This December 31, you might want to install a home electric generator, retreat to a cabin in Montana, or curl up in a quiet corner of the world to mark the collapse of modern civilization as we know it. Then again, the new millennium might arrive as casual as any other year in the 20th century.
With 2000 just around the corner, governments, businesses and private citizens are gearing up for the unknown. Some alarmists believe just about every important institution, from banks to utilities to airlines, will be stricken by the Y2K bug. Others have started to stockpile food while some are withdrawing money from banks because they believe transportation and commerce will come to a halt.
Then again, no major disaster may come of it, at least not in the U.S., considered one of the nations least likely to be affected by the turn of the millennium. Sure, there may be an isolated problem here and there, but some experts believe they will be short-lived.
Industry, however, isn’t taking any chances, and will spend billions of dollars to make sure they are safe from the millennium bug and the army of litigators lined up to sue. From updating their phone systems to rewriting millions of lines of computer code to replacing outdated hardware, U.S. business may spend $50 billion to $600 billion to comply with the new millennium – no exact estimates are possible because with some companies, it’s difficult to delineate Y2K costs and routine systems upgrading. Of even greater concern is the cost associated with computer failures because of non-compliance.
The Two-Digit Disaster
Printing ink manufacturers, like many of their counterparts in other sectors, are just as susceptible to the millennium bug. From the largest players such as Sun Chemical and Flint Ink to small mom-and-pop ink makers, all operations will have to address the Y2K question or face considerable problems in the new year.
What exactly is the millennium bug, and how can it be so devastating that many businesses may come to a halt on January 1? The problem stems from the shortsightedness of computer developers in the late 1950s when they came up with a computer programming language called COBOL (common business-oriented language), one of the earliest computer languages.
In its infancy, computers used punch cards as data storage devices, and to save space on the cards, the year portion of dates was assigned only two digits instead of four. Computer giant IBM exacerbated the problem when it began shipping a then-widely used computer with two digits for the field. In effect, today’s computers and software not updated will show the date as 1900 and not 2000 on January 1.
Since the advent of the modern-day computer, the computer industry has put off addressing the issue for decades, seeing the Y2K problem as a distant threat. Numerous efforts were made over the past four decades to convert hardware and software to use a four-digit year, but no one undertook a serious effort until this decade. Even now, many companies are expected to come down with the millennium flu when the new year arrives.
The problem isn’t limited to computers; any electronic device that is date-dependent could crash if it isn’t updated. Voice mail, pagers and other hand-held devices such as spectrophotometers could be made inoperable by the year’s end.
The stakes are high in the Y2K compliance battle. With air and rail transportation at risk, utilities facing possible shutdown and financial institutions heading into a possible crisis, Y2K can cause widespread disruption.
Are these the cries of an alarmist? Consider this: Stephen Horn, chairman of the Subcommittee on Government Management, Information and Technology, in February issued a scathing report on the federal government’s own compliance program. In it, six agencies responsible for more than half of the government’s mission-critical computers earned poor marks for their efforts. They included the departments of Agriculture, Defense, Health and Human Services, State and Transportation. Of particular concern is the Defense Department, which last December said 81 percent of its computers were compliant; by February, that portion had dropped to 72 percent.
“Either the department has a serious internal communications problem or it has taken a very big step backward,” Mr. Horn said.
He also gave failing grades to the State Department, the Department of Transportation and the Agency for International Development.
What happens to ink companies that fail to fix the Y2K bug? In the best scenario, they may experience minor disturbances with their information systems. At worst, production could come to a grinding halt because dispensers fail to work or their formulation software fails. They may be unable to bill customers because of accounting software registering the date as 1900. It’s easy to see why some ink companies are devoting millions of dollars and thousands of manhours to fixing the bug.
Adopting an Open System
“I would say this has been a large project,” said Jim Rohrkemper, vice president and chief financial officer for Flint Ink. “Since 1996, we have replaced every piece of hardware and software in the company.”
For Flint and some other ink manufacturers, preparing for 2000 has been a bittersweet pill to swallow. While it’s required the companies to invest millions of dollars in new equipment and software, it’s also improved their overall efficiency and communication. That’s especially important, Mr. Rohrkemper said, now that Flint has operations throughout the world. He said the company had considered switching to an enterprise-wide computer system employing open LANs (local area networks) for some time, and 2000 helped accelerate the conversion. This year, the company will complete implementing Windows NT throughout its facilities.
“As our business got more complex, there was a huge amount of inter-branch and intra-branch activity that took place,” he said, which required the company to make the computer investments. While the company could have simply updated its network of IBM AS/400 servers – which were purchased 13 years ago and outfitted with proprietary software that Flint itself wrote – it decided to implement local area networks with off-the-shelf software.
Mr. Rohrkemper said one vendor several years ago estimated it would cost Flint at least $1.5 million to make the AS/400 platform comply with 2000. This was also before the company’s recent acquisition binge. Flint opted to spend millions more on the new system, whose installation will be completed at all facilities by October. The company recently began testing the new system for Y2K compliance at its headquarters. On February 21, internal computer clocks were set ahead to 2000, and 350 scripted tests were conducted. Of those, five were found problematic, and Mr. Rohrkemper said the company is looking into whether the failure was the result of a Y2K bug or a programming error.
A Spectrum of Attitudes
It’s likely that larger companies will be better prepared for the new year, several ink industry information technology specialists pointed out. Smaller companies, it appears, are less worried about Y2K compliance, according to the National Association of Printing Ink Manufacturers (NAPIM). Executive Director Jim Coleman pointed out that many NAPIM members surveyed about Y2K compliance said they weren’t especially concerned with the bug.
“A lot of them, being smaller companies and essentially PC-oriented, felt it wasn’t an issue they needed to be overly concerned with,” said Mr. Coleman. He added, however, that larger NAPIM members seemed well-informed about potential liabilities they face. In any case, he said NAPIM is following related developments to alert members about problems inherent with ink manufacturing.
INX International said it has already detected problems with key software, despite its vendor’s assurance that one of the packages was Y2K proof. Joe Cichon, senior vice president of manufacturing and chairman of the company’s Y2K committee, said the company discovered the flaw after conducting its own tests. He said the vendor, which he declined to name, had certified the software 2000 compliant as recently as last November, and agreed with INX officials about the problem when confronted with the test results.
The software controls ink dispensing equipment, and had it gone undetected, INX could have had production problems at various facilities. “It kind of opened our eyes a little bit,” said Mr. Cichon. “You have to have a checklist of what you need to check.”
There is general agreement within the industry that vendor certification isn’t enough; manufacturers need to conduct independent audits of critical systems. As some pointed out, if a vendor fails to make its products comply, it’s the customer who will suffer the consequences.
Like Flint Ink, INX chose to replace its old UNIX system with Windows NT, but the decision had been long in coming. According to Mr. Cichon, the company began reviewing compliance and other systems issues years ago. In 1994, the company put together a proposal for the new system. INX is now replacing all of its software and believes the installation will be completed well before the end of the year.
“The interesting thing about Y2K is it forces companies to do something now that they may have to do in the future,” he said, adding that two staff members have probably spent the past two years overseeing the company’s compliance plans.
The Clock Is Ticking
With eight months left before the end of the year, is there enough time to address Y2K problems? For larger companies with hundreds and even thousands of computers, they probably have run out of time. Smaller manufacturers with a handful of machines probably can still squeeze in a contingency plan. Some ink makers say they will be ready long before December 31 because they need a cushion in which to work out any potential bugs.
A more immediate deadline is September 9, when the date field will register 9-9-99. For some older equipment which use truncated date fields, that day may cause problems before the year’s end. For this and other reasons, companies are rushing to complete their compliance program.
Steve Henn, president of Handschy Industries and a member of parent company Field Containers’ Y2K committee, said the ink maker will complete its implementation program by July 1. The remainder of the year allows Handschy to troubleshoot.
Mr. Henn said he personally led the company’s efforts to become Y2K compliant. As president, he could immediately approve purchases and upgrades, and it also gave him an intimate view of Handschy’s information systems. The drawback, however, was the demand on his time.
“For a period of three months, I spent 20-25 percent of my time on it,” he said, adding that it has been worth the effort. “When it’s all done, we will be a much better company for it.”
Handschy, too, was on an IBM AS/400 platform and is now switching to an open platform. He estimated that the company spent about $1.5 million on systems upgrade, the bulk of it on computer hardware and software.
Ink manufacturers say their efforts are directed not only at protecting their operations but also to reassuring customers. Some companies report receiving hundreds of customer inquiries about Y2K compliance.
Scott Dufour, director of information systems for Sun Chemical’s GPI division in Northlake, IL, said his department has received 400-500 inquiries from concerned printers. Some want simple reassurance that there will be no supply disruptions while others insist on lengthy sit-downs to review Sun’s efforts. Some customers even ask for the company to agree to a uniform statement they issue to all suppliers. “The question I hear over and over again is, ‘Will you be able to supply us with ink?’ ” he said.
To allay customers’ fears, Sun, which initiated its compliance program in 1993, provides detailed information about its efforts, which include switching to the Alpha platform supplied by Compaq Computers. In fact, the world’s largest ink maker has teams of IT professionals that travel to each of its North American sites to install and train personnel.
With so many locations, Sun has also had to work closely with vendors and conduct independent testing to become compliant. So far, it has found equipment needing patches at 36 sites, and Mr. Dufour said Sun expects to have them in place by July 1.
As much as ink manufacturers can prepare for the worst, some problems will be out of their control. For instance, there are predictions of sporadic power outages throughout the country. Even equipped with backup generators, plants will be severely disrupted.
And then there’s the issue of shipping products to both customers and receiving them from suppliers. If customers can’t get products, will they look to other ink suppliers?
Clearly there are many unknowns about the new millennium. Will widespread disruptions occur or will the bug go away quietly?
Either way, ink makers are taking precautions. As one information technology manager stated: “You won’t find me on a plane on January 1.”