The Real Year 2000 Nightmare: Manufacturing Systems

At midnight on New Years Eve a year ago, New Zealand Aluminum Smelters learned a hard lesson about the date sensitivity of its plant-floor systems. Dec. 31, 1996, was the last day in a leap year. As such, it was assigned the number 366 in the Julian calendar scheme used by the companys process-control program. Unfortunately, the program failed to recognize the figure as a valid date. So, simultaneously and without warning, the system shut down all smelting-pot lines at the companys Tiwai Point operation in southern New Zealand. The glitch was fixed by mid-afternoon, but by then it was too late. The damage--more than $1 million worth in New Zealand currency--had been done. Without computers to regulate temperatures inside the pot cells, five overheated and had to be scrapped. Quite literally, the company had suffered a costly date-related meltdown. Theres a good chance your factories may be vulnerable to such a mishap. The average manufacturer uses dates--and calculations based on them--to drive all manner of business processes that take place inside plant walls. These range from product-data tracking and bar-coding to scheduling and monitoring of preventive maintenance, instrument calibration, and environmental systems. More than enough has been written about the problems that could result if a companys higher-level, often mainframe-based accounting and human-resources systems are unable to cope when their internal clocks--lacking a four-digit date field for the year--must make the shift from 1999 to 2000. But relatively few manufacturers are as yet aware of the complex Year-2000 date-change problems that can disable many crucial factory operations. Some companies, in fact, use time-and-date information for as many as 40 different purposes on the shop floor. When addressing Year-2000 problems, "The No. 1 mistake that manufacturers make is underestimating the risk they face at the floor level," says Tom Bruhn, director of business development for Raytheon Automated Systems, Birmingham. "Many companies have very little appreciation of whether their products will fail or not," says David Waddington, information manager at Unilever NV, Rotterdam. "Its really quite a nightmare scenario. Quite a few people are going to have sleepless nights dreaming about this." And make no mistake about it, the impact of Year-2000-caused interruptions to business could be catastrophic, experts say. Should a shop-floor systems snafu be allowed to go undetected until its too late, not only is the company that caused the trouble at risk, but so are its dependent business partners. "It could bring an entire supply chain to a screeching halt, because some plants will not be able to deliver," says Bill Swanton, director of plant-operations research at Advanced Manufacturing Research (AMR), a Boston-based research firm. "One little guy not taking [the year 2000] seriously could shut the whole supply chain down." Sidestepping such difficulties, however, may be a task likened to trying to extricate oneself from quicksand--that is, the more effort you make, the deeper in you get. With some of the embedded shop-floor software widely in use today, companies will have to do some serious digging just to get to the bottom of the problem. "You are basically going to have to track down, through layers and layers of manufacturers, some of whom may not be in business anymore, how to deal with a potential century problem [in equipment they sold you]," says Marsha Williams, information-technology manager for Cobe Cardiovascular Inc., a subsidiary of Lakewood, Colo.-based Cobe Laboratories Inc. Cobe manufactures $160 million worth of operating-room and related equipment annually. Further complicating the challenges facing many manufacturers is the increasing complexity of--and dependency on--todays supply chain. In the automotive industry, for instance, its becoming more and more difficult to trace the path of a part or component in a clear, linear fashion. "If you look at something like a [car] seat," says Joe Bione, a consultant with Deloitte Consultings Detroit office, "there are three or four main suppliers. They all supply each other with components, and their extended enterprises all cross over to each other. So when someone does not provide a part that goes into another part that goes into a seat, you dont make too many seats. And there is no inventory in the system to allow for that error." Bione serves as lead global consulting partner for Chrysler Corp. and as Deloitte Consultings lead partner on a Year-2000 task force sponsored by the Automotive Industry Action Group (AIAG), Southfield, Mich. One company that is working to avoid such troubles is Freudenberg-NOK General Partnership, Plymouth, Mich. By November 1997 the company had sent letters to its customers and its approximately 1,000 active suppliers to impress the importance of Year-2000 issues upon parties not sufficiently aware of them. To ensure that this message is spread consistently throughout the industry, Freudenberg-NOK fashioned its communications in accordance with suggestions put forth by the AIAG, which also has undertaken a survey of 50,000 auto-industry suppliers in an effort to assess that industrys state of readiness. Of particular concern to Freudenberg-NOK, which ranks among the top 50 suppliers to North Americas automakers, with global sales last year of $6 billion, is the possibility that systems used by its EDI trading partners might fail to recognize delivery dates designated as "00." Systems that are not millennium-friendly would interpret this as the year 1900 and could respond by either deleting the order because its too old or by sending an avalanche of materials to compensate for the perceived time lag. "We do more EDI with our customers than with our suppliers at this point," says Hiel Lindquist, Freudenberg-NOKs director of information technology. Data from this direction drives the companys production and, in turn, its orders from suppliers. "So our issue is making sure that our customers are sending us data that makes sense." Freudenberg-NOK has temporarily altered the relative-dating function in its EDI package so that numbers greater than 50 automatically correspond to the current century, numbers less than 50 to the next one. Meanwhile, the manufacturer is bringing its shop-floor systems into the 21st century as well. To that end, last November Freudenberg-NOK completed a survey of all the equipment of this type used at its 17 facilities throughout North America and embarked on the process of summarizing these data in order to determine exactly how many different pieces of inventory would have to be tested for compliance problems. Freudenberg-NOKs efforts underscore the scope of the challenges that manufacturers face in attempting to prepare their factory floors for the year 2000. Some of these are financial. According to a communication issued by AMR, anecdotal evidence indicates that the bill for addressing Year-2000 problems at the plant-floor level may be at least half of what a company spends to fix overall data-center issues. Other concerns that manufacturers face in addressing plant-floor technology relate to the complexity of equipment used in this area. "What they are finding at the plant-floor level is really squirrelly, largely because of the long time these systems tend to stay in a plant," says AMRs Swanton. Some of these systems that are affected are fire protection, safety, and security, many of which have timing devices that include calendars. For instance, he says, "Many energy-conservation systems and plants have time-of-day clocks that are not in compliance" with the four-digit year. "All those Excel spreadsheets that are used to run plant-floor systems are affected," Swanton adds. "Its sort of like a bee sting. One or two wont kill you, but 1,000 happening at the same time will hurt. Enough of that will build up so that youll see a serious performance problem in some plants." And if even one company loses 20% of its production capacity, he states, "that ripples through the supply chain." The ongoing nature of many manufacturing processes further hampers companies attempts to weed out problems. "When youre talking about embedded microprocessor logic in factory-floor equipment," states Jim Woodward, senior vice president of Cap Gemini America, New York, a firm whose TransMillennium Services Group can help manufacturers get their operations in shape for the next century, "one of the tricky areas is how to actually replicate the Year-2000 conditions before they happen" in order to conduct system tests. After all, continuous-processing plants such as power utilities cant afford to go dark after 5:00 p.m. Therefore, the solution involves testing during off-peak hours or buying backup equipment on which to simulate the desired environment. When a problem is uncovered, often it cant be fixed by the company using the software, adds Dan Miklovic, senior analyst with Gartner Group, a Stamford, Conn.-based consultancy. Although its fairly common for larger companies to hire hordes of COBOL programmers to attack their information-systems snags, he says, "in most plant-floor devices, the code is embedded in ROMs. So you cant change it yourself anyway, and even if you could, most of it is in assembly language, and you cant access it." What makes issues such as this particularly troublesome is the fact that in many companies its unclear whos in charge of Year-2000 analysis and testing initiatives at the floor level. "Thats an area where no one seems to claim ownership of the equipment," says Cobes Williams. "Factory-floor systems traditionally are not directly overseen by IT departments." Even though the various Cobe manufacturing units that use shop-floor equipment are willing to claim responsibility for solving potential Year-2000 problems, Williams states, "they dont necessarily understand the scope of the issue. So its hard for them to appreciate it or raise it to a level of even putting resources against it." Cobe is hardly alone in this regard. Although the Internet and other public media are rife with road maps that detail how users can find and fix Year-2000 problems in everything from a PCs internal clock to a major vendors software application, Williams thinks companies are picking the low-hanging fruit and avoiding the stretch it will take to get to the more difficult systems. Fortunately, third-party help for addressing shop-floor Year-2000 issues is available, although not widely so at present. Options in this area include Raytheon Engineers & Construction, Lexington, Mass., and Fluor Corp., Irvine, Calif. "You have to have people who are shop-floor savvy to go through the environment" to help ensure that behind-the-scenes issues dont get overlooked, says Raytheon Automated Systems Bruhn. For example, he notes that even though a system does not use a date stamp on a report, "it may use a date to do internal calculations, which can become absurd or end up dividing by zeroes at some point and shut down." Systems vendors also are entering the Year-2000 fray. In this category, most companies are making their current offerings millennium-compliant or at least announcing when this feature will be available. Likewise, analysis of older models has begun in earnest, with suppliers including Foxboro Co., Foxboro, Mass., Elsag Bailey Process Automation, Wickliffe, Ohio, and Rockwell Automation (maker of the Allen-Bradley, Reliance, Dodge, and Rockwell brands of factory automation equipment) offering databases and other tools to help users determine which of their products are compliant and what to do about those that arent. For example, Foxboro, a supplier of measurement, control, management, and other information-related services whose specialty involves processing industries such as refining and pulp and paper mills, recently began making its Year-2000 compliance testing facilities available to customers. Last fall, the company also began sending service teams out to client sites. However, not all equipment vendors are convinced that the millennium will be quite the time bomb that some industry sources are expecting. "To me," says David Imming, manager of integrated solutions and Year-2000 project team leader for Fisher-Rosemount Systems Inc., Austin, "there has been so much hype on this Year-2000 situation. Certainly if you look at it worldwide, for government organizations and financial institutions where they have all sorts of date calculations, they have many issues that need to be resolved. And while it needs to be taken very seriously in our industry, there are a vast number of our products that dont care at all what century it is." At the same time, some experts are concerned that manufacturers might dismiss their Year-2000 sermons as mere hype. "We sort of hate to sound like we are Cassandra in addressing this," says John Jenkins, president and CEO of TAVA Technologies, a Denver-based systems integrator. TAVA has teamed up with Irvine, Calif.-based Wonderware Corp. (maker of the FactorySuite automation package) to offer customers a detailed program called Plant Y2K One. "But over the next 24 months," he says, "theres a tremendous amount of work to be done." This is especially true for any business that relies on product-expiration dates or on EDI transactions to make forecasts 12 to 18 months into the future. One company facing both of these challenges is Eastman Kodak, Rochester. "Actually," states Jon Dertinger, manager of the mechanical-products organization in Kodaks equipment-manufacturing division, "the year 2000 is going to be a 1998-through-2000 problem" for Kodak, which employs some 90,000 people worldwide. Managers throughout Kodak are scrambling to report to top management on which systems need fixing first. To simplify the task of inventorying Kodaks embedded technology base, the company has created a relational database on its intranet so that workers using the same control system in different parts of the corporation need not duplicate one anothers efforts to contact the products vendor. At Unilever, which has a major effort underway to solve the problem, the company has already found some PLCs that are noncompliant. One production line, for instance, shut down when the laser-driven printer putting "sell-by" dates on products couldnt handle the 2000 date. Luckily, some manufacturers Year-2000 efforts already are returning dividends in areas other than the sheer avoidance of pain. "When were through this whole process," says TAVAs Jenkins, "the monies that will be spent in upgrading factory-automation and process-control systems will produce a large jump in productivity." At Nissan Motor Co.s Smyrna, Tenn., plant, on the other hand, the companys Year-2000 initiative (which began about three years ago) perhaps is revealing as much about Nissans technology vendors as about Nissan. The plant surveyed some 1,800 devices used in its automated operations. "The surprise is that it told us some suppliers were a lot more on the ball and more cognizant of the facts and looked out for customers than others," says Emil Hassan, senior vice president-operations at the site. As competition among manufacturers of all types intensifies, such analyses could help determine which companies grow and which ones shrink in the future. In other words, what might sound to some companies like a bomb ticking could be perceived by others as opportunity knocking.