Reverse distribution systems are an empirically interesting and relevant phenomenon. A number of reverse distribution systems have been established in Norway, as the Norwegian government has been at the forefront of working with sustainable development. The government has given increased responsibility to the actors in trade and industry to find ways to handle waste products'. A specific outcome of this has been that the government has entered into industry agreements with industry trade organizations, where trade and industry formally commit to taking on this responsibility.
The cooperation between the industry and government has resulted in the establishment of waste management companies. A waste management company is an organization that has been given the operative responsibility on behalf of the industry to manage the industry agreements. Management of the agreements involves setting up collection systems for products at end-of-life and to administer a number of stakeholders that are affected by the agreement, i.e. to manage reverse distribution systems.
We understand 'reverse' as an aggregated term for a research area where products are returned for recovery and waste management. The literature on reverse distribution systems has to a large extent been occupied with clarifying "what reverse is", and have come up with specific definitions for reverse, activities and functions. As reverse issuesare more or less a result of modem consumption, this is not a very old field of interest. The earliest references we have identified are from the 1970s4. A characteristic of the research on reverse issues is that it has often departed from knowledge on 'forward' issues, which are about bringing products and services to end-consumers. Ithas also been identified that such an approach is fruitful (Fleischmann et. al. 2000). In line with this approach, we depart from the literature on coordination in forward distribution systems when we investigate coordinated action in reverse distribution systems.
The theory on coordination is taken from literature on distribution systems and, as already mentioned, we have identified some challenges in this field of research. Flows have been categorized into three main types of physical, ownership and information (Gripsrud 2004),
3Producer responsibility.
4Note that we focus on research in business, management and administration.
each of which constitutes a part of the total flow in a distribution system. However, itis also argued that the literature on coordination is fragmented because the flows are studied separately (Gripsrud 2004). In this thesis, we want to understand more about coordination across these flows. We particularly seek to bridge a gap between research on physical and ownership flows.
Why is it relevant to make such a contribution? The physical flow is a significant part of a (reverse) distribution system. However, in the distribution channelliterature it is not viewed to be a part of the channel (Rosenbloom 1995). Rather, the ownership flows are viewed as defming the channel, while the physical flow is viewed as facilitating the ownership flows.
However, the physical flows may indeed take different paths compared to the ownership flows. This is particularly relevant in reverse distribution systems, as the collection activities can be separated from the producers who are responsible for the products at end-of-life. For example, the end-consumer can return products at end-of-life to locations other than those of the original manufacturer and retailer, i.e from where the product was bought originally. In this manner, there is a distinct division between the flows. It is not obvious that the coordination of the ownership flows automatically achieves coordination of the physical flows.
Distribution systems have become more specialized and differentiated (Gadde 2000). An increasing number of actors are involved in distribution systems. The reverse distribution system also shows evidence of such characteristics, not least because two industries are basically merging together. That is, the manufacturing industry for the particular product in question and the waste industry that is involved in the collection system. The complexity of having a large number of actors involved in the reverse distribution system therefore deepens the coordination challenge.
Physical flows are specifically addressed in the logistics and supply chain management literature, where the focus is on activity structures (Lambert et. al. 1998, Persson 1995).Itis a general understanding of this literature that highly coordinated activity structures lead to higher performance than less coordinated activity structures. However, the literature on physical' flows is not clear about the coordination mechanisms that bring about the coordination. We therefore draw upon Thompson's (1967) insights from variations in technology, arguing that the same types of variations underlie activity structures in physical flows. Thompson argues that each technology has a specific logic for coordination, and 4
proposes three coordination mechanisms. The three coordination mechanisms are presented as the coordination mechanisms of the physical flows in our study.
Coordination of ownership flows is addressed in the literature on governance (Heide 1994).
The literature has been particularly successful in explaining coordination of exchange or transactions between organizations, and thus coordination in distribution systems is a particular subset of the area. However, in addition to ownership, transactions often include aspects such as negotiation, risking and fmancing (Gripsrud 2004). Inthis respect, we have categorized these types of flows as commercial interests: Governance mechanisms are implemented in order to coordinate commercial interests in distribution systems. The insight from this line of research is that there needs to be a combination of formal and informal governance mechanisms in order to achieve effective coordination of commercial interests in distribution systems.
The challenge for distribution systems, therefore, is that the different flows are coordinated with different types of mechanisms, and there is limited knowledge on how the mechanisms correspond to one another. Ina bid to gain further insight into coordinated action in reverse distribution systems, we investigate the following problem statement in our study:
How do the coordination mechanisms for physical flows and commercial interests interact in order to achieve coordinated action in reverse distribution systems?
The flows in distribution systems have separate aims and, correspondingly, coordinated action is identified to be a concept composed of several variables. Investigating the specific aims of physical flows and commercial interests leads us to the content of coordinated action for this study. Physical flows are coordinated in order to achieve integration of activities across the distribution system (e.g. Lambert et. al. 1998). Itis assumed that highly integrated activity structures lead to improved performance in the physical movement of products. That is, the integration of activities is a means of minimizing costs in the physical flow at a certain service level (Lambert and Stock 1993). The commercial interests, however, are coordinated in order toalign behavior of the transacting actors in the distribution system. Itis assumed that the exchange leads to higher performance when the actors have agreed on the commercial interests of the transactions. Transactions incur costs and governance is a way of economizing on the transaction costs (Milgrom and Roberts 1992). That is, the more it takes to align behavior and come to an agreement, the higher the transaction costs. Also, the commercial
interests contribute to some level of transaction value (Zajac and Olsen 1999). The coordination mechanisms for both flows contribute tocost minimization for a certain value function (defined for each flow). In interaction, we expect that the means and outcomes of the coordination mechanisms of each flow contribute to system performance in the distribution system. We argue that a well-adapted choice of coordination mechanisms leads to coordinated action in the distribution system.
The goal in reverse distribution systems is to collect products at end-of-life and the system performance, therefore, is reflected in the collection rate. For our particular study, we have identified a context (collection of electrical and electronic-products at end-of-life) where the system performance level is explicit. This is because the Norwegian government expects the industry to achieve a collection rate of 80 %, which is measured against the annual sales (of the electrical and electronic products). Through the empirical analysis of the study, we disclose whether the reverse distribution systems achieve a sufficiently high collection rate, and to what extent the coordination mechanisms of the flows contribute in explaining the level of collection rates. This reflection brings us forward to the methodological considerations of the thesis.