL could be used and might bring out the
complex interrelationships and intertwining characteristics
among factors under uncertainty. Factors that impact the operation of compliance schemes, i.e., distance and geography, population size and density, cost of labor, length of time in operation and
consumer behavior could also be taken into consideration.
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