In U.S. and Europe, SARS affecting travel, meetings

The spread of severe acute respiratory syndrome (SARS) in the People's Republic of China and throughout the Asia-Pacific Rim countries has alarmed health officials and prompted companies to curtail travel to countries most affected by the mysterious illness.

While maintaining that SARS has not had a major impact on business activity or supply chain operations, companies in Europe and the U.S. are rearranging business meetings and travel because of the disease.

The outbreak prompted the World Health Organization (WHO) yesterday to issue its first-ever recommendation that individuals avoid an area because of a disease outbreak. In a statement, the WHO asked travelers to postpone all but necessary travel to the Hong Kong Special Administrative Region and Guangdong Province in China.

Aberdeen Group Inc. yesterday issued a report saying that SARS threatens to disrupt the trillion-dollar global electronics industry. Major companies are already delaying travel to China and Taiwan, which produce and assemble many key electronic components. Further SARS-related disruptions could involve schedule slippages and supply chain disruptions that have adverse effects on the semiconductor and electronics industry, Aberdeen said.

Anecdotal evidence supports the Aberdeen report, suggesting that the illness may be causing at least intermittent disruptions in the operations of some companies with business in Asia.

Koninklijke Philips Electronics NV, which employs approximately 50,000 people in Asia, reported that one of its employees in Hong Kong may have contracted SARS, according to Andre Manning, a spokesman for Philips. "We have taken medical measures and the floor this man worked on was closed for a short while and sanitized. Our operations are still running, though our staff is, of course, concerned," Manning said.

While following WHO recommendations on travel to the area, most companies say that SARS has not had an impact on their day-to-day business and operations in Asia.

In keeping with the WHO recommendations, IBM asked its employees to hold off on nonessential travel to Hong Kong, Singapore, China and Hanoi, Vietnam, according to Brian Doyle, a spokesman for IBM. "IBM is monitoring the situation very closely, in keeping with our commitment to health and safety of our employees," he said.

Besides that travel advisory, however, the company hasn't noticed any change in its normal business operations, he said.

The Home Depot Inc. noticed "not one bit" of change in its supply chain since the beginning of the SARS outbreak, according to David Lang, senior manager of production control at the Atlanta-based home improvement retailer. Like other companies, The Home Depot is "judiciously reviewing all international travel," by employees to Asia and other countries. International travel is also on a "volunteer" basis for all employees, according to Lang.

"If someone has a need to travel, but is uncomfortable doing so, they don't need to go," he said.

Home Depot opened two "sourcing" offices in China in 2002 that have allowed the company to continue meeting regularly with vendors and develop products in that country, Lang said.

For employees in those offices, however, the illness is a concern. Employees there are taking "prudent measures" to avoid exposure to the disease such as rearranging on-site meetings at factories to take place at Home Depot's offices whenever possible, Lang said. "If you have to go to a factory, you go to the factory. But if it's an either-or, we're asking them to come to us," he said.

Nokia Corp. also issued restrictions this week affecting travel to Hong Kong, China, Taiwan, Singapore, Thailand and Vietnam, according to spokesman Lauri Kivinen. However, the Espoo, Finland-based mobile phone giant said that it does not expect to see any major impact to its supply chain resulting from SARS.

"We serve each region on a regional basis," Kivinen said. "What is made in Asia mostly stays in Asia. Most of the products we sell in the U.S. come from our factories in South America; most of the products we sell in Europe are made in Europe."

While many of the components for its products come from Asia, they mostly are manufactured in Japan and South Korea, rather than in the countries seriously affected by the SARS outbreak, he said.

Copyright © 2003 IDG Communications, Inc.

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