How are the BFPA members responding to the COVID-19 pandemic and what steps are they taking to maintain production?

24 Mar 2020

Dated: 20th March 2020

Please note that the following document consolidates the results of a member survey undertaken by the BFPA during the week 15th to the 20th of March 2020 and were compliant with the Government advice at the time. Given the pace of change of the current Corona Virus situation latent readers are asked to check that events have not ‘moved on.’

Direct un-edited quotes are provided in blue italics.

General Observations:

All member companies are taking additional steps to comply with Government recommendations around personal hygiene and where possible, social distancing. In some cases, enhanced personal hygiene communications are being issued to staff either verbally or through written memos. Home working has been very widely adopted for non-production staff and, interestingly, appears to have only caused minor interruptions during the change of policy. Example response: “Internally we are practising ‘social distancing’. There are two aspects to this; reducing the number of people in work, and in our larger facility, reducing the movements of staff between different departments. I don’t know the exact numbers for all departments, but for example one team is 100% working from home, and the design team now only have two people in the office. These operational changes have perhaps distracted us for a few days but I believe we are now back up to being pretty much at full speed again.”

Managing similar changes amongst production & manufacturing staff has been far more challenging. One member stated: “Obviously it is impossible for production and warehouse staff to work from home but by reducing the number of other people in the building we believe we have reduced the risk to them as far as we reasonably can. However we cannot guarantee this and any schedule will be subject to any closures or self-isolations that occur.”

Many members have identified key production staff and where necessary have changed shift patterns to reduce risk. This has included staggering the start and finish of shifts to minimise human contact. They have also staggered coffee and lunch breaks in production areas.One member stated: “I understand that some companies, including some of our customers, have split their workforce and have some people at home and others at work on a 14 day rolling cycle.  Their plan is that should an employee be taken ill at work, they can clean the equipment and change to the team that had been at home. Our workforce is effectively a number of small teams. This is both a strength and a weakness in the circumstances. The weakness is that I cannot split a team of 4 in half and rotate them.  And, should all 4 in a location become unwell, then that location would have to close. At the same time, we have the opportunity to share work amongst the teams, particularly in regular production.”

Another larger member reported:

“…we have amended the on-site hours to be covered in 4 days. This then means we can deep clean the sites on a Friday and also serves to have a 72 hour window between Thursday pm and Monday am, a period through which the virus could not survive.

In certain areas, where we need people on site, we have spilt staff into 2 teams. 1 team working at home, while the other on site. The teams rotate every week. This again reduces people on site, but also minimises the impact should we get an issue. Again the 72 hour window is present between the changeovers. Initially we were going down this route for all as we believe this would be better for staff morale and welfare but this has now changed. We therefore only use this where we cannot have everyone at home.”

A smaller member stated:

“We have a small number of staff on site which is both an advantage, as know each other’s travel / contact history and can exchange information rapidly, but also a huge risk – we face having to shut the premises if more than 1 member of staff has to self-isolate at all as we would no longer to be able to ensure safe staffing levels in the workshop.”

There are a small number of members who have reported minimal impact upon their production capability:

“Currently our manufacturing plants in Europe are still working at near to normal and all deliveries are arriving as expected and virtually on schedule. Although we are of course dependent on various transport and courier companies, there has as yet been very little apparent delay. We are fortunate to have a multi-skilled team who are able to transfer between tasks when/if this should become necessary.”

• Participation in larger meetings and events has essentially been cancelled for all staff.
• Field Sales teams are now being home based and only making “essential” customer visits/attending meetings until further notice
• Only “essential” guests are allowed at most member premises and all delivery drivers visiting sites have to stay in their vehicles
• Where home working has been deemed to be possible, remote working software/technologies have been deployed to all affected employees. Members are encouraging the use of video conferencing even for on-site meetings.
• Identified “at-risk” staff are generally being sent home to work although smaller members are having to ask certain staff to continue in their contribution to key production processes despite being in a higher risk category.
• Smaller companies with a high proportion of ‘at-risk’ staff are extremely concerned and exposed. One small member stated;“We have three full time staff. Two are Type 2 diabetic with high blood pressure (myself included) and the other is asthmatic, so we dread the COVID-19 virus actually reaching us and all the implications that it may bring. In the meantime we try and continue our business as close to ”normal” as is possible but realistically, there is no way that it can be. We do have stocks of motors and spare parts but these are finite and not exhaustive.”
• Staff left in the office have been split up by department to reduce the risk of a whole department needing to be isolated and thus losing all expertise from one area.
• Coffee and lunch breaks are being staggered to avoid larger staff gatherings.
• In general, no overseas travel is being allowed for any employees

Larger companies:

Predictably, the larger members with multiple offices; (especially those with an international network of premises), have more structured and formalised policies regarding their response to the COVID-19 pandemic than those smaller members with fewer resources.

• Some companies have Covid-19 Steering Teams in place in each country with daily virtual meetings, comprised of functional leaders
• Daily feedback of key data is sent to the head office from all countries. In one case a “live” Covid-19 dashboard has been implemented for use by the leadership team.
• In some larger companies, enhanced cleaning regimes have been implemented in all locations, including regular disinfection of touch points
• Some members have deep clean providers placed on stand-by, in case of a confirmed Covid-19 case in any given location.
• Business Continuation Plans (BCP) are being reviewed and updated for viral pandemic, as required.
• Members with large numbers of staff have had office based employees participate in IT “stress tests” for their ‘working at home potential.’
• In some cases, guests to company offices are only permitted after screening questionnaires have been completed
• In order to deal with confusion or ambiguous government advice, communication of specific HR guidelines have been implemented to manage various absence scenarios.
• In general, all members are keeping factories and office buildings open, with leadership personnel being asked to be on-site and visible
• In one large company case, legally approved response templates have been issued to respond to customer/supplier questions/changes to business
• So far few companies have been hit with customers taking longer to pay but many expect that this will begin to happen as firms try and stretch their cash.
• Limited numbers and risk of contact in canteens are being achieved by removing seating

Supply Chain issues:

• Member companies with a high dependence upon central European countries, (especially Italy), are now beginning to suffer from growing supply chain issues.

One member put this issue into context:

“Regarding the Italian production, most of the office staff are working from home where possible, but this inevitably leads to worse responses on both a commercial and technical basis and they have a limited factory production staff working on site, such as is allowed under current Italian restrictions. They are also reliant on the suppliers of raw materials, heat treatment processes and the like, since under this modern obsession with lean and JIT manufacturing, they no longer have large stocks of raw and finished components to fall back on.

With regards to the transport from Italy the UK, the freight company that were use has told us that things have been sticky up to now with long delays at border crossings and they expect things to get stickier or even stuck altogether over the next couple of weeks.

The first quarter of 2020 will be OK for [us] but I expect that Q2 and Q3 will be very difficult. I can’t even think as far ahead as Q4.”

Another member stated:

“…every day the processes are being held up by parts arriving late – couriers are proving difficult when flying the product in , as the airplanes are being moved around to suit the demand  – also we have had to change the weight to stay under 99KG to be more flexible for the couriers especially from over sea suppliers. Deliveries are extending too and this is impacting on our supply to the customers therefore we have no planned strategy but just reacting to what comes in, gets made and shipped”

There are some areas in which supply chains are less effected but they are in a minority. E.g.

“All the indications we have had from suppliers is that they are still up and running and so far we haven’t seen lead times affected by any significant amount. We did have reports from [one company], a few weeks ago that whilst their plants, and their subcontractor plants in China were all open they were experiencing issues with shipping especially with air freight, so whilst we haven’t had this reported as a problem in Europe yet, you would have to think that we will have similar issues (although maybe not with airfreight so much). There is little we can do to mitigate this, but we are not scheduling orders any longer to meet production requirements but getting things as soon as possible so that they are in our possession at the earliest opportunity.”

Another member stated:

“I have been in close touch with our Chinese and Italian manufacturers since this crisis began and although China had several weeks extended New Year holiday, manufacturing has been as normal, with the exception of the Wuhan area. Most of our goods come from either Ningbo or Guangzhou area and have not had issues with total lockdown. I have only heard of one of our manufacturer in Italy who have chosen to shut down for a month, the rest have maintained full production, although they were requested to close on the 17^th and 18^th March to enable a deep clean to take place. The notifications from our U.K. suppliers who have manufacturing around the world have been noticeable by their absence.

Specific requests for support from Government:

• All small businesses, regardless of what industry they are in, should pay no business rates or national insurance for 2020.
• VAT payments should be deferred for 6 months, then be paid in monthly instalments.
• Corporation tax should be deferred for 6 months; again with monthly instalments made possible.
• “The key to this problem is ensuring that at least the profitable companies like ours can remain in business until we get through to other side of this present crisis.” – Small SME MD.
• Prior to the recent Government announcements one member stated:- “If the government could guarantee wages, or at least 75% with the company making up the remainder then that for us is  workable solution to make sure our staff are safe and that we can go back to work thereafter and ensure that our industry survives and grows.”
• “As a company the biggest challenge is the constantly changing information and conflicting information between UGOV and NHS websites.”

Predictably, there is wide concern over the financial impact of the current crisis. One member captured the general feeling:

“Sick pay is an option, but then we have suggested that you can use your holiday allowance before you have to use SSP, as nobody will be able to survive on that amount for very long unless mortgages/rents/council tax/heating costs are all delayed. The government loan option will be useful if we can generate the cash to pay it back, but then if we stop our business then how on earth are we expected to repay the loan?”

Finally, one owner captured the growing despondency amongst the smaller companies:

• “We all feel that we are on the cusp of it all getting a lot worse and we are even planning for the possibility of forced factory-closure from UK government. It is clear that, if this goes on for many weeks and months, many people are going to have to serve financial hardship. Obviously all companies will be stretched financially and some will not recover. I’m sure our list of people on stop will grow!”

Chris Buxton
BFPA CEO

Tel.: 07787 400747
chrisbuxton@bfpa.co.uk