WSJ ARTICLE... The Y2K Problem:
01:53:02, 05 January 1999
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A Blitz of Fixes Helps Factories Prepare for 2000 ---- By Scott Thurm Staff Reporter of The Wall Street Journal
The Wall Street Journal via Dow Jones
WISCONSIN RAPIDS, Wis. -- Dale Wroblewski steps to the controls of a giant paper cutter in the Consolidated Papers Inc. mill here and resets the time to 11:59 p.m. and 30 seconds on Dec. 31, 1999.
Thirty seconds later, the screen goes haywire, displaying the date as 1/01/100 and spitting out a line of gibberish every second. The paper cutter continues to clatter, but Mr. Wroblewski has lost the ability to control its razor-sharp knives or the wheels that are advancing paper at a rate of almost seven feet a second.
This is the image haunting America's factories: Machines stopping or spinning out of control at the dawn of the year 2000, when the computers that control their operations, designed to handle only two-digit years, fail to recognize the new millennium.
The concern is justified. Consolidated, a $2 billion-a-year maker of glossy high-end paper used in magazines and annual reports, has uncovered winders that won't wind, wrappers that won't wrap and color adjusters that won't adjust, among other prospective problems at its 11 mills in Wisconsin and Minnesota.
But Consolidated's experience also demonstrates that manufacturers can recalibrate highly automated factories for the year 2000 -- as long as they commit enough money and effort and pay maniacal attention to detail. Company officials expect to finish their year 2000 work next summer, and to breeze into the new millennium without a pause at mills that operate around the clock.
Others exude similar confidence. Nearly 89% of the 394 companies responding to an October survey by the National Association of Manufacturers said they expect to complete their year 2000 work by June, six months ahead of the deadline.
"I've been the internal pessimist since the beginning," says George Surdu, year 2000 coordinator at Ford Motor Co. "Now, I am very, very comfortable with where we are as a company."
That's a big change from a year ago, when manufacturers started waking up to the gremlins inside their plants. Until then, the year 2000 had been considered primarily a threat to mainframe computers housing such core functions as payroll, inventory and payment processing. The computer pros in charge of year 2000 issues at most companies typically knew little about the highly automated workings of the factory floor.
"Most people have just gotten started in the last six to eight months," says John Jenkins, chief executive of Tava Technologies Inc., which helps companies automate factories and is now doing a booming business as a year 2000 consultant.
As it turns out, factories present among the most complex and difficult year 2000 challenges. Just finding all the electrical components and software programs that might contain two-digit years is a herculean task. Factory automation systems tend to be assembled piecemeal over decades, with machines from different manufacturers connected by specialized software.
In Consolidated's newest mill, for example, one set of computers controls the flow of pulp. A second regulates the fine movements of the paper-making machines. A third minds the boiler and drive system, while a fourth continually monitors the paper as it's made, feeding back information used to adjust the other three systems. The $495 million mill opened in 1992 but is riddled with potential year 2000 problems.
Older factories often don't have complete records, so engineers have to scour the plant, looking for vulnerabilities. "I imagined going in as a log and coming out" as paper, says Bob Elliott, an engineer at Consolidated's Wisconsin River mill. By the time he and his colleagues finished last spring, Consolidated had compiled a list of 30,000 devices and software programs to be checked, including the repeaters on two-way radios and the program for publishing training manuals.
The total isn't unusual for a big manufacturer: Pharmaceutical giant Eli Lilly & Co. has cataloged more than 40,000 items to be tested. Texaco Inc. counts 14,000 in a single refinery.
Only a small percentage of these devices and programs will malfunction in 2000. The vast majority don't have, or don't use, a clock to track the time and date. Consolidated estimates 12% of the items in its inventory would cause problems. Other manufacturers cite figures from 5% to 20%. Given the size of the inventories, however, that's still a big number.
"This is like saying that 10% of the light bulbs in Las Vegas are going to blow out," says Quentin Grady, a Tava vice president. "It's easy to fix. All you have to do is look at the bulb and there's an 'X' telling you you have to replace the bulb. But there are a bazillion light bulbs."
Figuring out just which components will fail isn't always easy. Queries to suppliers often bring wrong answers or no answer at all. The manufacturer of the winding machine inside Consolidated's newest mill assured the company that it would work fine in 2000. But when Consolidated tested it last summer by rolling the clock ahead, the machine failed, even as a representative of the manufacturer watched.
The lesson: "If it's a very critical system, test it yourself," says Don Turner, the millwright supervisor who conducted Consolidated's test. It's impossible to test tens of thousands of components, so companies stress some systems at the risk of ignoring others. As Consolidated's internal guidelines put it, "Triage, triage, triage."
The stakes are large. Even a single glitch can prove costly. Consider what happened at Comalco Ltd. aluminum smelters in Australia and New Zealand at the end of 1996. Computerized controls didn't recognize 1996 as a leap year and balked at a 366th day, shutting down the smelters as Dec. 30 came to a close. In the process, several parts overheated and had to be replaced, at a cost of about $500,000, a spokesman says.
To avoid such problems, manufacturers sometimes replace suspect systems. More frequently, the fix is simpler: Install some new software, replace a chip, set back the clock to buy some time. To remedy one common bug, Mr. Elliott toted four grocery bags of microchips through a Consolidated mill, replacing a single chip on dozens of circuit boards. To protect the paper cutter, Mr. Wroblewski will soon reset its clock to 1983. Other employees will be handed lists of clocks to be reset shortly after midnight next Jan. 1.
Fix by fix, the money adds up. Consolidated estimates it will spend $26 million addressing year 2000 problems, or more than 1% of annual revenue, typical for a manufacturer its size. But there are other costs as well: Consolidated has delayed plans to further automate its paper-cutting mill because the employees who would work on the project are consumed by year 2000 work.
Some companies will seek additional protection by closing factories that normally operate around the clock. Chemicalmaker Rohm & Haas Co., for example, will shut its plants from 11 p.m. on Dec. 31 until 1 a.m. on Jan. 1. Many other factories will be closed because the New Year will begin on a Saturday during a normally slow holiday season.
Even the most conscientious companies know that they are unlikely to catch every year 2000 glitch, but they expect problems to be minor, shutting a line for a few hours or a few days at most. "It may be like a snowstorm," says Ford's Mr. Surdu, invoking an oft-used analogy. "You're shut down for a few days, and then you dig your way out." To minimize disruption, Ford will bring workers in on Jan. 1 and 2 to restart machines and check for problems.
Others aren't so sure that affected companies will recover so easily. Jay Abshier, the year 2000 coordinator at Texaco, recalls the six months, numerous phone calls and two different sets of chips it took to fix a year 2000 problem at a production terminal.
"If somebody has that problem on Jan. 1, 2000, they and others are going to be in line to get these things fixed," Mr. Abshier says. "They may have production problems for six months."
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