Reverse Logistics in the Age of Digital Transformation for Circular Economy and Halal Logistics Through the Leadership of Asia

Reverse Logistics in the Age of Digital Transformation for Circular Economy and Halal Logistics Through the Leadership of Asia

Khairunnisa Musari, Zaroni Zaroni
DOI: 10.4018/978-1-7998-6477-6.ch006
OnDemand:
(Individual Chapters)
Available
$33.75
List Price: $37.50
10% Discount:-$3.75
TOTAL SAVINGS: $3.75

Abstract

Asia is changing rapidly. Realizing the nature of change, Asia can influence the value of change to the world. At the same time, digital technology is transforming the economic and business world. In the logistics industry, not only digitalization, but the circular economy is also disrupting. However, there is great potential for the logistics business to develop efficiency opportunities through reverse logistics. Asia has a chance to spread the value of reverse logistics as one form of a circular economy. Asia has opportunities also to bring the value of reverse logistics into halal industry. This chapter will show empirical studies from several leading companies based in Asia that implementing reverse logistics and halal logistics. All of them reinforces the opportunity of Asia's leadership to influence the reverse logistics values to the world. Through blockchain, Asia may lead the reverse logistics in the age of digital transformation for circular economy and halal logistics.
Chapter Preview
Top

Introduction

Digital transformation is coming faster in all sectors. The pandemic has not only had an impact on the industry but has also contributed to the acceleration of this transformation. Digitalization does not solve all problems. However, digitalization cannot be avoided because it is able to offer better data, better management, automation, optimization, efficiency, and digitization implementation. Allied Market Research (2020) mentioned the pandemic has put an immense strain on the global supply chains which in turn increases the demand for efficient and effective logistics infrastructure. For this reason, technology investment toward digital transformation is a must to make it easier for the industry to quickly adapt to market demands. In the logistics sector, digital transformation is needed to answer various challenges where the logistics industry needs to be more open and clean, reform its structure, develop new strategies, and apply modern technology.

From the environmental perspective, it is undeniable, the pandemic significantly also brings positive consequences to the effects of climate change. The pandemic not only brings stories of illness and death but also stories of clear water and blue sky. The weakening of the economy, in fact, was followed by the improvement of the quality of air and the environment. Long before the Covid-19 pandemic occurred, concerns over resource consumption and environmental problems have led to the creation of sustainable development initiatives. The presence of a pandemic has further strengthened the awareness of the importance of those initiatives to achieve economic growth today without having to exploit the resources of future generations. One way to make this happen is to increase the amount of product material from waste recovery using reverse logistics.

Lambert, Stock, and Ellram (1998) categorized reverse logistics as one of the 14 major logistics activities. Although companies can conduct this activity in-house, the majority of companies outsource logistics activities to third-party logistics (3PL) providers to allow them to focus on their core business activities. In 2017, Allied Market Research and Statista (2020) denoted the global reverse logistics market was valued at US$415.2 billion. By 2025, the reverse logistics market is projected to reach US$603.9 billion, registering a compound annual growth rate (CAGR) of 4.6% from 2018-2025. The size of the reverse logistics market worldwide from 2017 to 2025 is shown in Figure 1.

Figure 1.

Size of the Reverse Logistics Market Worldwide (2017-2025)

978-1-7998-6477-6.ch006.f01
Source: Allied Market Research, Statista (2020), Processed

The leadership of Asia may influence the value of reverse logistics to the world as one form of a circular economy. Ellen MacArthur Foundation (2012, 2013) mentioned Asia which is a powerhouse of consumption and production, has the potential to showcase the circular economy at scale. Asia accounts for around 60% of the world’s population and has become global manufacturing hubs. In addition, 90% of the growth of the global middle class which is predicted to increase from 1.9 billion in 2009 to 4.9 billion in 2030 will come from the Asia-Pacific region which will contribute to an exponential increase in the material impact of the consumer goods industry. Through digital technologies, Stonehouse and Konina (2020) ensured that emerging market companies might become global competitors for established firms from developed countries.

Therefore, this chapter offers reverse logistics as an alternative answer for the logistics industry to face the challenges of the circular economy through the leadership of Asia by digital transformation. This is because Asia has a great opportunity to become a leader. A study by Tan and Hosie (2010) showed that reverse logistics in Asia-Pacific is a growing business. There are certainly ample opportunities for companies in the Asia Pacific to offer reverse logistics services to leverage economies of scale. Sawant and Sonpimple (2019) also reported that Asia-Pacific accounted for the highest share throughout the global reverse logistic market. However, the CAGR is still dominated by Latin America, Middle-East, and Africa (LAMEA). Referring to the global reverse logistics market based on region, LAMEA region exhibits the highest CAGR of 17.9% during 2018-2025 than Asia-Pacific, Europe, and North America.

Key Terms in this Chapter

Digital Transformation: beyond digitalization; a much broader adoption of digital technology and cultural change; business transformation enabled by digitalization; about solving a problem or providing a new approach to customers.

Blockchain: A digital data storage system consisting of many servers. Through blockchain technology, data created by one server will be replicated and verified by another server. Thus, one data with other data will be tied to each other. If one data changes, other data will improve because the information is interconnected and networked. Technically, each block, which is the area that stores all transaction changes, contains a hash which is the identity of digital data from the previous block. When there is an attempt to change data in one block, data in another block must also be changed. This is what prevents the blockchain from various frauds, data modification, and hacking.

Digitalization: the way in which many domains of social life are restructured around digital communication and media infrastructures; the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business; transforming the world of work; the use of digital technologies and digitized data to impact how work gets done, transform how customers and companies engage and interact, and create new revenue streams; strategy or process that goes beyond the implementation of technology to imply a deeper, core change to the entire business model and the evolution of work; enabling or improving processes by leveraging digital technologies and digitized data.

Digitization: taking analog information and encoding it into zeroes and ones so that computers can store, process, and transmit such information; the conversion of analog to digital; internal optimization of processes and results in cost reductions; creating a digital representation of physical objects or attributes; the process of compressing analog media into bits and bytes so that they are available in digital form.

Complete Chapter List

Search this Book:
Reset