Planning changes with the century
Many industries eying the year change a bit differently
The end of the year may not be the end of the world, but it
clearly won't come to pass like any other New Year's celebration.
We have learned of planning and stocking changes in many industries.
Here are just a few.
The October, 1999 issue of Logistics magazine, for example includes
an article about trucking. The lead-in to the article states,
"The truckload market could experience a major capacity crunch
if shippers stockpile goods this fall in anticipation of a Y2K
crisis.""There are some people stockpiling, but they
don't want to admit it," reports Herb Schmidt, a senior vice
president of sales and marketing with CFI in Joplin, Missouri.
"As a result, Schmidt expects to see some (trucking) rate
hikes in the range of 2 to 3 percent in the last part of this
year. 'It's a matter of demand. We've got more freight than we
can haul,'he says.'There may be some shippers that resist it,
but if they haven't had an increase in a while, we'll be faced
with some hard choices in the third and fourth quarters."
The article states that October, November and December are traditionally
strong months for the shipping business, but stockpiling could
exacerbate the situation.
An article in the October 25 issue of InfoWorld magazine states
that at the very least, people will no longer look at their companies
or its systems in the same fashion ever again. "Regardless
of what actually happens when the clock clicks over, the new year
should teach you a great deal about how your organization faces
challenges. Year-2000 related concerns are illustrating the interconnection
of industries, emphasizing dependence between departments, testing
the relationship between employees and management, and most of
all, stressing the need for contingencies." Gee, I wish I
had said that.
An accompanying article by Ted Smalley and Renee Gotcher begins
this way: "The image is as familiar as it is extreme. Like
so many wild-eyed ship captains, managers in all sectors of the
economy stalk their respective bridges, barking 'All hands on
deck,' to weather the year-2000 storm. Whatever one's expectations,
there is at least a kernel of trepidation that things will go
awry when we roll into the '00s." The article gives examples
of companies where Y2K SWAT teams have been assembled, technology
"lockdowns" have been put in place and employees forced
to sign contracts to stay in town, "barring vacations during
periods as long as mid-November to mid-January, and later."
We have all heard the news stories about countries forcing airline
executives to be "in the air, aboard one of their flights"
when the millennium clock ticks over.
One banking professional told me that the Federal Reserve Board
has printed $50 billion in excess currency to be able to withstand
customers pulling hard currency out of their accounts. Banks are
stockpiling currency just in case. "The biggest problem,"my
source said, not wanting to be identified, "is what to do
with the cash once this is all over. The banks certainly don't
want to keep a lot of cash around. We will be sending money back
to the Feds as quickly as it comes back in."
Even Costco has joined the fray and they included a five-day action
plan in the October issue of The Costco Connection for getting
your small business past January 1, 2000.
The action plan includes making lists of all computer hardware
and software, manufacturing systems, communications systems, security
and building systems, including utilities, and even company credit
cards. Once the list is generated, assign someone to identify
the manufacturer, serial number and model. That information is
then used to contact the manufacturer to ensure Y2K compliance.
This task is accompanied by someone contacting all major vendors
and suppliers to ensure their compliance and review any Y2K clauses
in your vendor agreements. By day four you need to be identifying
backup systems in case of shutdowns and putting a person in charge
of making decisions about putting any alternate plans into action.
One suggestion is to print out your historical databases on December
30, so that you have a hard copy, in addition to saving your information
to disk.
By day five they suggest that you consider the possibility that
any of the following could be affected to some degree: home (or
office!) security systems; banking and lending; child care; toll
bridges and commuter railroads; medicines, hospital care and doctors;
insurance; and contact with government agencies.
With the exception, perhaps, of forcing airline executives to
fly at a certain time, none of these suggestions are bad ones.
My hope for all of this millennium hype is that businesses DO
take the precautions seriously. Every business and home environment
can benefit from checking and double checking the reliability
of your systems, from knowing your vendors and alternate methods
of continuing your business. The Y2K bug may or may not have any
effect on your business. In the case of a fire, illness or theft,
(inconveniences of somewhat lesser proportions than the end of
the world as we know it) your business would still be in better
shape for recovery LCB
Industry professionals speak out
Comments range from "No changes" to "I'm so sick
of Y2K!"
n come cases, no news is good news. We surveyed investment
advisors and tax planners throughout the Lower Columbia region
and for the most part, the end of the year advice for clients
is no advice at all.
Of professionals answering a mini-questionnaire we floated, all
answered that less than 25% of their clients have asked them about
Y2K or millennium ramifications in tax or financial planning,
most (but not all) are not preparing any special materials or
publications to address the issue, and most are not proceeding
any differently with smaller versus larger clients.
Representatives of the Bank of Astoria, for example, are currently
making the rounds of larger customers to ensure Y2K compliance,
while Jim Lanzarotta, CPA of Moss Adams, LLP, states that some
clients are receiving differing financial advice based on their
category of business. Clients of Moss Adams, LLP, may receive
special materials developed to recognize Y2K risk areas.
Robert Brown of The Brown Financial Group states that some clients
may transfer funds into money market accounts if they are worried,
or larger clients may hold off on investing new funds. Diane Kay
Gibson, CPA of Manzanita stated, "Basically, I'm trying to
keep them calm. I have one or two clients that are selling everything
off and that is sad. I think the hubbub is what is really causing
all the trouble. I'm so sick of Y2K I could scream."
The people at Powell, Seiler & Co. in Long Beach have advised
their clients to keep a hard copy backup of their computer data
as of December 31, 1999 and to use available Internet software
to check their computer hardware, operating systems, user programs
and data.
Tax professionals Cher Fillman, Gregory McLeod and Richard Hurley
all stated that no changes were being made in their handling of
clients or advice presented based on Y2K worries, and John Carlson
of Allen and Carlson CPAs of Astoria is giving general advice
about Y2K readiness, not specifically affiliated with tax preparation.
"While we may not be equipped with all the answers,"
said John, "we are often a place where clients turn for advice.
We plan to be prepared to help if needed."
Financial services professional Mark Hedeen of Raymond James blames
the recent stock market weaknesses on interest rate concerns,
a weak US dollar, record trade deficits, increasing warnings about
a weak 4th quarter and Y2K. He thinks these issues will cause
a slowdown. It sounds like self-determination to me.
Putting more exacting information and advice on the line is technical
columnist Bob Metcalfe, who writes an Internet column for InfoWorld
magazine titled "From the Ether." Bob predicts the stock
market "Bubble" will burst on November 8 and Wall Street
will wake up with a "long-term hangover." You may read
his column and others on the Internet at http://www. infoworld.com.
I personally prefer the November 8 disaster date scenario for
two reasons. First, we can get the end of the world over sooner,
rather than having to bite our nails for another month and a half
until January, 2000, and second, if the world does come crashing
down around us a little earlier than the rest of the world is
anticipating, then we still have plenty of time to plan how to
spend the holidays.
Ugh...got firestick to lend, caveman? LCB
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