The ticking clock counting off the seconds until the year 2000 could be a time bomb -- or merely the countdown to a temporary, albeit widespread, inconvenience. Opinion is divided sharply as to how big a problem computers' inability to cross the bridge to the 21st century will be, and whether the supermarket industry is doing enough to prepare for the change.
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SMITH: The biggest myth about this issue is when people say, "It doesn't affect me." Or they think it affects them, but only in a minor way. Many have underestimated the impact this will have on their company.
If we fail to react properly, there will be only three options, and they are pretty severe. One is: Spend whatever it takes to get the job done, if you can get it done at any cost. That will be the crisis-mode operator.
If you cannot accomplish that, there are only two other options: one is to go out of business, and the other is to sell yourself to somebody who can save you. It's as plain as that. It's unfortunate, but the reality of the situation is, if you can't spend enough to fix it, then you've got to shut down or find somebody who can absorb you and fix it for you. Pretty extreme consequences.
HOMA: The biggest myth about the year 2000 is that people think there is a silver bullet out there. There are two more myths: People think it is a mainframe problem, and it's not; and people think [everything] will crash and burn at the year 2000. It will be painful, but not disastrous.
The supermarket industry probably doesn't have as many forward-reaching data issues as do the banking and insurance industries. A lot of data in inventory management systems only goes forward six weeks.
NICHOLSON: Supermarket systems aren't making very many decisions related to specific dates, so I think the impact on the supermarket industry is relatively small compared to the larger business community out there. I do think that for certain industries, it is going to be a very big problem, and I think we're going to see many businesses surprised. I hope that our industry is not in that category.
SN: How would you rate the supermarket industry's preparedness for the year 2000 issue?
DRURY: Basically, I think our industry understands the problem and is working toward solving it. For example, the Uniform Code Council recently passed a standard for year 2000 compliance on the electronic data interchange standards, which has been submitted to the American National Standards Institute for approval. That to me says we understand we have a problem, because that's the fundamental way of corporation A talking to corporation B. Prior to that, it was a little slow coming out, in my opinion. We should have been here two to three years before this.
SMITH: I believe very few retail companies are prepared. They tend to delay the work. Either they delay the start of it, or they slow down the completion of it. Many have started the effort, but without a sense of urgency or focus. It's too big a deal to wait.
Another way to characterize this thing is to say that it's a strategic problem, and our tendency as an industry is to manage the business day to day. It's not a crisis today, and therefore it doesn't deserve our focus.
SN: How do you see the industry changing after the year 2000? Will new relationships need to be formed?
DRURY: We have to be prepared for other organizations to have trouble. Even though we're tight and ready to go, we have to make sure that if vendor A's systems fail, we will be able to compensate for it. And that's a scary thing.
There's a lot of risk to it, because we can't be sure that supplier A or bank B or whomever will be compliant. We'll try to find out, but when the calendar flips over to year 2000 and suddenly supplier A can't do EDI for whatever reason, or a forecasting system for continuous replenishment doesn't work, we feel the brunt of that. So even though we had no involvement in their year 2000 problems, suddenly we're the victim of it.
SN: It sounds like it will be a frightening New Year's Eve.
DRURY: It will probably start to happen before that, because forecasting systems look forward. We'll start seeing some failures, if any, about mid-1999.
