The Reverse Supply Chains of the Fast-Moving Consumer Goods : The Impacts of Product Returns on Reverse Supply Chains in Sweden

Abstract: The unceasing ambition of companies to enhance their profitability, capture novel markets, and address the diverse and evolving needs of customers has led to an irrational surge in production and the exploitative depletion of natural resources. This unwarranted increase in production has, in turn, been accompanied by a rise in product returns by consumers, which, upon reverting to their original sources through the supply chain, has compounded the complexities of the supply chains and precipitated new pressures and burdens on the companies and their supply chains, necessitating their adept management. Likewise, the fast-moving consumer goods sector (FMCG) in Sweden has been experiencing an increasing number of product returns, which is a significant concern for both manufacturers and retailers. This thesis aims to investigate the drivers of product returns and their impact on the existing B2B supply chains to provide recommendations for reducing their impact and frequency. The research methodology includes a review of the previous scientific literature related to the topic, participant observations, and semi-structured interviews with key stakeholders in the industry. A qualitative approach has been adopted using a case study method, and thematic analysis was utilized. The results show that the main drivers for product returns between businesses in the Swedish FMCG sector are quality, contracts, customer service, and legislation, all of which contribute to disruptive effects within the existing B2B supply chains. Furthermore, the study reveals four types of disturbances associated with product returns, including logistical, sustainability, operational, and cost and value-related disruptions. This thesis provides insights into the challenges and opportunities associated with product returns in the Swedish FMCG sector and highlights the need for suppliers to adopt a proactive approach to managing returns to remain competitive in the market.