Product returns management: a study of value creation and appropriation in the supplier-retailer-3PL-triad
Creators: name: Dapiran, Gianpietro
Publisher: name: RMIT University
Year: 2024

description: Value creation and value appropriation are key aims of business organisations. While value has been studied in many management contexts, the value creating potential of product returns management remains under-researched.<br><br>Extant literature on product returns management has concentrated on the cost dimension of the returns process, with limited attention given to exploring the nature of value, its creation, and appropriation. The boundary spanning scope of product returns management has also been ignored, with most studies focussing on the activity of a single party in the product returns chain. Further, despite the increasing use of 3PLs in product returns management, the role of the 3PL in value creation remains little understood.<br><br>This research examines what value means in the context of product returns. It explores how value is created and appropriated in a product returns chain using a triadic case study composed of a retailer, two of its suppliers, and a 3PL engaged by the retailer, in the consumer electronics sector. The research extends the understanding of product returns value beyond a single party in the returns chain to a triad of entities.<br><br>Using an inductive qualitative methodology, this study found that value in the product returns chain was multi-dimensional. Value consisted of tangible (financial) and intangible elements; residual product value was of little importance to the suppliers and the retailer in the study. The main drivers of value involved the structure of the product returns chain, a collaborative orientation of the parties, and information management. The study also identified a process of value evolution that explains changes in value for the product returns chain parties when the returns chain changed from a decentralised configuration to a centralised structure.<br><br>The study has two major contributions. First, it offers a comprehensive explanation of the nature of value in product returns, and contributes a value evolution matrix to explain how value in a product returns chain could be realised, based on the value orientation of the returns chain members, and the nature of facilitation in the product returns process. Second, it develops a value creation and appropriation framework to explain how value orientation of the parties in the product returns chain and external facilitation by a 3PL could bring about process alignment to increase resource effectiveness and operational efficiency, and how trust, power, and relationship quality could affect value appropriation.<br><br>These findings challenge the traditional cost-based view of product returns, offering insights on how a 3PL could facilitate to align the operations of a retailer with those of its suppliers to create value in the product returns chain. The study contributes to our theoretical understanding of the product returns process, and reveals a practical managerial path to value creation and appropriation in product returns management.