Read the article in the file named 'Toilet PaperArticle'. Using concepts you have learned so far this term, answer the following questions. 1. What do you think was the main cause of the shortage? 2. Why is Toilet Paper Production Capacity so expensive? 3. Did the amount of toilet paper being bought really change? 4. Where do you think the bottleneck is in the Toilet Paper Supply Chain? Defend your answer. 5. If you were the manager of the Toilet Paper business, what would you have done? I For 1 Nu

Read the article in the file named 'ToiletPaperArticle'. Using concepts you have learned so far this term, answer the following questions. 1. What do you think was the main cause of the shortage? 2. Why is Toilet Paper Production Capacity so expensive? 3. Did the amount of tollet paper being bought really change? 4. Where do you think the bottleneck is in the Toilet Paper Supply Chain? Defend your answer. 5. If you were the manager of the Toilet Paper business, what would you have done? As rr mappens, toilet paper really does grow on trees-eucalyptus trees, mostly, in Braxil. Whereas in the US, and Canada trees take decades another assembly line to fill bottles of Tide detergent for under $10 million, an additional paper machine would require an investment of roughly $300 million, explains Skoufalos. Toilet paper machines ran at 99.8% of capacity in March, according to Fastmarkets RISI, up from their normal 92%. Even so, overall US. production increased only 8%, to some 700,000 tons for the month. "This pandemic has revealed the limits of lean supply-chain management," says Bainis Gaarraia. No retailer has taken the just-intime model to more of an extreme than Amazon. Making a profit on one-day and even one-bour delivery depends on socurately forecasting demand. "If A maron lnows they can order on Tuesday and get it literally in their warchouses by Friday, it's totally fine," says Andrea Leigh, a former Amazon executive, now VP of strategy and insights at Ideoclick, an e-commerce optimization company. The tollet paper production conundrum, bowever, has become an unprecedented challenge for Amason, leaving it months behind on orders. Amazon even temporarily stopped allowing some goods into its warehouses altogether, "to prioritize stocking and delivering essential iterns like household staples," CEO Jeff Bezos announced on March 21. But on basics like toilet paper, Amazon earns little profit, if any, even at pandemie-driven higher volumes, says Leigh. (Amaron's additional revenoc on many low-price items "is basically coming at cost," CFO Brian Olsavsky said on a recent earnings call. Amnzon declined to comment for this story) And unprofitable as it is to sell, not selling toilet paper comes with a customer-service cost. The fact that Amazon cannot deliver Charmin for over eight weeks in a row shows how pathetic it is," says Burt Flickinger, managing director of the consultancy Strategic Resource Group, and a former P\&G executive. The irony is that with people stack at bome, Amazon is flushing away potential sales of other iterns while it plumbs its TP pipeline. Says Mark Mahaney, Internet analyst at RBC Capital Markets, "Tm sure they must be kicking themselves in the butt: waur nowevska, a San Franciscobased e-commerce excutive, subscribes to toilet paper via Amazon, receiving biweckly deliveries. But beginaing in late February, while his subscriptions to shamp 00 and sosp kept arriving on time, Amazon missed four straight TP shipments. Then, at the end of April, three 24-roll packs of Quilted Northern showed up in the span of a week. Not that it did him much good by then. We went out to the store and bought toilet paper. 1 don't suddenly need, like, two months' worth" he says. Nowinski's experience provides a glimpse into how the shortage is constipating companies behind the scenes. Because demand still exceeds production capacity, TP is "on allocation," meaning retailers are getting only a fraction of the amounts they've ordered-a measure generally applied only to the season's hottest toys or games. Since Amazon prioritizes subscriptions, says Leigh, delayed shipments suggest it hesn't gotten enough TP to fulfill even orders placed lang before the pandemic. Facing a similar problem, Costoo has decided not to sell TP online for the time being. "We bave chosen to keep our warehouses in stock as best as we can," Bob Nelson, Costeols seaior vice president of finance, tells Forture. What no business wants is to be stuck with mounds of rolls when buying finally slows. (Consumers in pricey cities can relate. Says Nowinski, We pay $5 a square foot a month in reat-1 don't want to be stocing all this toilet papec.") "You can build supply chains that are 100% resilient to all sbodo," Guarnia says. "But the annlogy I use is you cas build a car where if you have an accident you would never be hurt, bat you would never want to drive that car" Still, manufacturers are adapting to the likehihood of prolonged higher demand as people wotk more from home. Afer leaving the office that March Priday, Kimberly-Clark's Mastorides spent the weekend deciding which kinds of TP to stop producing-cutting 'SKUs" by at least half. The company has focused on sixpacks of Coctonelle "mega rolls" versus 12-packs; that keeps plants from having to stop the machines as ottec to switch out muterisls, minimixing downtime. Some variants likely won': return post-pandemic - 1 think weII have a very different assortment as we exit this", Mastorides says. Over at PSG, after two months of record-breaking production, Nemeth's tesm is implementing lestons learned from the crisis. "We are turning those into essentially a reengineering of our supply chain," Nemeth says. Having adapted its operations for altra-predictable demand, P\&G is now redesigning them for "a significantly more volatile ervironment." That inclodes fast-trncking onboarding for new suppliers, adding distribution sites, and uring data to generate earlier demand-shock warnings. The necessities of social distancing have also helped P\&CG realize it can staff plants moce efficientily, by spreading workers across more shifts. Even desk workers have lately pitched in ca factory floors. After all, shortages have chafed Charmin executives as much as they have the rest of us 1 buy my toilet paper where anybody buys it," says Nemeth. Unless, of course, it's sold out. says. Thath a very unsetting thing" indeed, that week will be remem. bered for the Great Toliet Paper Panie of 2020 . The previour day, March 12, TP sales had ballooned 734% compared with the asme day the previous year, becoming the top-selling product at grocery stores by dollar spent, according to NCSolutions, which tracles consumer parlaged goods (CPG). As shoppers prepared to hunker down at home indefinitely to avold the coroeavirus, they wiped Amavon, then supermarkets across America, clean of the bathroom bacic. People might need as much as 40% more tollet paper at home for "occasions" (as the industry calls them) that would otherwise hippen at workplaces, restaurants, or hotels. But they bought far more: Sales were vp nearly 71% year over year in the nine weeks throngh May 2, according to Nielsen. They would have risen even higher-except that people can't find enough toilet paper to buy. At first, experts waved off concerns about shortages. A Wall Street Journal editurial on March 22 declared, There is one fear we can alleviate: the idea that America is running out of toilet paper." But much of America did, in fact, run out. By March 23, toilet paper was out of stock at 70% of US. grocery stores (including online sellers). When even body forwardbuys, then you do create a shortage. Perception becomes reality, says Pete Guarraia, who heads consultancy Bsin's global supply-chain practice. Some two months into the pandemic, the white stuff remains scarce. All types of Charmin are indeinitely "unavailable" on Arraroncom; Costeo has suspended TP shipping "due to limited supply" "It's not like there's troves of it sitting in warehouses that we didn't get to stores," says Dan Toporek, a spokesperson for Walmart. There's just truly such high demand it's hard to bave in stock anywhere:" Major companies are now absotb- By Jen own products. "A long gondola shelf that's completely empty of buthroom and facial tissue, I never in my life thought I would ever see that," he Major companies are now absotb