Subject:	Trick or Treat, was: A Quiz for Pollies
Date:	1999/11/01
Author:	cory hamasaki <kiyoinc@ibm.XOUT.net>
	Posting History

On Sat, 30 Oct 1999 01:55:56, "Bob Brock" <bbrock@i-america.net> wrote:   > Cory, while I've heard you talk a lot about postulated failures in > unidentified companies, I've yet to see any of these failures actually > happen.  Perhaps in another couple of months, or do you now subscribe to the > "sometime in the future before catastrophic failures show up" paradigm?   Some are unidentified, some, like Monkey County, eBay, Oxford Insurance, Maxwell Online,  the World Bank, Bang and Olufsen, Samsonite, Nevada, MCI-Worldcom, and now Hershey, have had public, persisting, and damaging IT failures.  Some problems were simple ungrades that went horribly wrong, some were date problems (the decade roll at Maxwell Online), others were upgrades made to prevent Y2K problems.   > Given the lack of doomer analysis by other "big iron" guys, it must also be > underestimated by those who not only do it for a living, but those who post > to the big iron groups.   No, there are several regulars on the IBM-Main listserv who are super doomers.  A few have posted here themselves.  In addition, there are a number of pollies in that group.   > I don't see, even as a worst case scenerio, a two week nationwide > infrastructure failure.  Sparodic and limited infrastructure failures > perhaps.  If that happens, the solutions will be similar to what happens > during earthquakes and hurricanes with relief efforts comming from > unaffected areas.   This is very dangerous thinking.  Consider Hershey.  It's easy to laugh off a candy vendor.  Examine the facts.  They retained the services of IBM Global, converted to SAP with the phase in before the roll, have a relatively simple product line.   I like their milk chocolate bars, their kisses are nice to give to geekettes too.  Candy is dandy ....   Something has gone horribly wrong with their SAP install.  Of course, if they had run parallel as some idiots advise, they might not be in the current mess.   For some reason, they didn't run parallel.  They went balls to the wall, hit the wall, and have been on the evening news.  They can't ship product, they'll lose market share and perhaps a hundred million dollars.   The reports are that they won't have the mess squared away in time to ship chocolate turkeys or candy santas.  Even the chocolate Easter bunny might be in trouble.  No chocolate eggs for you.   But it's a joke, right; it's just candy.   Well, no.  To the IT director, the project manager for the consulting company, and most of the management and workers, pushing chocolate is deadly serious business.   If they can't rot your teeth, they lose their jobs.   I believe that they went balls to the wall to get the new SAP system in before Y2K hits.    Someone with inside information is welcome to correct me.  Simply say, "Hersey went balls to the wall, messed up big time, for no good reason;  we're idiots, we slam systems into production willy-nilly because, well, that's the new way of doing large system installs."   If they were racing the Y2K countdown clock, trying for October 1999 so they would have two full months for testing and messed up big time, well, I can sort of understand that.   But here's the heart of the matter, the evening news says that the problem is persisting and high impact.  Although they say it as a joke, waw-haw-haw, it's candy,  why is Hershey any different from any other product?  It's all at risk.   Suppose all food, product, drug, what-the-F...-I-don't-know, companies take a 10-20% reduction in efficiency when they hit the wall.   Halloween, Thanksgiving, Christmas, Easter,  big time sales for Hershey, if they take a revenue hit, what happens to the employees, management, investors, suppliers.   Yes, they're a joke, it's just candy.   The Hershey problem is a warning that everything is at risk.  The fact that an IT upgrade can keep product from shipping, snarl deliveries, and takes weeks, months, perhaps as long as until Easter to unsnarl, is a warning.   > They have no one to blame but themselves.  I came to this this forum about 2 > years ago and started posting about a year ago.  I wanted answers.  I wanted > to be convinced that a Y2k catastrophy was written in stone if that were > indeed the case.  Yet here we both sit with only about two months left and > neither of us really knows for a fact what the real impact will be.   The recent problems with Hershey define the lower bound.  Expect at least half of the top 5,000 entities experience what Hershey is going through.   The question is, how does this affect you and me and our readers?  If a few hundred or few thousand firms experience the kinds of problems that Hershey, Nevada, etc. are having, a few hundred critical products will vanish from the store shelves.  Or there might be an oversupply in some places.  Or it could be both.   Maybe in January, we'll have shelves filled with Halloween candy and nothing else.    Is this a joke or is this deadly serious?   > Based on what I know, I continue to recommend a 2-3 month self suffiency > (survival) mode for a worst case (in the US) scenerio while believing that > most people will not use it for contingency.  I continue to believe that > humankind learned nearly 6000 years ago that the best way to survive was by > working with those around them as opposed to the lone wolf type of > survivalist.   I don't know of any lone wolf types.  The smallest team that I'm aware of is about a dozen.   The largest risk still seems to be a management and government hysteria.   If Kosky had come clean a year ago, we wouldn't be in this mess.  If more than a few firms go Hershey in 1/1/00, the lunatics on the evening news, the big-brains in the press, the idiots like Kosky will make this much worse.   > Should I be wrong and you're right, I wish you the best of luck.  Should I > be right and you be wrong, I still wish you the best of luck and a > prosperous life.   I can't be wrong because I'm still not sure what will happen.  There will be more Hersheys,  even worse failures.  I don't know how these kinds of problems flow through society.   cory hamasaki http://www.kiyoinc.com/current.html I'll expand and rerun this in the next WRP as "Trick or Treat" 

-- a (a@a.a), November 01, 1999

Answers

Scary stuff. I hope that its not that serious. We'll have to wait and see. JIT was and is a good idea until you can't get what you need. From my perspective, that seems to be the main proble. Good post!

-- jbsmith (joebobsmith@yahoo.com), November 01, 1999.

JIT is due primarily to yuppie bean counters. There was a major ONE-TIME savings to a company implementing it as the supply pipeline was emptied out. After the transition period, however, the flow has to be THE SAME as it was before. Before, they had some extra capital tied up in inventory. Emptying the pipeline gave their bottom line a one-time shot during the transisiton. The capital requirements are the same before and after.

The on-going savings MAY be the elimination of some relatively minor cost cheap warehouse space on the outskirts of the city. But whether or not the supplies are stored in their warehouse or a supplier's warehouse, they still have to be shipped to the factory.

Now we have a system with no slack. No redundant links. If one link breaks, everything falls. And more than one link is bound to break.

Penny wise; pound foolish.

-- A (A@AisA.com), November 01, 1999.

I still anticipate any of the pollys answering the JIT riddle with baited breath. None have touched this issue. Probably because few if any have been out of the country to see just how bad it is first hand. And if you think Hershey's was interesting, just wait until they try to ship raw materials, semi-finished products, and in-production items up from Central Mexico in 1/2000; that will be a hoot! But of course, it's not a hoot to the workers who will be laid off due to supply line problems and lost sales...

The two minute warning is about to sound. Will anybody be watching the clock?

John

-- John Galt (jgaltfla@hotmail.com), November 01, 1999.

John,

The two minute warning sounded TODAY. (2 months to go)

And *I* certainly keep an eye on the clock. ;^)

59 days remain. About 1425 hours.

-- Dennis (djolson@pressenter.com), November 01, 1999.

Cory left out the city of Detroit which has, for several months, been missing payments to vendors and contractors due to problems with its new system.

A,

When JIT is working, it does have additional ongoing benefits, including saving interest cost on capital tied up in inventory, obsolence (relative) of product in inventory (which is very important for products which have frequent model upgrades, as well as for new products being test marketed, and for products subject to rapid consumer taste changes), etc. Of course, these benefits disappear when JIT breaks. :-)

Jerry

-- Jerry B (skeptic76@erols.com), November 01, 1999.

Hey Jer,

Don't know if you're still watching this thread or not, but would you place a small wager on how you think things might play out? Thanks!

-- flora (***@__._), November 01, 1999.

JIT also has an impact on product quality, since it prevents months worth of substandard or incorrect parts from being cranked out in huge expensive product runs.

-- Flint (flintc@mindspring.com), November 01, 1999.

uh, you're grasping there, Flint.

For those of us with insomnia tonight, lets hear your argument explaining why JIT will speed the recovery once again.

-- a (a@a.a), November 01, 1999.

Hey Cory, What is the status of those 100 IBM mainframes that control the power grid?

-- Earl (earl.shuholm@worldnet.att.net), November 01, 1999.

Flora,

I'm guessing (hoping) that most electricity suppliers, and the grids, will stay up (as long as fuel lasts). Ditto for most telecoms. In terms of chronology, my big worries are about petroleum (refining and distribution) and then railroads. With luck, those worries may be mistaken, but then, again chronologically, we come to the "applications programs" that affect production, distribution (inventory and shipping) , billing, and accounting, for most products that we use, and there I expect large numbers of problems which, cumulatively, I expect to have sufficient adverse effects to make life miserable.

Other than all that, things look fine. :-)

Jerry

-- Jerry B (skeptic76@erols.com), November 02, 1999.

Flora,

It occurred to me that I left out a few pertinent areas.

I am guessing that most domestic banks may be able to manage their domestic Y2K problems, but I have no comfort level regarding international banking. Also, for international economic activity generally, I'm quite worried, and because of its criticality, I'm particularly worried about international petroleum supplies.

Again, other then all that, things look fine. :-)

Jerry

-- Jerry B (skeptic76@erols.com), November 02, 1999.

NO Flint is NOT grasping, as this is one of the MAJOR selling points I hear ALL the time from the McBoozlings and the KPMAndersonites in my car.

Chuck

-- Chuck, a night driver (rienzoo@en.com), November 02, 1999.

Although I think our railroads will simply inrcease the amount and quality of their screw ups after Y2K hits, my concerns lie with oh, say the Mexican railways, Chinese, etc. But what does that have to do with JIT you may ask? Duh. Not everything in this world is manufactured in a port or on our border. And a substantial industrial complex is just 30 miles or so from Mexico City. Wait until their screw ups begin, and then you'll see the impact of Y2K at home. 1973 here? Ha. Multiply that with the incompetence overseas by a factor of at least 5.

Got Nerve? Buy lots of puts for 1/2000....

John

-- John Galt (jgaltfla@hotmail.com), November 02, 1999.

E-bay down again today 11/2, it was down intermittently yesterday, there explaination is that there having performance issues and that the system will be down until futher notice to take corrective measures. Anyone with some additional info, thats were I make my money getting nervous...---...

-- Les (yoyo@tolate.com), November 02, 1999.

Gives me the JIT-ters, it do! Suggest adding greenhouse plastic, plastic baling twine and a set of files to sharpen your various knives, scissors and other tools.

-- ..- (dit@dot.dash), November 02, 1999.

Hey cory,

Any more news on that bank snafu of 30,000 dollars? remember the one you said was a y2k glitch? or was that another lie on your part....er....I mean an exageration to keep you from looking bad over the NO-anne effect? You know, like it was a problem that happens from time to time NOW....not y2k related? Something you used to pump up the noise on y2k hysterics?

trick or treat, smell my feet!

-- stinky (clueless@polly.drone), November 02, 1999.

If Hershey ONLY took a 20% hit doing its SAP implementation they got off lucky. My former employers lost 25 - 30 % of their business and 35% of the workforce (including me) were let go when SAP their implementation bottle-necked production.

It's now been two years and they're just returning to pre-SAP business and employment levels. Just in time for Y2K...

WW

-- Wildweasel (vtmldm@epix.net), November 02, 1999.