PLEASE ANSWER AS A TEXT. DON'T WRITE ON APAPER.
Read the article below and answer thequestions.  Your answers should be written to address thequestion in a report format not questions and answers format. Therubrics for assessment is given below.
- Explain how the corona virus affect the supply chain infood industries starting from supplier, manufacturing anddistribution.
- Explain how the uncertainty in demand and supply isaddressed in the article
- Explain the solutions the article suggested to mitigatethe uncertainties in the supply chain due toCOVID-19.
As the coronavirus crisis deepens in Europe Bo Zhou, CEOof supply chain software specialist FuturMaster, shares insightsinto managing the crisis and lessons learnt from keeping the cogsturning in China. \"Everything that seems normal everyday becomestotally impossible.\"
The food supply chain in Europe is coming under increasingpressure. On the one hand, manufacturers and retailers arestruggling to meet a sudden jump in demand. On the other, they mayface new transport and distribution restrictions designed to stopthe spread of the disease. While the European Commission hasintroduced measures, such as dedicated lanes, designed to keep goodflowing between member states, food industry associations havereported delays at the boarder that impact fresh foods inparticular. Labour shortages and forced factory shutdowns should beexpected.
According to Bo Zhou, chief executive of A1 planning softwareprovider FuturMaster, 'many' of the company's clients in Europe are'worried about the impact on their supply chains'. The companycounts the likes of Warburtons, Haribo, Bonduelle and Yoplait amongits European customer base.
Covid-19: Prepare with forecasting andsimulations
FuturMaster has operations in China, where 'huge' disruption wascaused to businesses after the onset of the coronavirus crisis.Official data shows Chinese exports in January and February weredown 17.2% year-on-year. For one of FuturMaster's beveragecustomers saw February sales plunge a massive 80%.
According to the tech company, there is still a 'lot oftrepidation' around consumer demand - not least because newconfirmed local transmission has started again after the fulllockdown put a pause on the spread of the disease. The World HealthOrganization's latest status report reveals 103 new cases wereconfirmed in the country, all due to local transmission, on 23March.
What are the key demand trends that FuturMaster has witnessed?Short-term demand from end-consumers has fallen sharply. Due to somany people being quarantined at home, the geographicaldistribution of demand has also changed. A lot of demand hasshifted online. Understanding how demand is likely to evolve willbe crucial if the food industry in Europe is going to meet theneeds of citizens, Zhou believes.
\"During times of such uncertainty, every company needs to makesimulations on how demand may evolve and if and how they cansatisfy this demand based on their production and warehousecapacity.
“You also need to closely monitor which transportation routesare cut, or how many workers will be unable to show up at varioussites due to lockdown. For many companies in China, the problemswere compounded because they don't have the technologies to supportthese simulations; so they were unable to anticipate demand andsupply by looking at multiple scenarios,\" Zhou noted.
Grappling with food shortages and emptyshelves
Panic buying - where many European supermarkets have worked toempty shelves due to stock-piling - is likely to test suppliers 'tothe limit'. But spikes in demand are not the only problem foodmakers in Europe will face.
According to Zhou, sourcing materials may not be the biggestproblem on the supply side. Companies will also have to contendwith reduced production and warehousing capacities due to labourshortages. When one worker tests positive, the whole team has to beput into quarantine.
Moving products around can turn out to be an issue as well,especially when transportation routes are affected due to borderclosures. This has clearly been an issue in China. According to arecent McKinsey report, trucking capacity to ship goods fromfactories to ports is operating at around 60-80% of normal capacityin the country. This has resulted in goods facing delays of around8-10 days.
\"During the crisis, companies need to produce more with reducedresources. This is made possible by optimising the production byreducing set-up times. Manufacturers also need to produce moreefficiently: having updated demand planning data allows you toproduce only what is most in demand and profitable,\" Zhou said.
\"Anticipating ahead - by doing simulations - enables companiesto be better prepared. Being able to react in an agile andefficient way is vital for coping with any crisis situations. \"
FuturMaster case study: A 'major' bottled water supplierin China
China consumes more bottled water than anywhere else in theworld: around 25 billion
gallons a year, according to the IBWA trade association, whichaccounts for more than a
quarter of the world's volume.
One of the largest suppliers of bottled water to China - whichdid not want to be named - has been able to avoid 'severe' stockshortages using FuturMaster's 'sophisticated' supply chain
planning technology to help anticipate and respond quickly tothe emergency, the tech group revealed.
The water company has 'numerous factories' it can leverage toadjust capacity based on forecasting of demand and market supply.It was also able to determine which products should be prioritisedby taking into account stock on hand in each warehouse andavailable production and distribution capacities.The timing of thecrisis was interesting. Most factories in China were alreadyscheduled to close for a week over the Chinese New Year. At thistime, coronavirus cases were threatening to bring Wuhan (where theCovid-19 virus outbreak started) to a standstill. A team ofplanners at the water supplier were already gearing up andpreparing for various possible closures as news of new lockdownsspread. So it looked at the areas likely to be most affected andwhere else it could produce, and at what capacity. UsingFuturMaster's system to make an updated plan for the supplynetwork, the supply chain team tracked traffic restrictions andcollected information from local managers to understand labourforce trends. \"It ran simulation after simulation. It came up witha plan A, B, C, and so on. This foresight and planning meant thatit was less likely to be taken by surprise and resulted incontinued supplies to almost everywhere.\"
FuturMaster's A1 allowed large amounts of data to be collectedand interpreted, Zhou explained. Modelling different scenariosallows the company to come up with solutions - for
instance, shifting production capacity to different locations tocope with factory closures and transportation disruptions.Importantly, this was achieved at speed.
\"In times of extreme uncertainty and volatility in demand,digital technology can certainly make
sense ofa multitude of data, quickly and optimally. Thisrequires a supply chain planning too
that's highly flexible and data-driven. Ideally, you need to beable to manage as many variables as possible to get more accurateforecasts on demand and optimise the supply accordingly. It's
something that would normally take days to do manually. And amachine is often much better
than humans at crunching numbers and making decisions from wadesof information. \"
Managing disruption and re-thinkinglogistics
Zhou does not downplay the level of disruption coronavirus willbring to food and other businesses in Europe. \"Everything thatseems normal everyday becomes totally impossible,\" he stressed.
\"For many businesses, you might need to find another logisticsnetwork. You have to focus on where's the best factory that you canproduce in and look closely at costs and feasibility. All thenormal variables that supply chain planners use on an everydaybasis become uncertain and questionable. But you can act withforesight to mitigate risk.
\"In times of panic - and against a backdrop of empty shelves -some digital technology can be used to avoid a crisis. Digitaltechnology can help make better decisions afterwards and prioritisethings whenever there's a choice to be made,\" added Zhou.
