Reverse logistics practices and profitability of large scale manufacturing firms in Nairobi, Kenya

Reverse Logistics is an issue that has received growing attention, above all, in the last \ndecade, given the confluence of several situations. Reverse logistics is becoming a \nkey initiative today, this is due to a number of factors for example, of all the products \nsold, an average of eight to twelve percent is returned. Among the key players in \nreverse logistics are manufacturing firms, NEMA, UNEP and the Council for \nLogistics who play an integral role in fostering reverse logistics practices. With this \nunderstanding, the objectives of this study were: to determine reverse logistics \npractices used by large scale manufacturing firms in Nairobi, Kenya and to establish \nthe relationship between reverse logistics practices and profitability of large scale \nmanufacturing firms in Nairobi, Kenya. The study used a descriptive survey design; \nthe population of the study included all large scale manufacturing firms in Nairobi, \nKenya. The study considered Nairobi because this is where most of the large scale \nmanufacturing firms in various sectors are concentrated and thus providing a \npopulation where a proportionate sample could be derived. The sample size for this \nstudy involved 46 respondents. This was arrived at through a formula developed by \nKelley and Maxwell (2003) as shown below: 0.101=Sample Size/Total population \n(0.101*455) =46.This formula was derived from a series of samples assuming non \nzero probability. The study used primary and secondary data that was collected \nthrough a self-administered questionnaire designed to elicit specific responses for \nqualitative and quantitative analysis respectively. The results of the regression \nanalysis revealed that there was a direct relationship between reverse logistics \npractices and profitability of large scale manufacturing firms. From the results, 52.4 \n% explains the variance on the effect of reverse logistics practices on profitability of \nlarge scale manufacturing firms. The variables in the regression model contribute to \n(R=72.4), 72% level of explanation. From the tests, there was statistically significant \nrelationship between the variables since the p-values of all the independent variables \nfrom the table above are less than 5%.The study concluded that the most popular \nreverse logistics activities conducted most firms is receiving returned product from \ncustomers, while the number of manufacturers that conducted the other activities such \nas remanufacturing, reconditioning, landfill practices and repackaging and even \nrecycling was quite high. The study recommends that it would be a good idea to \ninvestigate the influences of various factors such as government regulations, \nenvironmental awareness or any other factors either as independent or moderating \nmediating variables that can influence manufacturer‟s decision in adopting reverse \nlogistics activities. The limitation of this study was that the respondents were not \nwilling to commit their time to respond to the questionnaires. Most of the respondents \nagreed to participate only on condition that the information will not be divulged to \nany other party other than for academic purposes only