FACULTY OF BUSINESS AND MANAGEMENT

BACHELOR OF BUSINESS ADMINISTRATION (HONS.) TRANSPORT

BA247

SUPPLY CHAIN MANAGEMENT

TPT550

PAIR ASSIGNMENT 2

PREPARED BY:
NUREEN AFRINA BINTI FUAD ZAKRI
2020980527
AHMAD FIKRI BIN AHMAD FADIL
2020336097
BA2473C

PREPARED FOR:
DR. MOHD HAFIZ BIN ZULFAKAR

SUBMISSION DATE:
18 DECEMBER 2020
 TABLE OF CONTENTS

ACKNOWLEDGEMENT 1

1.0 BACKGROUND SCENARIO OF COVID-19 2

1.1 In General 2
1.2 In Economic Perspectives 2

2.0 ECONOMIC SECTORS THAT ARE MOST AFFECTED BY COVID-19 3

2.1 Manufacturing Sector 3
2.1.1 Pharma Manufacturing Industry 3
2.1.2 Food and Beverages Manufacturing Industry 4
2.1.3 Example of Company Affected by COVID-19 5
2.2 Tourism Sector 6
2.2.1 Transportation Industry 6
2.2.2 Accommodation Industry 7

3.0 PARTIES WITHIN THE SUPPLY CHAIN ADAPTED AND MITIGATED THE
PROBLEMS AND CHALLENGES ASSOCIATED WITH THIS PANDEMIC 8
3.1 Industrial Sector 8
3.1.1 Suppliers 8
3.1.2 Distributors 9
3.2 Tourism Sector 10
3.2.1 Services Accommodation 10
3.2.2 Security 11

REFERENCES 12
 ACKNOWLEDGEMENT

Praise be to Allah for making this assignment possible to complete. We owe our
utmost gratitude to the almighty Allah. He specializes in the impossible, empowering
ordinary people like us to accomplish our work. It is with His guidance that we have
completed this assignment.

We are grateful and would like to express our sincere gratitude to our lecturer,
Dr Mohd Hafiz Bin Zulfakar. We could not have completed this assignment without his
guidance.

We are also thankful to our family and friends. It is impossible to extend enough
thanks to our family and friends who gave us the encouragement and support we
needed throughout this process. With their support, we are able to finish this
assignment.

1
1.0 BACKGROUND SCENARIO OF COVID-19

1.1 In General

On January 30 of this year the World Health Organization (WHO) declared the
spread of COVID-19 to be a Public Health Emergency of International Concern (PHEIC)
and then identified it as a pandemic on March 11. The declaration of a PHEIC is the
highest level of warning to be declared but the WHO and is intended to send a powerful
signal to countries that urgent action is required to tackle the spread of the disease, to
mobilize resource to assist-low and middle-income countries in this effort and to support
research and development on the drugs, vaccines and diagnostics that are needed. It
also makes it mandatory for countries to exchange knowledge with WHO.

The virus started to spread worldwide after the PHEIC was announced and WHO
began to wonder why it had not yet declared the epidemic a pandemic. But there is no
widely accepted definition of a pandemic, but it is generally only considered an epidemic
that affects many countries worldwide.

1.2 In Economic Perspectives

The pandemic of COVID-19 has driven the world into a recession. It’ll be worse
than the global financial crisis by 2020. Economic damage is on the rise across all
countries, monitoring the sharp rise of new diseases and government-imposed
containment measures. The first country to experience the full force of the disease was
China. With active cases confirmed to be over 60,000 by mid-February. European
countries such as Italy, Spain and France are now in acute epidemic stages, followed
by the United States, where the number of active cases is rapidly increasing. It seems
that the epidemic is just beginning in many emerging markets and developing
economies.

2
2.0 ECONOMIC SECTORS THAT ARE MOST AFFECTED BY COVID-19

Current pandemic that the world is facing right now has a huge impact on the world and
has disrupted global activities across all economic sectors and industries. The
disruptions are mainly due to the implementation of lockdown by countries from all
around the world to reduce and mitigate the spread of COVID-19. This resulted in
production halts, restriction movement of goods and people, closure of borders,
logistical constraints, as well as slowing down trade and business activities.

2.1 Manufacturing Sector

Manufacturing is one of the key sectors in economic activities. This sector helps
to boost GDP and employment of the country. Manufacturing is the production of
products that involve the processing of raw materials or parts into finished goods that
use human labor, machinery, tools, and chemical processing. The manufacturing
sectors are one of the sectors that is most affected by COVID-19 pandemic and it
disrupted the operation of its supply chain. Manufacturing industries that are most
affected by this are the pharma manufacturing industry, and food and beverage
industry.

2.1.1 Pharma Manufacturing Industry

The outbreak of COVID-19 and the increasing number of people tested positive
for this virus has an effect on the global supply of medical products and puts them under
a lot of pressure due to medical supply shortages. Pharma manufacturing industries
from all around the world rely heavily on the source of materials from China. However,
since the virus originated and started spreading from China, it has affected the
manufacturing industries there. Thus affecting the supply of these raw materials to their
customers from all around the world. Not only that, they are also experiencing shortage
in producing the materials as well since the virus is spreading too fast and the country

3
has to be put on lockdown, which prevents them from producing more materials and
supplying the materials worldwide.
For example, 13 percent of medical products in the United States are
manufactured in China. Meanwhile, in India, Active Pharmaceutical Ingredients (API)
are produced in China, which is the main producer and exporter of API. Because they
are heavily relying on China, the manufacturing industries from these companies are
affected badly by it and especially due to the COVID-19. Besides, the increased
numbers of people affected by the COVID-19 has forced many pharma manufacturing
companies to produce more face masks, ventilators, sanitizers and many medical
related supplies.

To sum up, we can see that the COVID-19 pandemic has an impact on this
industry and it has heavily disrupted the supply chain of the raw materials and parts for
medical products that the pharma manufacturing companies could produce. In addition,
it also indirectly caused the shortage of medical supplies for other countries.

2.1.2 Food and Beverages Manufacturing Industry

Unlike pharma manufacturing companies, food and beverages companies are

experiencing decreases in consumption and supply chain issues. The availability of
these products was disrupted by panic buying. Since the outbreak happened too fast
and many countries are forced to put the country on lockdown in order to slow down the
spread of COVID-19, many people are panic buying and stockpiling the food items as
they fear there will be shortage of food and beverages supplies.

The panic buying has disrupted the supply and inventory management as the
demand suddenly increased. Because of that, the manufacturing companies are not
ready and cannot anticipate the number of demands. Besides, the supply of raw
materials and ingredients to the manufacturing companies are also affected because of
the COVID-19, which has obstructed the production of the products and leading the
manufacturing companies to stop its production.

4
 The problems that are faced by these manufacturing companies can be
described as a bullwhip effect. This happens when demand suddenly increases, which
may lead to an increase in production at the manufacturing companies. What we can
conclude, the food and beverage manufacturing companies are also affected by
COVID-19 because there is an increase in demand and indirectly disrupted the supply
of food and beverage products to its consumers.

2.1.3 Example of Company Affected by COVID-19

The COVID-19 outbreak in Malaysia has a huge impact on the world’s largest
maker of rubber gloves, Top Glove Corp. Top Glove is a manufacturing company that
produces 90 billion rubber gloves per year, which is about one quarter of the world’s
supply. The company exports its products to 195 countries. Due to pandemic, the profit
increases due to increasing demand. However, in November 2020, the Malaysian
government imposed strict movement control orders on Top Glove, and the company
had to shut down their 28 factories in stages to allow workers to undergo screening and
mandatory quarantine. After getting tested, it shows that there are more than 5,000 Top
Glove’s employees who tested positive for COVID-19. Because the company had to
shut down their factories temporarily, it has caused supply disruptions to their
customers from all around the world. According to Top Glove, they expect delays in
some deliveries for about two to four week and longer lead time for orders. To minimise
the impact to their customers, Top Glove are allocating sales orders to unaffected
factories, as well as rescheduling deliveries. As of December 2020, the government
only allowed 14 Top Glove factories to resume its operation, while 14 other factories will
be reopened in stages.

5
2.2 Tourism Sector

Tourism sector is another sector that is affected by COVID-19 pandemic. Every

year, there are many tourists who travel for holiday and work. This sector provides
infrastructure, products and services that can make travelling easier for tourists. There
are many components involved in the tourism supply chain. The products, services and
facilities such as transportation and accommodation that are used by the tourist during
travelling are all a part of the tourism supply chain. However, due to the COVID-19
pandemic, the tourism sector is badly affected by it and it disrupted the supply chain of
the tourism sector since most countries prohibited travellers from entering the country,
imposed travel bans, and closed their borders.

2.2.1 Transportation Industry

Transportation industry is one of the tourism sector components that are badly
affected by the outbreak of COVID-19. Air transport is one of the modes of transport
that is most affected due to the pandemic. As most countries are under lockdown, those
who are already planning to travel abroad this year had to cancel their holidays. Which
leads to decrease in demand. Consequently, they are unable to provide the services
that they could have provided for their customers.

Furthermore, many people are cancelling their flights since most countries are
closing their borders and some countries restricted their citizens from leaving the
country. Because of this, it has disrupted the supply chain of the transportation industry.
Following the decreasing in demand, many airlines industry are unable to sustain during
this pandemic as they have to pay for the maintenance of the aircrafts, the parking for
the aircrafts and many more which leads to increasing debt. Although the aircrafts are
not in use, it is important to maintain them as it will be costly if they are not
well-maintained.

6
 To conclude, in order to curb the spreading of COVID-19, many people are
unable to travel abroad this year because most countries do not allow travellers to enter
their country. Besides, most countries ban their citizens from leaving the country. This
could be a problem if travellers are tested positive upon arriving in the country they
visited as they could spread the virus to the people of that country.

2.2.2 Accommodation Industry

Nearly every industry is affected by the COVID-19 pandemic and the

accommodation or hospitality industry is among those who are affected. Due to fewer
travellers and less people going for holiday during this pandemic, many people are
cancelling their hotel bookings. In fact, in the early months of lockdown, almost all hotels
are vacant. Many hotels had to lay off their workers, some were on unpaid leave and
others took pay cuts because they are unable to pay their wages.

Just like the transportation industry, the accommodation industry is also facing
the same problem, which is a decrease in demand. The travelling ban leads to less
tourists and travellers which then disrupted the services that they could have provided
for their customers that would be staying at their hotels, and the whole accommodation
industry supply chain. Because of that, most hotels had to permanently shut down as
the impact of the COVID-19 is too hard to bear.

The current pandemic that we are facing right now is not likely to end soon. In
fact, we will never know when it will end. From what we can see, the COVID-19
pandemic has a huge impact on the economic sectors, especially the sectors that have
been discussed. The supply chain of these sectors are also heavily disrupted by it. It's
like a domino effect, and everyone is struggling because of this pandemic. Just like how
the accommodation industry had to lay off their workers and shut down their hotels
because there was less demand.

7
3.0 PARTIES WITHIN THE SUPPLY CHAIN ADAPTED AND MITIGATED THE PROBLEMS
AND CHALLENGES ASSOCIATED WITH THIS PANDEMIC

A supply chain is a collection of manufacturers, suppliers, transporters, warehouses,

distributors and customers and all functions directly or indirectly involved in order to
meet customer requirements in each company depending on each sector.

The debate over the optimization of supply chains has mainly focused on cost
effectiveness and the best commercial results over the past decades. Future supply
chains will, however, need to begin factoring resilience and adaptability into
calculations, as recent history has shown. Some companies began trying to predict this
next progression prior to the Covid-19 pandemic, but this catastrophe has exposed
those weaknesses in the modern supply chain, so many are looking at what to do next.

3.1 Industrial Sector

For the industrial sectors, those companies involved in manufacturing and

distribution at every stage of the production process, from the purchase of raw materials
to manufacture and packing. Its comprehensive skills cover all aspects of manufacturing
and supply, which include order fulfillment, item quality control and efficiency in
production. For example, suppliers, distributors, producers and distributors and
customers are considered to be various parts of the supply chain of the company.

How the parties within the Industrial sectors adopted and mitigated the problems and
challenges associated with this pandemic is, they:

3.1.1 Suppliers

Suppliers would be the first stage of the chain of supply. In particular, suppliers
are responsible for supply chain purchasing and procurement operations. Suppliers for
whom an industry wants to procure goods or services that are necessary to

8
manufacture a product buy raw materials or natural resources. It must predict the
market demand for its finished product before a company buys raw materials and then
do so, it can prevent material waste and reduce costs.

During this Covid-19, the failure points for the industrial sectors to global and also
to the national supply chain operations, they will have a labor shortage, suppliers are
unable to fulfill orders. The impact is it will slow the output, unaccomplished orders and
it will be an impact of bullwhip effect. By cutting costs and seeking debt relief and
compensation from their governments, many are attempting to solve immediate
cash-flow challenges. Employees are put on short-term jobs and are asked to take
leave in order to reduce the wage burden. The resulting loss of personal income will
reduce both revenues from consumption and business.

3.1.2 Distributors

Next, the distributor. The companies that take inventory from producers in bulk
and supply customers with a bundle of related product lines. Distributors are referred to
as wholesalers as well. Typically, they sell to other companies and they sell products in
larger quantities that would usually be purchased by an individual consumer. The
objective is to quickly and accurately serve the supply chain. During the situation of
Covid-19, as the new norm continues to change, in order to better predict demand, the
wholesale and distribution industries will need to continue to reevaluate their cost
structure. To help understand the demand for products, this means digging into the
numbers including analyzing each product to track increases and decreases and
analyzing the customer mix as it relates to each product. Some industries have been
very successful during this pandemic, while others have weakened significantly. A
number of businesses, meanwhile are repurposing and e-commerce, many businesses
have also reorganized their companies.

9
3.2 Tourism Sector

For the tourism sectors, there is a combination of sectors such as transport,

accommodation, food and beverages services, leisure and recreation and tourism
agencies. Tourism is a concept driven by demand that is measured by tourist spending.
Although the impact of the Covid-19 lock down on the tourism sector might seem a little
clear, there has been no investigation of the possible effects on its supply chain.

Many components are involved in tourism supply chains, not only

accommodation, transport and excursions, but also bars and restaurants, handicrafts,
food production, waste disposal and infrastructure that supports destination tourism. All
these form part of the travel product that tourists consider when they buy during
holidays, based on performance at all the components of the supply chain of tourism.
How the parties within the tourism sectors adopted and mitigated the problems and
challenges associated with this pandemic is, they:

3.2.1 Services Accommodation

A number of large hotel chains offer their guests 24/7 medical care and provide
guests with these insurance services and agreements as a means of building trust and
trust. Create a comprehensive guide to the actions of the hotel to prevent infections with
COVID-19 and make it easily available on the hotel's website. Convey a social inclusion
message that confronts COVID-19 without distinguishing between nationality, race or
geographical origin. For example, in Malaysia it is allowed to operate but must comply
with the standard operating procedure (SOP) during the conditional movement control
order (MCO). With this way, they can reduce the problems during the pandemics.

10
3.2.2 Security

At the moment, it is important to convey to the guests that they are in constant
contact with local authorities. Create a travel register that records the history of recent
trips by booth guests and employees. Avoid the need for your guests to use public
transport by ensuring transfers from airports and stations, such as these hotels, to
accommodation. Provide frequent, consistent laundry services and establish an internal
laundry protocol for all staff to follow. Laundry and bedding are of vital importance, so it
is highly recommended to review the entire process of cleaning bedding and linens. Use
chemicals that have been recognized by the relevant authorities. These are some which
have already been recognized. They can create a protocol for quarantines or
pandemics. This way they can identify possible symptoms caused by COVID-19.

11
REFERENCES

Chin, C. (2020, October 15). CMCO: Hotels in Selangor, KL, Putrajaya allowed to open

with SOPs. ​The Star.​

https://www.thestar.com.my/lifestyle/travel/2020/10/15/cmco-hotels-in-selangor-kl

-putrajaya-allowed-to-open-with-sops

Hedwall, M. (2020, June 22). ​The ongoing impact of COVID-19 on global supply chains​.

World Economic Forum.

https://www.weforum.org/agenda/2020/06/ongoing-impact-covid-19-global-supply

-chains/

Lee, L. (2020, December 14). Lockdown on Malaysia's Top Glove facilities lifted as first

worker death reported. ​The Edge Markets​.

https://www.theedgemarkets.com/article/top-glove-reports-death-worker-due-covi

d19-first-outbreak-firm

Lockdown on Malaysia's Top Glove facilities lifted as first worker death due to

COVID-19 reported. (2020, December 14). ​Channel News Asia.​

https://www.channelnewsasia.com/news/asia/covid-19-malaysia-top-glove-worke

r-death-13768186

Manufacturing Tomorrow. (2020, July 1). ​Impact of COVID-19 on the Process

Manufacturing Industry; 2020.​

https://www.manufacturingtomorrow.com/article/2020/06/impact-of-covid-19-on-t

he-process-manufacturing-industry-2020/15487

12
PwC Nigeria. (2020). ​Impact of COVID-19 on the supply chain industry.​ PwC.

https://www.pwc.com/ng/en/assets/pdf/impact-of-covid19-the-supply-chain-indust

ry.pdf

Soria, A. (2020, May 21). ​Strategies for The Hotel & Tourism Industry during the “New

Normal” of Covid-19.​ Les Roches.

https://lesroches.edu/blog/strategies-hotel-tourism-industry-new-normal-covid-19/

UK Essays. (2017, May 2). ​Parties Involved In The Supply Chain.​

https://www.ukessays.com/essays/marketing/parties-involved-in-the-supply-chain

-marketing-essay.php

UK Essays. (2017, November). ​Supply Chain Management in Tourism.​

https://www.ukessays.com/essays/business/supply-chain-in-tourism-services.php

United Nations Industrial Development Organization. (2020, October 21). ​Coronavirus:

the economic impact – 21 October 2020.​

https://www.unido.org/stories/coronavirus-economic-impact-21-october-2020

Virus Outbreak Delays Production at World's Top Glove Maker.​ (2020, November 24).

Manufacturing.net.

https://www.manufacturing.net/supply-chain/news/21204340/virus-outbreak-dela

ys-production-at-worlds-top-glove-maker

13