eThesis - School of Business electronic theses

This master's thesis research discusses reverse logistics and pharmaceutical business field both combined and apart. Target is to review the literature about reverse logistics in general and then from pharmaceutical perspective. Also this thesis pursues to find a proper theoretical network, find out how the costs in return logistics are built up and what is the background and destination of returned pharmaceutical products. Reverse logistics has traditionally been very recycling-focused, but here the emphasis is on product which are either reused as such or disposed. Another field of reverse logistics re strategical advantages which it may offer.

Because there is a specific field in the focus, the literature review also gets acquainted with pharmaceutical business field and describes each sector of it. As this field is strictly regulated, a legislative review is provided. Point of view is mostly European, but with retail stores (pharmacies) and end users, Finnish practice and legislation is focused.

The theoretical framework of the thesis is based on previous literature; especially two of applicable theoretical framework for outlining both costs and background reasons of return handling is introduced. The reasons are classified according to the framework.

It was observed that pharmaceutical and food distributing have some common features like perishable products with specific storage condition. There is same earning logic: low margin and big volumes. But it was found out that the philosophy is very different: food retailers take enormous volumes compared to pharmaceuticals, which are ordered often product by product, not by pallets. This makes the reasonable comparison difficult. The costs are discussed, but also it was observed that detailed frameworks are hard to find. Personnel and premises are the easiest to calculate, but other cost factors like transportation of returns are hard to separate. For example IT is essential to properly handled return process, but literature often sees them as hard-to-estimate associated costs.

In future, a more detailed cost analysis would be interesting. Also making return handling process smoother with adequate instruction and sensible procedures would be worth investigation. Reducing returns could be started from evitable misdeliveries. Also benchmarking the field inside Europe and other continents should bring up good practices and share them.