THE EFFECT OF REVERSE LOGISTICS CAPABILITIY ON COST SAVINGS: INNOVATION AS MODERATOR VARIABLE

Abstract

Facing tough competition in the era of AEC, every company would be demanded to be able to provide high quality products based on customers’ preferences. By managing a good supply chain and performance will lead to better quality of products than before. The supply chain is identical with upstream to downstream problems. Unconsciously, the downstream to upstream also plays a big role in the company; therefore a company should be able to manage the reverse logistics activities. By developing the reverse logistics, it can help the company to elevate their ability to compete in the market, and also minimizing their cost. The factors that affect reverse logistics, thus will also affect to the cost saving. The factors can be broken down into: orientation towards consumers;  opportunistic behavior of consumers; commitment to the resources; contractual agreement; and innovation as the moderate variable. This research conducted to analyze the reverse logistics capability of book publishers in Surabaya. The data were collected from 30 book publishers then being analyzed by using SmartPLS 2.0 software. The result from this research shows that the reverse logistics capability has positive relations towards cost savingsz. Innovation also has strong relation towards the reverse logistics in minimizing costs. Despite the factors of opportunist customers should have negative relations towards reverse logistics, but in fact, it has positive relations towards reverse logistics.

Keywords: Reverse Logistic, Commitment to the Resources, Contractual Agreement, Cost Savings, Orientation towards Consumers, Opportunistic Behavior of Consumers, Innovation