Some of the possible benefits include improved partner retention and satisfaction through the liberalization of returns policies, increased flexibility and agility through management by exception, and streamlined credit processing through the implementation of damage and defective percentage off-invoice initiatives.
PEST analysis has been used here to review the external factors that influence the reverse logistics business in India.
Political
Indian government has started allocating funds for the development of industries and below are some of the investment activities that act as main drivers:
• National Highway Development Project
• Special economic zones for development of Logistics parks. (Mumbai, Kolkata, Chennai and Hyderabad)
• Implementation of Extended Producer Responsibility as part e-waste management law
• Over all government spend has increased from USD 10 billion to 30 billion and is expected to rise in near future in the form of infrastructure projects and special economic zones
Economic
Government economic policies always play a vital rule in the growth of the industry and below are some points that would enable the logistics industry growth inIndia:
• The much-awaited implementation of the nationwide uniform Goods and Services Tax (GST)
• End of indirect tax regime after implementation of GST. Other tax reforms like VAT
• Low margins leading to underinvestment and risk aversion
• Growth in GDP and trade are the core drivers
It is not only sufficient that governments bring in laws, they also need to make sure they are enforced appropriately. For example, Goods and Services Tax (GST) which was scheduled to become effective from April 1, 2010 has been delayed by the Union Government due to non-agreement of several State governments.
Technological
Some of the technologies influencing the reverse logistics industry include:
• Basic inventory management packages and barcode systems
• Warehouse management systems
• Radio frequency identification
• Web enabled communications
• Transportation management systems
As of 2014, only about two-thirds of the end users reported to using some form of technology solution to support their logistics functions. Usage of exclusive logistics technologies is significantly low across industries. India’s logistics technology market is set to grow at 19.8 percent between 2010 and 2015, to cross $ 600 million by 2015. This growth is driven by demand from the thriving logistics, retail and manufacturing sectors, as well as government promotion. However, these technologies are highly expensive, making them unaffordable for majority of logistics service providers and end users, thus limiting the full potential growth of the Indian logistics technology market.
Implementation of GST is also expected to revamp the supply chain process and logistics infrastructure for majority 5 companies in each industry.
Social
Currently there is less evidence of any highly active social organizations involved in playing a role for the e-waste management or creating awareness except for a non-profit organization called Indian environmental society (IES).IES focus is not only on e-waste but focuses on overall safeguarding of the environment like from industry pollution, cleanliness and so on. Creating awareness among societies is real indirect catalyst for the promotion of reverse logistics and this would require more focus from the government as well as non-profit organizations.