Summary
The article by Zhang and Xiong (2017) , is an important academic research in the field of operations and logistics within the supply chain management. In this area, the problem of information sharing on demand forecast particularly in a closed-loop supply chain. The authors assume that in such cases the manufacturer does the collecting and re-manufacturing of the products ( Zhang & Xiong, 2017). The closed-loop supply chain is a common practice in the modern implementation of manufacturing practices where there are two possible approaches that the manufacturer may employ: make-to-order and make-to-stock ( Zhang & Xiong, 2017). In the first approach, the manufacturer is seen to schedule the production of an item based on the realized demand while in the latter, production is usually scheduled without knowledge of the demand in the market. Each scenario is integral to understanding the effectiveness of operations and logistics practices in realizing profitable business ( Zhang & Xiong, 2017). Leaders within this department are expected to identify measures that would be most suitable to the manufacturer.
The retailer in this closed-loop supply chain plays a critical role in influencing the profitability of the manufacturer. In each scenario, the retailer is able to share the information on demand forecast with the manufacturer. For instance, when the manufacturer demonstrates high collection efficiency, the retailer is able to share information of the forecast without seeking incentives ( Zhang & Xiong, 2017). In a moderate form of efficiency, the use of a bargaining mechanism can be used to achieve information sharing. However, when the manufacturer demonstrates a low collection efficiency, a unique equilibrium of non-information sharing is achieved ( Zhang & Xiong, 2017). In majority cases, retailers usually provide the manufacturers with information on demand forecasts when the latter incorporate a make-to-stock approach of production. The uncertainty of the demand in the market requires the critical input of the retailers ( Zhang & Xiong, 2017). The value of information sharing in each scenario significantly increases when manufacturer’s forecast is inaccurate during make-to-order scenario or when the retailer provides high precision, or during during a decrease in forecast relation.
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Impact of Study to a Logistics Manager or Operations Supervisor
The above article is of particular importance to the activities of a logistic manager. The modern business environment has seen the appeal to engage in high levels of sustainable practices where production processes should achieve minimal negative impact on the socioeconomical and ecological factors ( Zhang & Xiong, 2017). The closed-loop supply chain is one of such factors that incorporates the traditional forward logistics and the reverse that include collecting and processing of used and unused products or parts of products. The research by Zhang and Xiong (2017) , shows the critical importance of this production in achieving an effective relation with the retailers of the specific products. In this regard, a logistics manager who can effectively carry out the reverse logistics with high level of efficiency is likely to encourage information sharing with the retailer ( Zhang & Xiong, 2017). The approach may help the manufacture reduce the costs incurred during future production and achieve acceptable profits.
The closed-loop supply chain as reported in the summarized article, helps improve the responsibilities of the operations supervisor. In this case, the there are two different scenarios that manufacturers may employ make-to-order and make-to-stock ( Zhang & Xiong, 2017). However, the research study indicates that in the latter case is where retailers are more likely to offer demand forecast to manufacturers ( Zhang & Xiong, 2017). The operations supervisor may opt to change strategy to effectively incorporate the information shared. For instance, if the organization has been incorporating a make-to-demand approach without success, the value of information shared on demand forecast may be quite important to maximize use of raw materials and minimize waste ( Zhang & Xiong, 2017). The importance of the study is evident where the errors made previously in production are corrected leading to significant increase in the profits earned.
References
Zhang, P., & Xiong, Z. (2017). Information sharing in a closed-loop supply chain with asymmetric demand forecasts. Mathematical Problems in Engineering, 2017 : 1-12. Retrieved from https://union.discover.flvc.org/ux.jsp?fl=ar&st=Current+events+in+operations+and+logistics&ix=kw&fl=ar&sj=1&ft=1&so=pn&fa=subjecttopic_facet%3ASupply%5C+Chains%5C+%5C-%5C-%5C+Management&V=D&S=1371557715028478&I=2#top
