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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: Jim who wrote (8201)	8/21/1999 10:47:00 AM
From: flatsville	Read Replies (1) \| Respond to of 9818

Jim: You wrote: >>>In our competitive society, if one piece of the supply chain (a manufacturing or distribution company) cannot deliver their service, won't there be other companies who are compliant and will be more than happy to supply the product or service?<<< Generally speaking, the answer is "Yes." But, bear in mind that for some industries the manufacturing and distibution supply chain is global in nature. Far flung niche manufacturers/processors/suppliers may be cut off from vendors and customers indefinitely. If there is another niche source, that company may find it difficult/impossible to ramp up capacity. The barrier to entry may be prohibitive for those who might step in and fill the void. A better example and explanation from Dennis Grabow: >>>Chemical processing is comprised of thousands of smaller, niche companies that dominate the manufacturing of specific chemicals. However, there are conditions common to most, if not all, chemical processing companies. Some of these conditions consist of the following: capital intensity, dependency on automated systems (highly susceptible to Year 2000-related disruptions), heavy regulation by government agencies and a dependency on transportation systems. This is a formula for long-term disruptions as internal systems and customer-vendor chains work out Year 2000 fixes over the next several years. The problem is compounded by modern manufacturing, management and marketing techniques that rely on just-in-time inventories, international distribution systems and single source suppliers to compete in a global economy. Consider, for example, that gum rosin plants within China supply a majority of the raw material required for polymers used in a variety of inks and coatings. This is the basis for a domino effect that is unprecedented in our modern economy and one of reasons that Year 2000 promises to be the greatest wealth transfer event of the 20th century. From a financial perspective, chemical processing is a "foundation industry" that can dramatically impact the financial performance of any dependent organization. We fully expect that the chemical industry will be a barometer for how companies will perform because disruptions within this industry will be a first indication of financial problems.<<< y2ktoday.com So much chemical manufacturing and processing has moved abroad due to environmental concerns here in the U.S. that the CIA recently organized a standing committee to monitor the industry. This is called a "clue" perhaps.