‘Don’t panic,’ Philadelphia-area manufacturers say as they brace for coronavirus

With a smattering of coronavirus patients now confirmed in the Philadelphia region, area CEOs have stepped up their preparations to deal with potential worker absenteeism, supply-chain disruptions, and impact to the bottom line.

Some, however, worry that panicking about the virus could cause more economic harm than the virus itself.

“We’re concerned that the scare itself may delay sales from companies afraid to make decisions on purchases,” said David Fryer, controller with Wayne Automation, a manufacturer of packaging equipment that is headquartered in Norristown.

Kreischer Miller, an accounting firm based in Horsham, Montgomery County, asked Wayne Automation and 21 of its other manufacturing clients last week about their plans to cope with the impact of coronavirus in a “pulse survey.” The results were posted on Friday.

“A large number are either in the process of or starting to do some serious planning around it,” said Michael A. Coakley, a director with Kreischer who leads the firm’s manufacturing group. “It is imperative that we understand the challenges and opportunities that face our clients, and we wanted to get a quick sense of their thoughts and concerns.”

Nearly 73 percent of the respondents believe the virus will affect their supply chains. About 14 percent said the impact would be “significant.”

“This could delay the production and supply of critical pharmaceutical ingredients coming from Asian manufacturers,” said Rick Kremer, a vice president with Sigmapharm Laboratories in Bensalem.

The majority of the manufacturers surveyed are working up contingency strategies for their employees.

“The plans are to keep employees out of harm’s way,” Coakley said. “If they’re feeling sick, or have come in contact with someone who is ill, they have to stay away from other employees or figure out a way to do their work remotely.”

Administrative staff can work remotely, and many already are, said Pat Foose, president of Gehr Plastics USA, a German manufacturer of engineered plastic products. Gehr — which also has operations in Hong Kong and India — employs about 50 people at a plant in Boothwyn, Delaware County.

“But if one of our employees comes down with the virus in the manufacturing plant, I’ll have no other option but to shut it down,” said Foose. “The administrative functions I’m not worried about. However, I can’t run the machines remotely.”

Coakley, who commissioned the survey, is advising his clients to start preparing for the next disruptive event, ensuring that business infrastructure is robust enough to endure another shock and making certain that key people can step up “to keep the engines running.”

“We’re already practicing what we preach,” Coakley said. “We’re making sure that our [computer] system can handle everyone working on the virtual network. And we’re testing that right now to make sure the system can sustain the physical load.”

Foose urged his fellow CEOs to “take a prudent approach.”

“I think we need to be cautious, to look at all the data, and have plans in place. But from where I sit, there’s a lot of overreaction,” Foose said. "At our facilities, we’re stressing the hand washing and other necessary things we should be doing on a daily basis anyhow.

“I’m saying let’s continue to discuss the best practices, but let’s not overreact,” Foose said. "For the moment, we’re fine. Our German counterparts are in a little bit more of a panic.

“It’s not that I’m not concerned. But I think we have to take it day-to-day and see where this thing goes. The more you know, the better you will be with making decisions.”