Edition 84
Reverse logistics of Southern Italy-between green opportunities and problems
by Vesselina Dimitrova, Deputy Chief, Department of International Economics Relation, University of Economics-Varna

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This article is an overview of the author’s observations for the implementation of reverse logistics in different industrial sectors of Southern Italy. The text reflects both the challenges for green initiatives in logistics and their potential for reverse logistics activities.

Many experts believe that if today’s logistics managers do not view the reverse logistics as a process that affects positively their profitability, they have no strategic vision
about logistics and supply chain management as a whole. Green supply chain normally is developed both in forward and in reverse directions, so it is part of the so-called Integrated Logistics in order to strengthen the policies of green manufacturing and sustainable development. The objectives of the green supply management are associated with improving the environmental performance of companies and industries by reducing their environmental risk. What are the reasons for the development in reverse logistics?

First, the global business increases the volume of goods returned by customers. This leads to the need to find secondary markets for the reallocation of these products and to study how to introduce eco-innovations in the production chain. Other important factors are the
laws and regulations in the field of ecology that are part of both the European and US business practices. The observations of laws and regulations require higher attention from the companies to the implementation of adequate green supply chain management at the end of the product life cycle. Furthermore, the consumers are increasingly demanding environmentally friendly products and they are always more interested in a green “brand” of a company. Other reason is that raw materials and natural resources are becoming increasingly scarce and more expensive and, therefore, the companies have to seek alternative solutions through reusing, recycling and repackaging. Those that have good green supply chain strategies reduce the harmful effects to the environment.

Italy, the country of our study, invests in green technology, implements eco-standards and innovative systems for sustainable development. The Green technology Report, 2014[1] highlights that, more than 70% of Italian companies allocate economic resources for developing sustainability technologies but only 27 % of them have a specific budget to invest in it. Furthermore 60 % of companies have adopted green practices as ISO certification, ecodesign, LCA (life cycle assessment) and roughly 65% have adopted green practices in purchasing.

From the report emerges that, environmental policy is linked to specialized strategies and programs organized by public authorities, trade chambers or industry associations in each region. In this way it is possible to encourage SMEs in developing various environmental policies and standards. All these circumstances outline good prospects for export-oriented sectors in North and South Italy. Italy takes a leading position in the European Union in recycling diverse components and raw materials by certified companies. In Southern Italy this practice is subject of an outsourcing agreement.[2]

Our study on sustainable logistics practices in different sectors in Southern Italy, by Dimitrova, 2017[3], indicates opportunities and problems. Manufacturing SME companies reveal tangible problems for reverse logistics- in communication or in using software, but also intangible opportunities as green image and outsourcing to specialized companies. We observe relatively little interest for reverse logistics practices in South Italy. This is because, a weak visibility of green supply chain management as a competitive advantage, affects both quality and customer satisfaction. Reverse logistics seems an area that is disregarded by business despite the positive effects highlighted in literature for the overall supply chain management and its impact on ecology. In conclusion, reverse logistics difficultly becomes green, although there is potential for stronger sustainable development[4, 5].

Our observations show that there are different criteria to evaluate reverse logistics in South Italy. There is a good performance but also many undeveloped practices as ISO certification or environmental sustainability report and so on. These green practices normally are pushed by several drivers: customers, competitive advantages, international standards and regulations. However, we observed different concerns in realizing reverse logistics: a) scarce knowledge of the above green outputs/results, because the internal staff expertise in green practices (as environmental manager) is missing; b) educational and qualification level on reverse logistics are big challenges for many companies in Southern Italy; c) reverse logistics is considered as a huge cost that is difficult or even pointless to be calculated or managed.
Data on reverse logistics costs are normally confidential information or cannot be calculated by the companies. An inability to model environmental management accounting (EMA) methods for reverse logistics costs and limited capacity for handling returned goods determine the weak diffusion of reverse logistics. The imposed international practice to outsource also EMA practice to specialized companies is not applied. This means that the positive assessment of reverse logistics recorded in literature for environmental sustainability, possible cost reductions and continuous corporate improvement are underestimated in South Italy. Furthermore there are no special reverse logistics programs or innovative IT services, funded by public or private authorities, to be actually implemented.

Any case, positive aspect emerges by the willingness of companies operating in South Italy to strengthen cooperation with partners in the field of reverse logistics and to increase their knowledge. The situation is the same in terms of IT opportunities in manufacturing, distribution and customer service. It is estimated that this situation gives a huge potential and will allow clearly pointing the role of suppliers, distributors and retailers in reverse logistics activities.

There is no general recipe for success in green initiatives including a proper conduct towards reverse logistics process. We believe that the good achievements in terms of ecolabel, EMAS and ISO 14001 standards should be a foothold for the promotion of a comprehensive green policy in Southern Italy. The enterprises in the South part of Italy, which realize its importance, have an option for higher competitiveness in global markets.

[1] Energy&Strategy Group (2014) Green technology Report- la sostenibilità come vantaggio competitivo: stato dell’arte e nuovi sentieri di sviluppo in Italia
[2] Unioncamere e Fondazione Symbola (2014), Green Italy-nutrire il future, Rapporto 2014
[3]Dimitrova, V. (2017, in press) Green opportunities and problems of reverse logistics, Science and economy publishers
[4] Stecca, G. (2015) Methods and tools for closed loop supply chain and reverse logistics, Logistic Integrate, Consiglio Nazionale delle Ricerche
[5] Green logistics- improving the environmental sustainability of logistics (2015) edited by A. McKinnon, M.Browne, M. Piecyk, A. Whiteing, 3rd edition, Kogan page
*Vesselina Dimitrova has been teaching at the University of Economics – Varna (Bulgaria) since 2000 and became an Associate professor in 2009. She is Deputy Head of the
Department of International Economic Relations. She holds a PhD degree in World economy and international economic relations. She has specialized in Savoy University of Annecy
(France) and University Aldo Moro -Bari (Italy). Assoc. Prof. Dimitrova has a course in \"International Logistics\" at the University of Economics -Varna and is a scientific consultant
of different EU programmes and projects as Interreg, IPA, Citizens, EEA grants, Tempus, CEEPUS etc. She is a member of the international editorial boards of Emerald and
Inderscience Publishers and cooperates with the Bulgarian National Radio - branch of Radio Varna, Varna Municipality and Apulia region.During her professional experience, Assoc.
Prof. Dimitrova has over 55 publications with 20 citations in SCOPUS with h index. Other research interests are in the field of green logistics and sustainable cultural events.

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