To: John Mansfield who wrote (97 ) 2/18/1998 1:40:00 AM From: John Mansfield Read Replies (1) | Respond to of 618
' certifying the year 2000 compliance of all suppliers was "probably impossible" because of limited time ' computerweekly.co.uk 'Friday 06 February Manufacturers face millennium meltdown About 80% of suppliers to UK manufacturers are not year 2000 compliant, recent research has revealed. The disturbing findings from Gartner Group show that over the next three years, 80% of manufacturers that do not develop a supplier millennium compliance programme will suffer lower margins because of increased inventory levels and expediting costs. A further 20% will be hit by declining revenues, caused by the loss of customers owing to missed orders or inventory availability. Chris Jones, a Gartner analyst and author of the report, said certifying the year 2000 compliance of all suppliers was "probably impossible" because of limited time and supplier lists that potentially reach into the thousands. He urged manufacturers to prioritise suppliers into three categories - critical, important and commodity - and focus the greatest effort on their critical suppliers. "Because critical suppliers can pose a serious threat to customer responsiveness, they must be interrogated at the same level as in-house IT programmes," said Jones. "For suppliers who are not yet compliant, manufacturers must develop an action plan based on three criteria: what is the likelihood that a supplier will become compliant in time; should delivery-risk minimisation strategies, such as inventory builds, be required; and should alternate suppliers be developed?" Jones said non-compliant and important supplier contracts should be renegotiated to include delivery risk minimisation strategies in case the supplier fails to comply. '