How the reverse supply chain enables original equipment manufacturers to compete on low price

Low price is perhaps the most widely present competitive parameter forcing firms to continuously reduce their operating costs. While much literature has investigated how firms can use their reverse supply chain (RSC) processes to comply with regulations or offer RSC-enabled product-attached services, the purpose of this paper is to examine the relationship between the firm’s RSC processes and overall operating costs. The paper asks the question of how a firm’s RSC processes enable continuous operating cost reductions. The paper’s research method combines a literature review of known RSC-enabled cost reduction opportunities with a multiple case study that explores unknown opportunities. The most used cost reduction opportunity among the six firms in the study’s case sample is reducing operating costs by replacing purchasing of virgin materials and internal production with recovery of used products returned through the firm’s RSC.