Auto Makers Ahead of the Game???

[Marc]

From InfoWorld. Can you believe it???

September 7, 1998 (Vol. 20, Issue 36)

Automakers get a jump start on Y2K compliance with trade group


By Nancy Weil

While some industry segments are just starting to heed warnings of major upheaval resulting from spotty year-2000 compliance, major automakers appear to be ahead of the curve.

Chrysler, Ford Motor, General Motors (GM), Volvo, and Toyota Motor Manufacturing North America are working with an industry trade group to survey global suppliers of automotive parts; the surveys will help to assess how prepared the automakers are and what they need to do to get on track for year-2000 compliance, including testing new software and systems. Automakers say the ongoing effort is helping to ensure that they are not caught off guard by problems that could have been foreseen and also is making suppliers more aware of exactly what needs to be done.

Chrysler, Ford, and GM -- the "big three" of U.S. automakers -- approached the Automotive Industry Action Group (AIAG) for help in coordinating the effort of tracking supply-chain progress. The result is an exhaustive compilation of data obtained from questionnaires the AIAG sends to suppliers, which can update their information on a password-protected Web site. The industry group has a task force to manage its Year 2000 Information Center, based in Southfield, Mich.

"Instead of just talking about the problem, they've put together a very proactive and cooperative approach so that if problems are identified, help can be provided," said Fred Craig, the AIAG's year-2000 manager, of the automakers' method for keeping tabs on the supply chain.

Where the automotive industry is concerned, the gloomier forecasts have been that vehicles using computer chips will stop working. Automakers say that will not happen because the embedded chips in vehicles are not date-sensitive. A more overarching concern for the industry, they say, is readiness along the supply chain, particularly because the same suppliers provide parts for all automakers.

The coordinated effort to survey suppliers came about because the top U.S. automakers felt "we didn't want to put a burden on them by having Chrysler ask them to do something and GM ask them to do something and Ford ask them to do something," said Roger Buck, year-2000 manager at Chrysler.

Based on questionnaires sent to 125,000 supply sites worldwide, which were first sent out in September of last year, the overall results have been encouraging.

"I think what we're seeing is that the vast majority of the suppliers are addressing the issue," said Steve Turner, purchasing manager for year-2000 supplier readiness at Ford. "In fact, I have yet to encounter anybody who says this isn't an issue. We haven't encountered anybody who is in denial. And I'm talking globally."

Automotive suppliers and automakers often have had partnerships for decades, so automakers want to do everything they can to keep the chain intact and avoid severing long-standing relationships.

"The purpose of the program was not to separate who we're going to keep and who we're going to get rid of," Turner said. "We went into this thinking that we're going to help the suppliers."

Ford is establishing time lines for suppliers to work toward, and those generally have been well-received, Turner said. Suppliers realize that their capability to continue doing business depends on being ready.

"We think it's almost like a shareholder advocacy group because they're going to get us our parts -- we know that. But it doesn't do us any good if in order to do that, they've got to work seven days a week for the first six months of the year [2000]," Turner said.

The survey covers all aspects of the supplier's business: computer systems, the shop floor where actual manufacturing takes place, security systems, elevators, office operations, trading partners, and which financial institutions they use.

"At first, a lot of people fought it," Buck said of the surveys, adding that the main objection was that the questionnaire had more than 200 questions, though it has since been pared to 24 queries.

Companies that have the "high-risk" mark will be contacted to develop contingency plans.

"We're not going to go into 1999 with a high-risk supplier and not have contingency plans," Buck said.

If a supplier needs eight months to finish dealing with year-2000 issues by June 1999, for instance, then Chrysler can estimate how many parts to have the supplier stockpile in order to get through the period that might prove most troublesome, Buck said.

The survey idea has caught on. German automakers Volkswagen, Daimler-Benz (recently bought by Chrysler), BMW, and Porsche, as well as French automakers PSA Peugeot Citroen and Renault have contracted with AIAG to distribute the survey to their suppliers. Those companies are not, however, formally participating in the AIAG Year 2000 Task Force.

Nancy Weil is a Boston correspondent for the IDG News Service, an InfoWorld affiliate.


Getting Y2K compliance into gear

Ways the auto industry is smoothing out kinks in the supply chain Largest automakers devised single questionnaire for suppliers Sent questionnaire to 125,000 suppliers, then compiled and published data based on the responses Posting regular updates on compliance status Voiced willingness to help suppliers reach compliance

Copyright (c) 1998 InfoWorld Media Group Inc.

[Roger Eastin]

I just read in the newspaper (which, of course, is always an accurate source of truth) that the airlines are now 99% complete with their year 2000 updating! I guess I can travel by air over the 2000 new year holiday. Now if I only had the same confidence in the government and banking systems....

[Marc]

Ummm - well, when you say government....

On the other hand, I'm not of the "Doom & Gloom" school. I'm not stockpiling water, food, ammunition, etc. I believe things will roll right along.

[Marc]

Who else believed Y2K would fizzle?

The sky is falling, the sky is falling!

I, and many, spent soo much time on that issue that it is sickening.