International Journal of Business and Management Invention ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X www.ijbmi.org || Volume 5 Issue 10 || October. 2016 || PP—53-58 www.ijbmi.org 53 | Page Reverse Logistics Performance Indicators: A conceptual Framework for evaluating reverse logistics services Panousopoulou Pagona a , Manthou, Vicky b a Ph.D, Department of Applied Informatics, University of Macedonia, Egnatias 156, 54006, Thessaloniki GREECE, E-mail:peggy@uom.gr b Professor, Department of Applied Informatics, University of Macedonia, Egnatias 156, 54006, Thessaloniki GREECE ABSTRACT : The growing environmental concern worldwide, forced companies to engage in reverse logistics, such as re-use of products and materials, and recycling. Practically, most of the companies deal with returns of some nature because of issues such as marketing returns, damage or quality problems, overstocks, refurbishing, or remanufacturing. Handling returns present a great challenge for companies, while in many cases becomes a necessity for keeping customers’ satisfaction to a certain level. Reverse logistics operations in a supply chain may be considered as an introduction to innovative services of a company’s portfoli o. They may have an important impact on a firm’s strategic performance in terms of market effectiveness, as well as, internal cost efficiency. Through reverse logistics innovation, it may be possible to expand revenue through market growth due to account customization, service augmentation, and improved customer satisfaction. Reverse logistics is becoming an area of competitive advantage. At the same time the drive for `total quality control' has strongly enhanced the interest for performance indicators in many companies. Introduction of these indicators has begun to be of great importance for many products and services too. Performance indicators are the criteria with which the performance of products, services and production processes can be evaluated. Besides, performance indicators are operationalized process characteristics, which compare the efficiency and effectiveness of a system with a norm or target value. Performance Indicators (PIs) provide management with a tool to compare actual results with a pre-set target, and to measure the extent of any deviation. This tool is extremely important for forward logistics, as well as, reverse logistics. Reverse Logistics metrics are essential to managing and improving a Reverse Logistics operation, both for companies and third party Reverse Logistics service providers. Performance indicators are something new in many business areas, and in the field of Reverse Logistics is something that hasn’t been discussed much in the literature. In order for companies to be able to assess the success of reverse logistics channels or reverse logistics chain, performance indicators need to be identified and evaluated. Innovative reverse logistics services combined with these metrics, lead to a more responsive organization. The aim of this paper is to develop a framework which will define the metrics that can help to develop successful Reverse Logistics operations. Keywords: innovative services, reverse logistics, performance indicators, quality metrics. I. INTRODUCTION Necessity of performance indicators in Reverse Logistics During the last decades the diffusion of environmental management techniques along the entire supply chain of a product has become a common way of encouraging improved environmental performance of an industry. Reverse logistics comprehends both the return flow of products, as well as, recovery and recycling activities, the keys to which lie in the generation of profits for companies. Reverse logistics also include other alternatives with this same goal: repair, renovation and reprocessing. Stock et al. (2002) argue that reverse logistics should not be viewed as an extra cost to standard business operations. Instead, they propose that reverse logistics – including the remanufacturing, refurbishing, recycling, reuse, or disposal of goods – should be seen as an opportunity to build competitive advantage. Efficient reverse logistics have the potential for significant positive bottom-line economic contributions, as well as, yielding customer service-related benefits (Rogers and Tibben-Lembke, 1999). Reverse Logistic services include customer satisfaction, inspection of reverse logistic activities, repacking, relabeling, restocking, warehousing, repricing as used/overstocked or renaming products, financial credit processing, visibility, and transport of products (Fleischmann et al., 1997, Meade et al., 2007). The value of reverse logistics services strongly influence the performance of the supply chain and therefore, reverse logistics services need to be measured through the use of proper indicators. Performance indicators can be recognized in almost any activity that can be measured: it is sufficient to agree on a certain performance and see to which extent this is realized. Metrics are needed to evaluate how work is done and to direct the activities, since what is been measured indicates how companies intend to deliver value to our customers (Ritchie, 2000). Incorrect performance measurement systems can create disincentives and unwanted behaviour. Measurement of the performance of various logistics functions (internal and external) should focus on time, quality, availability,